Michael Pfeifer and Kirsten Burmester Comment on Tax Returns of Americans Living Abroad Under Scrutiny

Caplin & Drysdale's Michael G. Pfeifer and Kirsten Burmester commented on advising clients with offshore accounts on complying with reporting requirements under the Foreign Account Tax Compliance Act (FATCA). To read the full article, please visit Main Street's website.

Excerpt taken from the article.

"We are advising foreign clients that qualify as foreign financial institutions to register for a Global Intermediary Identification Number (GIIN) and enter into an agreement with the IRS to comply with the requirements of FATCA, including complying with due diligence procedures to identify account holders who may be U.S. taxpayers and reporting information regarding their accounts to the IRS," said Kirsten Burmester, an attorney with Caplin & Drysdale.

The enactment of FATCA is part of a recent focus on offshore tax evasion stemming largely from the UBS scandal that began in late 2007. The scandal was based on former Swiss UBS Banker Bradley Birkenfeld's testimony to the U.S. Department of Justice (DOJ), the U.S. Securities and Exchange Commission (SEC) and the U.S. Internal Revenue Service (IRS) that the bank had guided its sales force to hide assets of U.S. taxpayers for the purpose of avoiding taxes.

"The disclosure by UBS of its U.S. account holder information and subsequent targeting of other Swiss banks and foreign financial institutions by the Department of Justice has led thousands of individuals with offshore accounts to disclose information regarding their accounts and pay back taxes and penalties to the IRS in order to avoid criminal prosecution," said Michael Pfeifer, an attorney with Caplin & Drysdale.