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February 1, 2015 / 12 Shevat, 5775
 
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BETTER IRS

Israel, US to Exchange Tax Information, Banking Secrecy Disregarded

The IRS has been known to impose sanctions against a bank which knowingly permitted customers to violate FACTA rules.
Israel Tax Authority director general Doron Arbeli

Israel Tax Authority director general Doron Arbeli
Photo Credit: Yoav Ari Dudkevitch / FLASH90

Globes cites sources claiming that the Ministry of Finance is working to sign an agreement with the U.S. Department of the Treasury on the transfer of information regarding bank accounts belonging to foreign nationals in both countries.

According to Globes, Israel Tax Authority director general Doron Arbeli last week met Internal Revenue Service (IRS) acting commissioner Steven Miller to advance this effort. Should an agreement be signed, Israel will establish an organization to monitor and enable the transfer of the necessary information to the U.S., and the IRS will send to Israel details of bank accounts belonging to Israeli residents in the U.S.

The initiative was born by an effort of the Ministry of Finance to help Israeli banks deal with draconian U.S. regulations under the Foreign Account Tax Compliance Act (FATCA), which applies to US citizens residing overseas.

Under FATCA, banks in foreign countries—including Israeli banks—must provide the IRS with lists and details of accounts belonging to U.S. citizens, including declarations from said citizens that they have paid the required taxes back in America.

The IRS has been known to impose sanctions against a bank which knowingly permitted customers to violate FACTA rules.

According to Globes, banks around the world have sharply criticized FACTA’s hard nosed policies, but one way of dealing with the law’s requirements is signing an agreement of cooperation between the foreign country and the U.S. the agreement allows local banks to send bank account details to their own government, which then passes them on to U.S. authorities.

Banking secrecy? We don’t need no stinking banking secrecy…

Globes cited a U.S. Department of the Treasury document published in November, which states that the U.S. administration was in talks with Israel’s Ministry of Finance to draw up an agreement, under which the US authorities would also provide the Israeli authorities with information about the bank accounts of Israeli citizens residing in the U.S.

Uncle Sam is in similar talks with Argentina, Hungary, New Zealand, and South Korea.

The agreement will not be symmetrical. The U.S. will be required to transfer less information than the Israelis will be doing, but Globes suggests that even partial information could help the Israeli government fight tax evasion by Israelis in the U.S.

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4 Responses to “Israel, US to Exchange Tax Information, Banking Secrecy Disregarded”

  1. Charlie Hall says:

    Excellent! Tax cheats are a plague on society. They increase the tax burden for those of us who obey the law. And some of these bank secrecy laws have sheltered people who launder money for drug gangs and terrorist organizations.

  2. Anonymous says:

    With this measure they are NOT going after drug gangs and mafia money launderers, though, are they?
    It's good NOT to put one's money in Israeli banks. There are MUCH BETTER places to put one's money than in Israel's banks (they are REAL thieves, and now even snitches). Singapore is one, and they are also very Israel friendly.
    The real THEFT is the one the IRS is attempting. Why would a US Citizen who lives in OVERSEAS feed Washington's socialistic leviathan, pay for Obamacare that he doesn't use, etcetera?

  3. Charlie Hall says:

    "Why would a US Citizen who lives in OVERSEAS feed Washington's socialistic leviathan, pay for Obamacare that he doesn't use, etcetera?"

    Because they are US Citizens, sillly! All they have to do to stop paying taxes is to renounce their US Citizenship.

  4. Hinda Blas says:

    I do not trust this administration especially with it's appeasement towards terrorism. Obama and it's henchmen/women are in the pockets of terrorists. As much as I abhore tax cheats; I equally abhore this administration and Geithner who has not paid any of his taxes since 1994. And he's in charge of our monies.

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