Bloomberg BNA Quotes Mark Matthews on FATCA Status
More than 50 jurisdictions—excluding the U.S.—are scheduled to exchange data on foreign accounts starting in September via the OECD's recently launched common transmission system (CTS).
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The U.S. isn't a participant in the CRS because it enacted FATCA, which requires foreign banks to report U.S. account holders. Like the CRS, it's meant to combat the use of offshore bank accounts to evade taxes.
“Obviously the political environment in the United States is as fractured as it's ever been,” Matthews, a former deputy commissioner of the Internal Revenue Service, said during the IFA panel. “There is utterly no shot at any legislation that will fundamentally advance exchange of automatic information,” he said, citing President Donald Trump's “anti-globalist view.”
IRS Quality Problems
Matthews said exchange of information doesn't seem to be on anyone's priority list. “If you look under the hood, that's where the trouble starts for the system.”
The IRS has significant quality problems, according to Matthews. Part of the problem is that the IRS has about 600 data systems, some of which are ancient. “In any given day, there are constant problems.”
Section 6038A and 6038C are a step in the right direction.
Matthews said he doesn't believe the U.S. will have a workable system soon to analyze the data collected through FATCA and be able to use it the way it was envisioned by the statute.
Still, “as confident as I am that it's not working as it should, I know it will get there,” Matthews said. “And when that tiger is created, it'll be one brutal tiger.”
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Excerpt taken from the article “Countries to Exchange Account Information in September” by Sony Kassam for Bloomberg BNA.