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News Link • TAXES: Federal

IRS Crackdown on Offshore Tax Cheats Comes with a Price

But if you're an American living overseas, July 1 may come to hold an even greater significance — the day the Internal Revenue Service's new overseas tax-collection rules took effect. 

The Foreign Account Tax Compliance Act, or FATCA, became law in 2010. It requires financial institutions worldwide to report holdings of "U.S. persons" worth more than $50,000 to the IRS. 

Those institutions the IRS deems non-compliant could face a withholding tax of up to 30 percent. The law was designed to go after scofflaws that hide money in overseas accounts, and the IRS expects to collect $7.6 billion over the next decade because of it. 

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