Switzerland and Japan are the latest additions to the list of countries that agreed to cooperate with US Treasury.
Treasury said on June 21, that the U.S. had signed separate joint statements with Japan and Switzerland to intensify cooperation in combatting international tax evasion by removing legal impediments to compliance with the Foreign Account Tax Compliance Act (FATCA). The approach taken under the joint statements with Japan and Switzerland permits foreign financial institutions (FFIs) to report information directly to the IRS, which is different from an earlier approach that called for FFIs to report information directly to their governments that would ultimately be shared with the U.S. on an automatic exchange of information basis.
The announcement expands the list of countries already cooperating with Treasury to implement FATCA. Treasury said in February it was negotiating with France, Germany, Italy, Spain and the U.K. (the so-called G5) to establish government-to-government information sharing arrangements. (See International Taxes Weekly, 02/14/2012). In April, Treasury also announced that Ireland had entered into discussions with Treasury regarding an intergovernmental approach to implementing FATCA.
Treasury’s joint statement with France, Germany, Italy, Spain and the U.K. envisages a two-step approach whereby FFIs report FATCA-required information to their own governments and then the governments exchange the information with the U.S. on an automatic basis.
Treasury’s separate joint statements with Japan and Switzerland contemplates the mutual intent to pursue a second model framework for intergovernmental cooperation, a senior Treasury official said. Under the second model for inter-governmental cooperation, FFIs would report information directly to the IRS to the extent permitted under the FFI’s domestic laws. Where consent is necessary and not granted by the account holder, the governments would then be able to obtain such information pursuant to a treaty request.
From Snell & Wilmer (www.swlaw.com)
Department of Homeland Security (DHS) Secretary Janet Napolitano announced today that certain qualified foreign nationals without immigration status who were brought to the United States as children, and meet other specific criteria, will be eligible for work authorization and will be considered for relief from removal. To be eligible, individuals must demonstrate that they meet the following criteria:
- Came to the United States under the age of 16 years;
- Have continuously resided in the United States for at least five years preceding June 15, 2012 and are present in the United States on June 15, 2012;
- Are currently in school, have graduated from high school, have obtained a general education development certificate, or are honorably discharged veterans of the Coast Guard or Armed Forces of the United States;
- Have not been convicted of a felony offense, a significant misdemeanor offense, multiple misdemeanor offenses, or otherwise pose a threat to national security or public safety; and
- Are not above the age of 30.
Only those individuals meeting all of the above criteria will be considered for deferred action and work authorization, and such action will be decided on a case-by-case basis. It will be the responsibility of the applicant to present verifiable documentation to establish all of the criteria.
Obtaining deferred action and work authorization will not grant the applicant any immigration status or pathway toward citizenship. Grants of deferred action will be given for a period of two years, subject to renewal.
While this directive takes effect immediately, U.S. Citizenship and Immigration Services (USCIS) and Immigration and Customs Enforcement (ICE) are expected to begin implementation of the application process within 60 days. We expect USCIS to provide further instructions regarding this process in the very near future. More information is available at www.dhs.gov.
Last week IRS updated the FAQs on its website regarding reporting on Form 8938 and added few more questions. Few noteworthy clarifications are:
- Tangible assets held for investment (e.g., art, antiques, jewelry, and cars) do not have to be reported.
- Safe deposit box is not a financial account.
- The omission of Form 8938 with the original return requires an amended return to be filed with the form attached.
- Filing of Form 8938 does not remove the requirement to file Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts), if otherwise required.
- Directly held precious metals, such as gold, are not specified foreign financial assets. Note, however, that gold certificates issued by a foreign person may be a specified foreign financial asset that you would have to report on Form 8938, if the total value of all your specified foreign financial assets is greater than the applicable reporting threshold.