The Tax Times: U.S. & Italy Sign FATCA Agreement.

Thursday, January 30, 2014

U.S. & Italy Sign FATCA Agreement.

The U.S. and Italy have signed an intergovernmental Agreement between the Government of the United States of America and the Government of the Republic of Italy to Improve International Tax Compliance and to Implement FATCA.

The U.S. Treasury Department on January10, 2014 said it signed an anti-tax evasion pact with Italy, which became the 13th country to sign such a deal with the United States.

“Today's announcement is another important step forward in the fight against international tax evasion, and underscores FATCA's growing momentum and international support,” Treasury Deputy Assistant Secretary for International Tax Affairs Robert B. Stack said in a January 10, 2014 statement.

“We welcome Italy's commitment to strengthening its cooperation with the United States in improving tax compliance,” he said.

U.S. and Italian officials signed the agreement, known as an IGA. IGAs, in general, allow financial institutions to report the information to their own governments, which then share the information with the IRS.

The agreement came ahead of the implementation in July of a new law to crack down on offshore tax avoidance by Americans, the Foreign Account Tax Compliance Act (FATCA).

With the Italian IGA signed, Italian banks and financial institutions will report information about eligible U.S. customers' offshore accounts to the Italian government, which will then send that information to the IRS.

The IGA is reciprocal, requiring the IRS to send Italy similar information about Italians with financial accounts in the United States. This arrangement has raised concerns among U.S. banks and some members of Congress.

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