As of July 1, any Americans trying to stash funds abroad to evade taxes will be faced with a comprehensive new law which requires banks, funds and other financial institutions around the world to report assets held by American clients or face a damaging 30% witholding tax.
So far more than 77,000 financial institutions have agreed to pass information to the IRS.
The new law is called the Foreign Account Tax Compliance Act and it covers any “US person” including green-card holders and anyone with substantial connection to this country.
Seven million Americans living abroad have already been affected by the law because banks and other financial services are finding that the paperwork is too massive to satisfy Uncle Sam under the FATC.
The IRS will soon be the repository of massive amounts of data on any Americans holding accounts anywhere in the world.
Under the IRS whistleblower program, a person with information about tax fraud leading to collections of at least two million dollars have a right to an award of up to 30% of what is collected.
Jeff Newman represents IRS whistleblowers.