The Cayman Islands, which has been used by wealthy individuals and large corporations to evade U.S. taxes has agreed to assist in revealing tax cheats to the U.S. government, pursuant to the Foreign Account Tax Compliance Act. This law requires U.S. persons, including those living outside the country to report their financial accounts held outside of the U.S.
As part of an agreement, the Cayman government will collect information on American held bank accounts with a value over $50,000. It is estimated that the U.S. lost more than $3 trillion from 2001-2010 due to tax evasion. Estimated losses to offshore tax non-compliance is at $1 Billion per year. The agreement will involve all banks on the islands which will also be required to cooperate. The information will be communicated through the Cayman Government to tax revenue authorities.
The Foreign Account Tax Compliance Act (FACTA), was designed to force compliance with the law requiring U.S. persons to report and pay taxes on income from all sources. The U.S. levies income taxes on all of its citizens regardless of residency and requires all Americans living abroad o pay U.S. taxes on foreign income, minus credit for foreign paid taxes.
Jeffrey Newman represents whistleblowers