Court Rules U.S. Banks Must Disclose Nonresident Bank Account Information

more+
less-

As a result of a court decision last week, issued by the District Court in the District of Columbia, U.S banks will be required to report interest earned on accounts held be non-resident aliens if the interest earned is $10.00 or more per year.  The case, involved a challenge by a couple of bankers associations to the 2012 amendment to the Department of the Treasury’s interest-reporting regulations.  The result is that the U.S. will be able to comply with information exchange requests from its treaty partners and exchange information as required under the Foreign Account Tax Compliance Act (FATCA).

As a result of the holding implementation of the interest-reporting regulations some of those individuals will find themselves in tax problems with their home country.   An example of how problematic the exchange of information agreements can be is the recent request by Norway for treaty based assistance in obtaining account information on Norwegian citizen account holders at a Pennsylvania banks.  The U.S. cooperated and forced the disclosure of account information to the Norwegian authorities. 

Many non-resident aliens use the U.S. as a safe harbor for their financial assets.  It is important for all non-resident aliens to understand the reporting rules and their implications or the results could be dire.  

 

Topics:  Bank Accounts, Banks, FATCA, Foreign Bank Accounts, Foreign Banks, Non-Resident Aliens

Published In: Finance & Banking Updates, International Trade Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sanford Millar, Law Offices of Sanford I. Millar | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

CONNECT

Sanford Millar
Law Offices of Sanford I. Millar

Experience and Qualifications: Over 30 years of experience in domestic and international tax... View Profile »


Follow Law Offices of Sanford I. Millar:

Reporters on Deadline