On October 27, 2009, Senator Max Baucus (D-Montana) and Representative Charles Rangel (D-New York), chairmen of the Congressional tax writing committees, introduced the Foreign Account Tax Compliance Act of 2009 (the “Bill”) in the U.S. Congress. A statement released by the House Ways and Means Committee indicates that the Bill “is intended to clamp down on tax evasion and improve taxpayer compliance by giving the IRS new administrative tools to detect, deter and discourage offshore tax abuses.” If enacted in its current form, the Bill would, among other things, impose a 30% tax on payments made to foreign financial institutions, unless they comply with disclosure and certification requirements relating to their U.S. account holders, and to foreign non-financial institutions in certain circumstances. Both President Barack Obama and Treasury Secretary Timothy Geithner issued statements giving their unqualified support for the Bill.
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