BEHIND THE HEADLINES: Moving closer to full implementation

GEORGETOWN, Guyana, Stabroek News - It was labelled a “John Doe” summons and it sought information about American taxpayers with offshore accounts at CIBC FirstCaribbean International Bank (FCIB) and across the rest of the Caribbean.

And when it was served on FCIB in Barbados, bankers across North America, Europe and the Caribbean took note. That’s because it sent a strong message to foreign financial institutions that the United States (US) Justice Department, the Internal Revenue Service (IRS) and the federal courts were determined to implement the controversial and costly provisions of the Foreign Account Tax Compliance Act (FATCA), which from July 1 will require foreign banks, insurance companies and other financial institutions to keep track of and report to the IRS the financial transactions of Americans.

“The new rules require foreign financial institutions (FFI’s) to provide the [IRS] with information on certain US persons invested in accounts outside of the US and for certain non-US entities to provide information about any US owners,” was the way Deloitte, the major global accounting firm, put it.