The IRS is literally calling in the big accounting guns as it seeks help finding foreign banks that fail to identify U.S. customers with investments or income in offshore accounts.
A conference call is scheduled today between the IRS and Deloitte, Ernst & Young, KPMG, PwC, Grant Thornton, and BDO Seidman.
According to Bloomberg, IRS deputy commissioner Barry Shott sent the accounting firms an e-mail noting that the IRS was concerned about what it was "seeing and hearing" about the practices of some foreign banks.
The call’s focus, according to reports in various business and accounting publications, is the Qualified Intermediary program, which was launched in 2000 as a way for the IRS to keep tabs on U.S. taxpayer funds in foreign bank accounts.
The program allows foreign banks operating in the U.S. to release the names and details of customers in return for lenient treatment on their taxes. The rules, however, cover only individuals, not companies. By transferring asset to protected companies, taxpayers could get around the rule.
‘We are concerned generally by what we are seeing and hearing’ how some foreign banks are behaving when it comes to their customers’ payment of US taxes, an email said from Barry Shott, a deputy IRS commissioner in charge of international taxes, to the six big accountancy firms.
The call is the latest move by the IRS to crack down on taxpayers who use foreign accounts to avoid U.S. tax payments. Previous blog items on this issue can be found at Liechtenstein tax inquiry spreading, Tax havens getting it from all sides and Plea entered in foreign tax evasion case.
More on today’s accountants/IRS call can be found in Bloomberg, Accountants World, WebCPA, the ABA Journal and the Financial Times.
