A White House push against tax evasion helped spur the passage of FATCA in 2010.
On Thursday, the Treasury Department also announced that Norway had joined six other countries – Denmark, Ireland, Mexico, Spain, Switzerland and the United Kingdom – in reaching an agreement with the U.S. on implementing FATCA.
Those agreements, which Treasury predicts the U.S. will sign with more countries, seek to reduce the administrative burdens of complying with FATCA. In all, Treasury says, the U.S. talking with over 50 countries on how to battle offshore tax evasion.
Banks in some of the countries that have signed agreements with the U.S. will report on American account holders to their own governments, which will then share information with the IRS.
In other countries, banks will report directly to the IRS.
The final FATCA rules also will be phased in over an extended time, and would limit the reporting required for retirement funds and other low-risk items.
Under FATCA, foreign banks that don’t share information with the IRS would face a 30 percent withholding fee on certain payments connected to the U.S.