WASHINGTON Jan 13 In a win for the Obama
administration's fight against offshore tax evasion, a U.S.
federal judge on Monday dismissed a lawsuit challenging new
rules forcing U.S. banks to tell the Internal Revenue Service
about certain accounts held by foreigners.
Set to take effect in March, the rules are part of a
fast-emerging global web of bank information-sharing agreements
between the United States and many other countries meant to
combat the hiding of assets abroad to avoid paying taxes.
Bank industry lobbying groups in Texas and Florida in April
challenged the U.S. rules in a lawsuit against the Treasury
Department and the IRS, saying the rules were burdensome and
would discourage U.S. foreign investment.
Judge James Boasberg of the U.S. District Court for the
District of Columbia, in a 23-page opinion, dismissed the
lawsuit, finding that the new rules "would cause minimal burden
to banks and their customers."
Written in 2012, the rule would require disclosure by U.S.
banks of information about accounts held by non-resident aliens
that earn at least $10 of interest per year.
"The court's opinion today represents an important step in
our commitment to work with our treaty partners to eliminate
cross-border tax evasion," said Assistant Attorney General
Kathryn Keneally, head of Justice's tax division, in a
A lawyer representing the banking associations could not
immediately be reached late on Monday.
The new reporting requirements help the United States
implement the Foreign Account Tax Compliance Act (FACTA), the
Justice Department said.
Approved by Congress in 2010, FATCA is driving the rapid
worldwide expansion of a network of bilateral tax
information-sharing agreements, negotiated by the U.S. Treasury
and its overseas counterparts amid heightened global concern
about tax dodging. FATCA is set to take effect in July 2014.
The case is Florida Bankers Association v. U.S. Department
of Treasury, U.S. District Court for the District of Columbia,