WASHINGTON (Reuters) - A senior U.S. Treasury Department official said on Wednesday that Republican Party opposition to a new law meant to fight offshore tax dodging by Americans will not impede the Obama administration’s efforts to implement it worldwide.
The Foreign Account Tax Compliance Act (FATCA) is expected to be targeted later this week at a Republican National Committee (RNC) meeting by a resolution urging its repeal.
A Republican vote for abolishing FATCA, expected on Friday, will not be “a big deal,” Treasury Assistant Secretary for Tax Policy Mark Mazur told reporters on the sidelines of a conference.
Approved in 2010 and set to take effect on July 1, FATCA will require most foreign banks and investment funds to report to the U.S. Internal Revenue Service information about U.S. customers’ accounts worth $50,000 or more.
The law - enacted after a scandal involving Americans hiding assets from the IRS in Swiss bank accounts - has been sharply criticized by banks, libertarians and some Americans living abroad as a costly and unneeded government overreach.
“Prior to yesterday ... I wasn’t sure that the Republican National Committee was going to do anything on this,” Mazur said. “We’ll see what happens.”
To implement FATCA worldwide, the Treasury Department is negotiating “intergovernmental agreements” (IGAs) with more than 50 foreign governments. Each pact would give financial institutions in those foreign countries much more certainty about what they must do to comply with FATCA.
While the Treasury has so far signed more than a dozen of these deals, negotiations with other countries - notably Canada and China - have struggled, sources have said.
“There is a ton of momentum on the IGA negotiations,” Mazur said. “Our staff has done a really good job of doing these negotiations. I expect that to continue.”
Editing by Kevin Drawbaugh and Stephen Powell