WASHINGTON (Reuters) - The Treasury Department moved on Thursday to shut the door on further 11th-hour tweaks to a new law set to take effect on July 1 that is meant to fight offshore tax evasion by Americans.
The Foreign Account Tax Compliance Act (FATCA) was enacted in 2010 and has undergone successive delays and revisions, with banks even now saying more time is needed to get ready for it.
But a Treasury Department statement said that the largely technical reporting changes released on Thursday are “the last substantial package of regulations” needed to implement FATCA.
Treasury officials said the latest fixes would prevent another delay to a law that already has been twice postponed.
An official told reporters: “We’re going full-speed ahead for getting this implemented by July 1. We don’t see any likely event that will cause us to change that.”
Congress passed FATCA in response to a scandal involving Americans hiding money in Swiss bank accounts. The law requires foreign banks to share information about Americans’ accounts of more than $50,000 with the U.S. Internal Revenue Service.
Foreign institutions that fail to comply with FATCA face a potential 30-percent withholding tax on U.S. source income that could effectively freeze them out of U.S. financial markets.
The latest changes to the law are highly technical and involve making it easier for some foreign financial institutions to report customer information to the United States, addressing the concerns of both U.S. and foreign banks.
Before Treasury announced its FATCA rule changes, four banking groups called for a six-month delay to the law, saying businesses did not have enough guidance to guarantee they were complying with the law.
Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh, Howard Goller and Andrea Ricci