US launches international compliance campaigns

Thursday, 24 May 2018
The US Internal Revenue Service has launched a series of tax compliance campaigns against international individuals and businesses.


There are six initiatives in all. The campaigns especially relevant to individuals aim to:

  • enforce reporting of ownership of foreign trusts and transactions with them, and those who receive foreign gifts;
  • penalise withholding agents who do not properly withhold, deposit or report payments of US-source income to foreign persons;
  • enforce non-resident alien individual tax treaty exemption claims related to effectively connected income, and to fixed determinable annual periodical income; and
  • enforce the proper deduction of eligible expenses and tax credits for non-resident alien individuals.

According to Canadian tax advisors Moodys Gartner, these initiatives will impact many US expatriates, and foreigners with US connections, in Canada, Australia and other countries.

'It is noteworthy that the [IRS Large Business and International Divison] has rolled out a total of 35 campaigns over the past 18 months', says Moodys. 'The escalation of compliance campaign initiatives reflects a deliberate move by the IRS leadership towards data analytics and technology to sift through massive amounts of information from various sources. This trend will likely continue as IRS resources are overstretched to the limits, with the implementation of US tax reform taking top priority.'

Moodys notes that, with the imminent end of the Offshore Voluntary Disclosure Programme (OVDP) on 18 September, the window for voluntary compliance for delinquent US expats and non-compliant foreign taxpayers is closing.


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