Ireland and USA to sign Tax and Banking Disclosure Agreement
The US Government is entering into agreements with other countries in an effort to gather more information on the financial affairs of US persons around the world. The ultimate aim is to collect more tax from them. Ireland and the US are due to sign such an agreement before the year-end.
The intention is to identify US taxpayers who hold assets outside the US and to ensure the appropriate tax is collected by the US tax authorities (IRS). The reverse is also true in that Revenue will have access to information from the IRS to help identify Irish taxpayers in the US.
The IRS is trying to identify those people who have assets or accounts outside the US so they can tax them. If you are a US citizen or have lived, worked or invested in the US then you could be affected. Revenue in Ireland will also be seeking to collect tax where appropriate.
Financial institutions (banks, stockbrokers, private equity funds, hedge funds, brokers, life insurance companies, etc.) will be required to report certain information to Revenue who will in turn report this to the IRS. The IRS will also make equivalent information in the US available to Revenue in Ireland.
When will it take effect? Information for 2013 and 2014 will be reported in due course but it looks like this information will not be filed until 2015 at the earliest which gives people a chance to get their tax affairs in order.