Snap Fact #216 - 2012 Progress Report: President Obama's Foreign Account Tax Compliance Act (FATCA)!

Post date: Jun 11, 2012 10:7:17 PM

Snap Fact #216

2012 Progress Report: President Obama's Foreign Account Tax Compliance Act (FATCA)!

The IRS previously had said it was unlikely to offer amnesty following its 2009 and 2011 programs. But the IRS says it’s collected more than $4.4 billion so far from the two previous international programs and much money is still expected from the 2011 Offshore Voluntary Disclosure Initiative (OVDI).

That’s some serious change given tax revenues over the last two years. Besides, more and more people are turning up with these issues, many of whom seem reluctant to come forward in the absence of a formal invitation. For that reason and to provide a program into the future, the IRS has reopened its Offshore Voluntary Disclosure Program (OVDP).

This is great news and the IRS should be commended for changing its mind, offering the kind of pre-packaged program many taxpayers find more palatable than a more open-ended voluntary disclosure. The latter, many fear, might or might not go well, with variables that can be harder to predict.

The IRS says this third offshore program will be open indefinitely. It is mostly similar to the 2011 OVDI but here’s what’s new:

Romney tax returns detail funds not included in ethics forms. Some investments listed in Mitt and Ann Romney's 2010 tax returns — including a now-closed Swiss bank account and other funds located overseas — were not explicitly disclosed in the personal financial statement the Republican presidential hopeful filed in August as part of his White House bid.

An examination by the Los Angeles Times/Tribune Washington Bureau found that at least 23 investments detailed in the couple's 2010 tax returns did not show up or were not listed in the same fashion on Romney's most recent financial disclosure, including 11 based in low-tax foreign countries such as Bermuda, the Cayman Islands and Luxembourg.

The campaign has emphasized that Romney has paid all required U.S. taxes on his foreign funds.

Many of the funds that show up on Romney's tax returns but not his financial disclosure are affiliated with Bain Capital, the Boston-based private equity firm he ran for 15 years. Several others are apparently unrelated offshore entities such as Babson 2006-1, which is based in the Cayman Islands, and Barracuda Investments, which has an address in Dublin, Ireland, but appears to be owned by Golden Gate Capital, a private equity firm based in San Francisco.

Among the assets omitted is a Swiss bank account in Ann Romney's blind trust that held $3 million until it closed in 2010. The account was listed on a financial disclosure Romney filed in 2007, but it was mistakenly named as an asset held by the couple, not as part of Ann Romney's trust. A campaign spokeswoman said Thursday that Romney will file amendments to both his 2007 and 2011 financial disclosures to correctly identify the bank account.

President Obama Successfully Endorsed and Supported an Act To Close Offshore Tax Avoidance Loopholes!