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Tax Implications of The HIRE & FACTA

“Kathleen and Lief, please correct the start date of FATCA, the tax-reporting part of the HIRE Act. You incorrectly reported the date of Jan. 1, 2013. Should be July 1, 2013. The IRS caves under international banking pressure for the second time just two weeks ago to extend the start date yet again.

“The IRS says that FATCA will save the United States US$8 billion over 10 years, while the bankers reply that it will cost them more than that to revise their data processing and reporting in just the first year!”

–George W., United States

Lief Simon replies:

Sorry, George, but we’ve got it right. Jan. 1, 2013, is the date when the changes related to individuals and their reporting requirements come into effect. I have no idea what the July 1, 2013, date that you refer to applies to and neither do any of my legal or tax contacts.

The requirements related to banks are separate. Because the international banking industry has complained loudly that it needs more time to comply with the new law…especially as not all guidelines have been issued yet…their deadline for compliance has been extended to Jan. 1, 2014.

However, as our readers are individuals, not banks, I don’t see the point confusing people further with referencing both deadlines.

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