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The US Treasury Department issued final revisions on Thursday to regulations enforcing tax compliance by US citizens and foreign banks holding their accounts.
The revisions to regulations first issued in January 2013 come ahead of the scheduled July 1 implementation of the Foreign Account Tax Compliance Act (FATCA).
The 2010 law was intended to crack down on US citizens hiding assets in overseas accounts and the foreign banks that aid such tax evasion.
“Offshore tax evasion undermines confidence in our tax system and deprives the United States of revenues necessary to protect and provide for its citizens,” Treasury Secretary Jacob Lew said.
“There is significant momentum to implement FATCA across the globe, and we will continue to work closely with our international partners to combat these illicit activities and raise global tax standards.” The revisions come after the Treasury reported that the number of people renouncing US citizenship had soared since the new law took effect.
In the last three months of 2013 alone, more than 600 people filed paperwork to waive their affiliation to the United States, bringing the number to 3,000 in 2013. The rate was up from fewer than 1,000 in 2012 and more than 1,700 in 2011, the International Tax Blog reported.
The US taxes its citizens’ overseas income, unlike most other countries.
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