IRS’s FACTA ENFORCEMENT FELL SHORT

IRS’s FACTA enforcement fell short. As part of the new law P.L. 111-147, the Hiring Incentives to Restore Employment Act, which was passed in 2010, the Joint Committee on Taxation estimated it would bring in an additional $8.7 billion in revenues over the following 10 years, when it was passed in 2010. So the IRS then spent nearly $573 million on FACTA enforcement as of 2020, which is outlined in the FACTA Compliance Roadmap, outlined to Congress. But the IRS has since shunted its FACTA compliance effort into two smaller campaigns and general filed examinations. And while the total revenues attributable to the legislation are unclear, the IRS has collected less than $14 million under one key provision, the Sec. 6038D(d) penalty on taxpayers with interests in a specified foreign financial asset over $50,000 who fail to provide required foreign account information on Form 8938, Statement of Specified Foreign Financial Assets. IRS’s FACTA enforcement fell short.

The logistics of instituting a global reporting network, and beginning in 2020, the Covid pandemic, have hindered the effort, and the IRS has said that, just by its existence, the reporting regime has increased taxpayer compliance in reporting income from overseas. But a recent report from TIGTA points to over a decade of missed opportunities for collecting taxes. “The IRS has not come close to building the compliance plan that was originally contemplated,” said the report dated April 7, titled “Additional Actions are needed to address non-filing and non-reporting compliance under the FACTA Tax Compliance Act.”

The scale of those plans and the revenue estimate seem, if anything, modest, given the amount of U.S. taxpayer money potentially secreted overseas, as revealed in the Pandora and Panama Papers leaks of taxpayers skirting tax laws. If you have a FACTA tax debt and want options for Tax Resolution, you can contact this Tax Resolution Company for all options in the Internal Revenue Code for dealing with your tax debt, and reporting requirements. Is the IRS Fresh Start Program an alternative, or the other options not in that program ? Having a good Tax Professional can help you find the best alternative and the right option for Tax Relief for you.