At a hearing held by the Internal Revenue Service in Washington on Tuesday, spokesmen for such companies as Bank of New York Mellon and organisations like the World Council of Credit Unions described the difficulties businesses would face in attempting to be ready to collect and provide to US authorities detailed information on their American clients.
As reported, FATCA was signed into law in 2010 by President Obama as part of an effort to track down billions in undeclared offshore assets that the US Government believes many American citizens hold. It targets Americans who hold more than $50,000 in assets in foreign financial institutions, but of particular concern to banks is that their failure to comply would mean they could become subject to a 30% withholding tax on their own US income and assets.
Press reports of the hearing said IRS officials did not reveal whether they would respond to the requests by businesses to further delay or soften the rules, which are due to begin to take effect in January 2013. Earlier this year, the US did lessen the scope of the act and postponed some elements of it, but it remains a major concern for many companies.
