Multinational corporations with foreign operations are facing new tax compliance headaches, thanks to the Internal Revenue Service and the Department of Treasury pursuing offshore accounts they suspect are hiding from U.S. taxes.
Last month the IRS issued preliminary guidance on how it plans to interpret and apply reporting obligations for payments made to certain foreign financial institutions. The 62-page document follows enactment of the Hiring Incentives to Restore Employment Act, passed by Congress in March. That law includes a provision titled the Foreign Account Tax Compliance Act (FATCA), aimed at finding offshore accounts used to shelter income from U.S. ...