Client Alert
| November 10, 2009
New Offshore Tax Abuse Bill Seeks Increased Transparency, Enhanced Reporting and Stronger Penalties
On October 27, 2009, House Ways and Means Committee Chairman Charles Rangel (D-NY) and Senate Finance Committee Chairman Max Baucus (D-MT), along with Ways and Means Select Revenue Measures Subcommittee Chairman Richard Neal (D-MA), and senior Senate Finance Committee member John Kerry (D-MA) introduced the “Foreign Account Tax Compliance Act of 2009” (the “Foreign Account Bill”),1 which is aimed at curbing the “growing use of foreign financial institutions, foreign trusts, and foreign corporations by U.S. individuals to evade U.S. tax.” The Foreign Account Bill promotes transparency and enhanced reporting with substantial “incentives” to comply. The bill also would repeal foreign-targeted exceptions to registration requirements for debt obligations and would subject certain dividend equivalent payments under notional principal contracts, such as totalreturn equity swaps, to US withholding tax.
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