Kevin Downing Quoted Regarding FATCA Compliance and Bank Investigations in Tax Notes Today

"Formal FATCA Compliance May Not Prevent Prosecution"
Tax Notes Today
06.11.14Kevin Downing was quoted regarding compliance with the Foreign Account Tax Compliance Act (FATCA) and the investigation of banks that avoid the law. Institutions should ensure that those who are tasked with compliance report to the appropriate firm officials -- not to the heads of business units who may be concerned that the compliance message could hurt their bottom line, Downing said. He added that problems can fester when the chain of reporting gets cut off at the business level. Institutions should identify their high-risk areas, with line-by-line analysis of business, jurisdiction, or particular account holders, which can help banks spot and remediate problems. Should a bank receive an inquiry from the government, it will be able to explain what it is doing to fix the problem. Downing added that banks should not over-rely on assertions from foreign lawyers about an entity's compliance with U.S. tax laws. In the past, foreign lawyers had "blessed" some ways that banks could get around the qualified intermediary rules and they might try to do the same thing for FATCA rules, he said.
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