Another year, another deadline. The ATO has until 30 September to hand over another tranche of Australian bank details to the IRS under the FATCA IGA. Last year they were almost a week early when they handed over details of more than 30,000 accounts containing more than $5 billion for an average balance greater than $160,000. What will they send this year?
Of course, governments around the world are sending data to the IRS. Some lawmakers are beginning to question whether this is appropriate. In Canada earlier this year, an opposition MP tabled a series of questions for the Canada Revenue Agency on that country’s 2015 FATCA data transmission. The answers were less than satisfactory. For many of the questions the answer was simply that they didn’t know. About all they learned was that about 62% of the records were associated with Canadian addresses; 35.5% were associated with US addresses; and the remaining 2.5% were from elsewhere. So significantly more than half of the records were reporting the income of Canadian residents to a foreign government so that government could assess and collect tax on Canadian source income!
It’s time to get some answers here in Australia about exactly what information is being turned over to the IRS. The following questions should be put to the ATO:
- Of the records sent to the IRS in both 2015 and 2016, how many were individual accounts; how many were entity accounts?
- How many account holders were: Australian residents; US residents; residents of other jurisdictions?
- Of the Australian resident individual account holders (or beneficial owners of entity accounts), how many were Australian citizens, permanent residents, temporary residents?
- Can the ATO confirm that all reported accounts were above the USD 50,000 threshold?
- Were the account holders of reported accounts informed that their information was sent to the IRS? Were they given the opportunity to verify that the information sent was correct?
- Regarding reciprocity, has the ATO received any information from the IRS that it would not have received without the FATCA IGA? If so, how many records/accounts and what is the total/average account balance? When was this information received?
- The IRS has had some well publicised data breaches, as well as identity theft rings working inside the agency. In the event that the FATCA data entrusted to the IRS is compromised, what steps will the ATO take to help the affected individuals and entities deal with the risk of identity theft?