The Foreign Account Tax Compliance Act (FATCA) was enacted as part of the Hiring Incentives to Restore Employment Act (HIRE Act) in March 2010 to serve as an administrative tool to prevent and detect US tax evasion and improve taxpayer compliance. Following a series of Internal Revenue Service (IRS) notices on a number of issues and comment letters from industry, the US Department of the Treasury (Treasury) and the IRS released proposed FATCA regulations in February 2012.
Final FATCA regulations, released in January 2013, provide significant clarity on a number of open items the insurance industry had identified in the proposed regulations. While some of the provisions in the final regulations attempt to simplify the impact on the insurance industry, other provisions have ultimately complicated FATCA's impact.
As the insurance industry works to be FATCA compliant by January 1, 2014, we have attempted to highlight the 13 key areas to concentrate on through the remainder of 2013 as you move your FATCA Program from impact assessment into implementation.