IRS Launches System Banks, Tax Authorities Will Use for FATCA

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Jan. 12 — The IRS has launched the system that foreign banks and tax authorities will use to send U.S. account information to this country under the Foreign Account Tax Compliance Act.

“The opening of the International Data Exchange Service is a milestone in the implementation of FATCA,” Internal Revenue Service Commissioner John Koskinen said in a Jan. 12 news release (IR-2015-1) announcing the system.

Financial institutions and host country tax authorities will use the system to securely send data on accounts held by U.S. persons to the IRS, he said. Foreign banks can use the system to share the information directly with the IRS. Alternatively, IDES can be used to send the information under the terms of an intergovernmental agreement (IGA), which allows data to be transmitted between taxing authorities.