WASHINGTON, Feb. 20 (UPI) -- The final substantial package of regulations designed to combat offshore tax evasion was released Thursday, the U.S. Treasury Department and the IRS said.
The regulations are necessary to implement the Foreign Account Tax Compliance Act, passed by Congress in 2010 to target illegal activities using offshore accounts to evade paying taxes, the Treasury Department said in a release.
Since its passage, the act has become the global standard for promoting tax transparency.
The proposed and temporary regulations released Thursday make additions and clarifications to previously issued FATCA regulations, as well as provide guidance to coordinate the act's rules with pre-existing due diligence, reporting, and withholding requirements under other provisions of the Internal Revenue Code, the department said.
"Offshore tax evasion undermines confidence in our tax system and deprives the United States of revenues necessary to protect and provide for its citizens," Treasury Secretary Jack Lew said. "There is significant momentum to implement FATCA across the globe, and we will continue to work closely with our international partners to combat these illicit activities and raise global tax standards."
FATCA seeks to obtain information on accounts held by U.S. taxpayers in other countries and, generally, requires U.S. financial institutions to withhold a portion of specified payments made to certain foreign financial institutions that do not agree to identify and report information on U.S. account holders.
The final regulations amend FATCA provisions and syncs FATCA regulations with existing tax rules.