Now Argentina Will Start Reporting U.S. Account Holders

Now Argentina Will Start Reporting U.S. Account Holders to IRS

Argentina Will Start Reporting U.S. Accounts Holders 

Several years ago, the U.S. government entered into numerous FATCA (Foreign Account Tax Compliance Act) agreements with countries across the globe. The purpose of FATCA was for the United States to enter into reciprocity agreements with foreign countries so that the foreign countries would report to the U.S. government with information about U.S. persons who have foreign accounts and income in their borders — and the United States would report foreign persons who have U.S. accounts to the foreign country. As a result of these agreements, hundreds of thousands of Foreign Financial Institutions (FFI) have started reporting account holder information to the United States government. Even though many of these agreements were entered into nearly ten years ago (2014), recently in late 2022 there was a new agreement signed between the United States and Argentina. Likewise, it was recently announced that the exchange of information between the United States and Argentina would begin this year. Let’s take a look at what this means for taxpayers who have accounts in Argentina.

Automatic Exchange of Information Set to Begin 

As provided by the FATCA Agreement:

• • • Whereas the Government of the United States of America and the Government of the Argentine Republic (each, a “Party,” and together, the “Parties”) desire to conclude an agreement to improve international tax compliance through mutual assistance in tax matters based on an effective infrastructure for the automatic exchange of information;

  • • Whereas the Agreement between the Government of the United States of America and the Government of the Argentine Republic for the Exchange of Information Relating to Taxes, done at Buenos Aires on December 23, 2016 (the “TIEA”) authorizes the exchange of information for tax purposes, including on an automatic basis;

  • • Whereas the United States of America enacted provisions commonly known as the Foreign Account Tax Compliance Act (“FATCA”), which introduce a reporting regime for financial institutions with respect to certain accounts;

Argentina Account and Asset Reporting 

U.S. persons who have bank accounts and other types of accounts and assets in Argentina should be aware of the different international information reporting requirements prepared for taxpayers who are U.S. citizens, lawful permanent residents, or foreign nationals who meet the substantial presence test coming there required to report their foreign accounts and assets each year to the U.S. government on various international information reporting forms. Some of the more common forms that taxpayers have to file are the FBAR and Form 8938.

Income Generated in Argentina

In addition to having to report the foreign accounts and assets to the U.S. government on various international information reporting forms, taxpayers are also required to include any income generated in Argentina on their U.S. tax return. Even if the taxpayer already pays taxes in Argentina and/or even if the income is tax-exempt in Argentina, the United States follows a worldwide income taxation model which means the income is still included on a US tax return. If the taxpayer already paid taxes in a foreign country such as Argentina, they may qualify for foreign tax credits.

Late Filing Penalties May be Reduced or Avoided

The failure to file these forms and report the accounts can lead to significant fines and penalties. For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs Prior Year Non-Compliance

Once a taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure. 

Contact our firm today for assistance.