WASHINGTON (Reuters) — In a win for the
Obama administration's fight against offshore tax evasion, a U.S.
federal judge on Monday dismissed a lawsuit challenging new rules
forcing U.S. banks to tell the Internal Revenue Service about certain
accounts held by foreigners.
Set to take effect in March, the rules are part of a fast-emerging
global web of bank information-sharing agreements between the United
States and many other countries meant to combat the hiding of assets
abroad to avoid paying taxes.
Bank industry lobbying groups in Texas and Florida in April
challenged the U.S. rules in a lawsuit against the Treasury
Department and the IRS, saying the rules were burdensome and would
discourage U.S. foreign investment.
Judge James Boasberg of the U.S. District Court for the District of
Columbia, in a 23-page opinion, dismissed the lawsuit, finding that
the new rules "would cause minimal burden to banks and their
customers."
Written in 2012, the rule would require disclosure by U.S. banks of
information about accounts held by non-resident aliens that earn at
least $10 of interest per year.
"The court's opinion today represents an important step in our
commitment to work with our treaty partners to eliminate
cross-border tax evasion," said Assistant Attorney General Kathryn
Keneally, head of Justice's tax division, in a statement.
A lawyer representing the banking associations could not immediately
be reached late on Monday.
The new reporting requirements help the
United States implement the Foreign Account Tax Compliance Act
(FACTA), the Justice Department said.
Approved by Congress in 2010, FATCA is driving the rapid worldwide
expansion of a network of bilateral tax information-sharing
agreements, negotiated by the U.S. Treasury and its overseas
counterparts amid heightened global concern about tax dodging. FATCA
is set to take effect in July 2014.
The case is Florida Bankers Association v. U.S. Department of
Treasury, U.S. District Court for the District of Columbia, No.
13-529.
