(CNSNews.com) -- Despite spending nearly $380 million to be in line with foreign tax-compliance rules, the Internal Revenue Service (IRS) took “limited or no action” in the matter and is still not prepared to enforce the Foreign Account Tax Compliance Act (FATCA), according to a new report by the Treasury Inspector General for Tax Administration (TIGTA), which oversees the IRS.
As TIGTA explains, “The U.S. Congress intended the Foreign Account Tax Compliance Act to improve U.S. taxpayer compliance with reporting foreign financial assets and offshore accounts.” The audit by TIGTA was done to “evaluate the IRS’s efforts to ensure that taxpayers, the FFIs [foreign financial institutions], and withholding agents comply with the FATCA.”
The FACTA was enacted in March 2010, more than eight years ago.
As a result of its audit, TIGTA “determined that, despite spending nearly $380 million, the IRS has taken limited or no action on a majority of the planned activities outlined in the FATCA Compliance Roadmap.”
“The reports filed by the FFIs did not include (or included invalid) Taxpayer Identification Numbers (TIN),” reported TIGTA. “As a result, the IRS’s efforts to match FFI and individual taxpayer data were unsuccessful, which affected the IRS’s ability to identify and enforce FATCA requirements for individual taxpayers.”
In addition, TIGTA found that the IRS’s most current version of the FATCA Compliance Roadmap was updated in January 2016, more than two years ago. The Roadmap is designed to show whether the IRS is in compliance with the FATCA.
Between fiscal years 2010 through 2017, the IRS has spent approximately $380 million to try to implement the FATCA program, reported the Inspector General.
“Despite the costs incurred to date, the IRS has taken partial, limited, or no action on 24 of the31 compliance activity templates,” reported TIGTA.
The Inspector General’s office made six recommendations to the IRS to improve the situation and to help ensure the IRS is following the Foreign Account Tax Compliance Act. According to TIGTA, the IRS agreed with four of the six recommendations.
AccountingToday reported that an IRS official disputed some of the reports findings and took issue with the report’s focus on the initial FATCA Compliance Roadmap.
“We agree with the importance of the enforcement efforts highlighted in the report. However, the narrow focus of the report should not be used to draw conclusions about the entirety of the IRS’s enforcement efforts in this area,” said Douglas W. O’Donnell, commissioner of the IRS’s Large Business and International Division, in response to the report.