WASHINGTON — It will soon be a lot harder to use overseas accounts to hide income and assets from the IRS.
More than 77,000 foreign banks, investment funds, and other financial institutions have agreed to share information about US account holders with the IRS as part of a crackdown on tax evasion, the Treasury Department said. The list includes 515 Russian financial institutions and nearly 70 countries, including Switzerland, the Cayman Islands, and the Bahamas.
Banks that don’t share data face steep penalties when doing business in the United States. The law requires US banks to withhold 30 percent of certain payments to foreign banks that don’t participate in the program. US banks that fail to withhold the tax would be liable for it themselves.
The Treasury has been negotiating agreements in which foreign governments will collect the information from their banks and then share it with US authorities.