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U.S. Government Opens Secure Portal for FATCA Reporting

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Financial institutions and tax administrators that have an obligation under U.S. tax law to report account information to the U.S. government now have a secure online site where they can transmit that information, the IRS announced on Monday.

The site, called the International Data Exchange Service (IDES), offers a web-based application that provides for encrypted transmission of data. Senders are expected to use a standard XML schema format that captures information the U.S. government is collecting under the Foreign Account Tax Compliance Act (FATCA) and to encrypt the data before transmission.

FATCA requires foreign financial institutions to report to the IRS information about financial accounts held by U.S. taxpayers or by foreign entities in which U.S. taxpayers hold a substantial interest. Some countries have agreements with the United States under which the country’s tax administration collects the information from domestic financial institutions and forwards that information to the IRS.

Financial institutions and tax administrators can enrol and create an online account at the IDES website.

The IRS also updated its IDES frequently asked questions website to address several technical issues.