Americans in Israel to face FATCA, IRS collectors || by David Shamah


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Dollars and shekels (photo credit: Olivier Fitoussi/Flash90)

The US is gearing up to reach out to American citizens abroad that it believes have not paid their fair share in taxes. Israel is set to begin enforcing new US rules on reporting the existence and activities of accounts in Israeli banks held by American citizens or dual-citizens. That is in addition to a marked increase in audits and investigations of American ex-pats in Israel by the US — to the extent that a rumor has surfaced that the Internal Revenue Service has opened a “branch office” in Israel to handle the volume of audits.

As of Tuesday, Israeli banks will no longer serve American customers who refuse to sign documents that will allow banks to report on their accounts to US authorities. New rules issued by the Bank of Israel will bring the country into full compliance with the requirements of FATCA — The Foreign Account Tax Compliance Act — which imposes harsh penalties on non-US banks that do not comply with US reporting requirements. The rules were listed in a note issued by the BOI to banks in Israel on Sunday.

US citizens — or dual Israeli-American citizens — who have accounts in Israeli banks are now required to sign documents authorizing the bank to reveal information about their assets to the IRS, the US Treasury, and the Justice Department. Customers who refuse to comply will be issued a bank check for the amount of money in their account, which will be closed down.

Read More Here:    Americans in Israel to face FATCA, IRS collectors

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