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India and the U.S. Team Up Against Tax Evasion

Wednesday, November 11, 2015
The Prime Minister of India, Narendra Modi, has agreed to return billions of dollars of “black money” which is being hidden in foreign accounts abroad.  Much of this “black money” includes offshore accounts as well as monetary transactions that occur daily.  For example, an Indian business man may put one amount down on the books, while in reality, the total money that is exchanged is much more.  There are a large amount of land transactions throughout India that are conducted in cash, which includes a mix of “white” and some “black” monies. In reality, the end of this will not occur any time soon.

September 30, 2015 is the tax deadline for Indians to step forward to make tax payments, which will include any penalties and interest charges.  However, there is little compliance, even with the threat of jail time.  The deadline is approaching quickly and there are many complaints with the system.  Indians are looking for safe havens to hide their money and many are sending their family members out of the country so that they will be considered non-residents. Non-residents are able to receive money to hide when they are out of India.

U.S. taxpayers who conduct business either in India or with Indian businessmen have experienced issues due to black money. For that reason, the U.S. and India have joined forces to combat tax evasion with a new tax information sharing agreement.  The two nations have signed the Foreign Account Tax Compliance Act (FATCA). India has agreed to assist the IRS and the U.S. Department of Justice to find out if U.S. taxpayers are holding foreign accounts in India.  Having an offshore bank account is not illegal; however, taxpayers need to fully disclose their financial information on FBARs, also known as money laundering forms.  The U.S. taxes taxpayers on their worldwide income regardless of where they reside.  The offshore accounts need to be reported on taxpayer’s yearly tax returns, along with other accrued income, interest, or dividends.

India has been having issues with their citizens keeping money in offshore bank accounts and reporting less sales and revenue figures, as well as black money vs. white money problems.  India is working for global financial transparency as well as financial transparency within the country.

With FATCA, foreign banks must reveal any U.S. taxpayer with bank accounts holding amounts over $50,000. If they don’t comply, then FATCA will cuts off companies from access to the American markets and they will suffer financially.  Hundreds of nations around the globe are part of FATCA and have agreed to the law.

Do you need assistance with tax evasion?  Are you looking to hire tax evasion attorneys? The Strategic Tax Lawyers, LLP are tax evasion attorneys with years of experience.  They are here to help you with any tax issues you may have.  For a free consultation to assist you with your tax-related issues contact the Strategic Tax Lawyers at (800) 669-4775.