Floor Statement of Senator Max Baucus (D-Mont.) Regarding the Foreign Account Tax Compliance Act Of 2009

Today, I am pleased to introduce the “Foreign Account Tax Compliance Act of 2009.”

The bill gives the IRS powerful tools to find US taxpayers who are hiding their money in offshore accounts. It includes strong incentives for individuals to properly report income from assets held in offshore accounts.

The days of sending your money offshore to avoid paying US taxes are over.

This package is the result of a collaborative effort with the House and has the support of the White House and the Treasury Department. It is fully consistent with the policies in the preliminary draft of offshore compliance proposals that I released in March of this year — to detect, deter, and discourage offshore tax evasion.

The bill is a practical solution to a very challenging problem. For the first time, the tax law would authorize the IRS to receive information reports from foreign financial institutions disclosing the identities of their US account holders and the amounts being held in the accounts.

Individuals with offshore accounts would be required to provide details of those accounts on their tax returns.

Trust rules would be significantly strengthened to prevent the true beneficiaries from hiding behind a nominee owner.

It will not be so easy to hide your money from Uncle Sam anymore.

Following the recommendation of the Government Accountability Office, the IRS would have more time, up to six years, to find and examine unreported and misreported offshore transactions.

Robust penalties would be in place for those who still try to skirt the rules.

This bill would improve tax compliance without raising taxes on anyone. These are taxes that already are legally owed.

Those who game the tax system by hiding their money in offshore accounts, like those in the recent UBS scandal, unfairly shift the tax burden to honest taxpayers who comply with their tax obligations. The IRS estimates that up to 52,000 individuals hid billions of dollars in offshore accounts through UBS.

Offshore tax evasion is a significant part of the tax gap and it has gone on long enough. I believe this bill will be a turning point in putting an end to offshore tax evasion.

I look forward to working with my Colleagues here in the Senate and in the House to enact this important piece of legislation this year.

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