US Launches Automated Tax System to Help Detect Hidden Bank Accounts
US Launches Automated Tax System to Help Detect Hidden Bank Accounts © AP Photo/ J. David Ake
04:47 13.01.2015(updated 06:16 13.01.2015)
WASHINGTON, January 13 (Sputnik) – The US Internal Revenue Service (IRS) will open an International Data Exchange Service (IDES) that could be used by financial institutions and tax revenue authorities in host countries to report information on US citizens’ financial accounts, the IRS has announced.
“The opening of the International Data Exchange Service [IDES] is a milestone in the implementation of FATCA [Foreign Account Tax Compliance Act],” IRS Commissioner John Koskinen said in a statement Monday.
“With it, comes the start of a secure system of automated, standardized information exchanges among government tax authorities. This will enhance our ability to detect hidden accounts and help to ensure fairness in the tax system,” Koskinen explained.
According to the IRS, over 145,000 financial institutions have registered through the agency’s FATCA system and more than 110 corresponding intergovernmental agreements have been signed “or agreed in substance”.
The IDES works through a web application, where the sender encrypts the data and the IDES then encrypts the transmission pathway, so that the data transfers are protected.
IRS is the revenue service of the US federal government, responsible for collecting taxes and administering the Internal Revenue Code, which is the source of all tax law in the United States.