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Federal tax evasion law brings debate

Federal and state white collar crime laws carry sentencing that often surprises many by how extensive and severe the fines and possible prison times can prove. It's clear that the government takes offenses like tax evasion, fraud, identity theft, and embezzlement very seriously. Given that the means of white collar crime are by nature technology-based and fast-paced, the legal landscape these acts inhabit is also constantly adapting in order to better police potential offenders.

A new piece of white collar crime legislation specifically geared toward tax evasion has recently been announced, and given the sizable group of Connecticut citizens with off-shore financial holdings, local residents in Stamford, New Haven, and Greenwich will especially want to take notice.

The Foreign Account Tax Compliance Act, or FATCA, is designed to tackle tax evasion carried out through the use of foreign bank accounts. The measure requires foreign banks and financial institutions to report to U.S. tax authorities client information for any American customer holding over $50,000 in assets through one or more accounts.

Foreign compliance with FATCA is intended to be secured through a strict stipulation: any institution that fails to report in the way the act demands could be removed from the American marketplace beginning in 2014. This measure has a number of foreign financiers crying foul, with one official from China's central bank claiming the act makes "unreasonable costs for foreign financial institutions and directly contravenes many countries' privacy and data protection laws."

The Chinese official went on to note that FATCA is only projected to recover $8 billion in once-evaded tax revenue over the next decade. A more effective system, the man claimed, would coordinate between both American and host-country regulators.

While FATCA may be causing a global banking and tax debate, its effect upon the American tax payer is real and non-negotiable. In cases of white collar criminal charges, or even personal uncertainty over whether a crime may have inadvertently been committed, a criminal defense lawyer can both provide invaluable counsel and help to prepare the strongest case possible.

Source: Reuters, "China central bank official slams U.S. tax dodging law," Michael Flaherty, Nov. 28, 2012

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