Beverly Chandler, Opalesque London: News that the IRS is postponing its Foreign Account Tax Compliance Act (FATCA) -related deadlines to a staggered start between January 1st 2014 and January 1st 2017 has been met with a mixed response. Jim Muir, director of AutoRek, a financial services data reconciliation firm, commented : "It may be considered a good thing for the authorities to be seen as listening to industry feedback. However, good, well-intended regulation, such as FATCA, should not be postponed simply because institutions are in a state of poor preparedness. In this case, the perception in the public eye may be that the regulators and authorities are simply too soft on banks and other financial institutions who have had quite some time to get ready for FATCA."
FATCA has caused consternation through the hedge fund industry, with speakers at the recent Opalesque New York Roundtable describing it as a 'train wreck’with Joe Taussig of Taussig Capital saying: "Tax revenues for the US from FATCA will be somewhere in the order of $7-10 billion, and
compliance could cost $1 trillion a year. There are over 100,000 financial institutions in the
world that will be daisy chained in this thing."
It is believed that the IRS is delaying FATCA implementation because of feedback that complying with the original deadlines is proving impractical. AutoRek’s Muir said: "What FATCA has achieved th......................
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