The IRS recently released Revenue Procedure 2017-31 which adds Belgium, Columbia and Portugal to the list of participates in the automatic exchange of information on bank interest paid to nonresident alien individuals for interest paid on or after January 1, 2017. Back in December, we discussed the previous additions to the list of participates and the implications of the expanding program. With these additional countries, there are now 43 countries participating in the automatic exchange program.
The IRS may only share information with a foreign government that has entered into a mutual information exchange agreement. The U.S. only enters into information exchange agreements after the U.S. Treasury and IRS are satisfied that the foreign government has strict confidentiality protocols and protections. The IRS is statutorily barred from sharing information with another country without such an agreement in place. All U.S. information exchange agreements require that the information exchanged under the agreement be treated and protected as secret by the foreign government.
As has been the case for the last decade, U.S. is ramping up enforcement through the use of information reporting requirements, which is one of the most effective tools it has to combat tax evasion.