Do More With Reuters
Partner Services

Hedge funds, private equity brace for US reports

Mon Jun 29, 2009 2:11pm IST
 
Email | Print | | Single Page
[-] Text [+]

By Kim Dixon

WASHINGTON (Reuters) - Hedge funds, private equity firms and other investors are scrambling to meet a looming deadline to report their offshore income, as U.S. tax collectors boost efforts to track foreign holdings.

The reports will give authorities a glimpse into just how much money U.S. citizens have tucked away in investment accounts overseas, believed to be in the tens of billions of dollars.

U.S. taxpayers have long been required to file "Report of Foreign Bank and Financial Account" forms with the government when they have holdings of more than $10,000 (6,000 pounds) in foreign banks.

A murky area, though, has been hedge funds, private equity firms and foreign funds, according to industry lawyers. An IRS official recently startled those industries by stating that the agency expects these investors to report offshore holdings. An initial deadline for filing is next Tuesday, June 30.

"There is a fairly good consensus among professionals in this area -- it's really a reinterpretation of what is a foreign financial account," said Mitch Nichter, an attorney in the investment management practice at Paul Hastings.

An IRS official, who was not authorized to be quoted, said there was no change in policy, just a clarification in light of the agency's renewed focus on the abusive use of offshore accounts.

"There has been no enforcement on this," in the past, said George Clarke, a white collar attorney at Miller & Chevalier in Washington, who says many of his clients have done nothing wrong but are being inadvertently pressured to file now.

The increased transparency is partially being driven by wealthy countries' hunt for revenue amid the global financial slump.  Continued...

Dubai Debt Fears

Villas are seen on the The Palm, Jumeirah, with Atlantis, The Palm, under construction on the breakwater (crescent), May 3, 2008.  REUTERS/Jumana El Heloueh

Banks outside the Gulf played down their exposure to Dubai debt, after fears the emirate could default and even derail world economic recovery prompted a sell-off in global markets.  Full Article | Slideshow 

India Investment Summit 2009
India Investment Summit 2009

Top executives and bankers discuss their own plans and the broader opportunities and challenges for India.  Full Coverage 

Photo
People stroll outside the Taj Mahal hotel ahead of the first anniversary of the militant attacks in Mumbai, November 24, 2009.  REUTERS/Punit Paranjpe
Investors worry about another attack

The risk of militants striking again worries investors who fear that a second attack similar to last year's Mumbai raids could shake the economy.  Full Article | Full Coverage 

Market Update

  • IndiaIndia
  • USUS
  • UKUK
  • Asia
  • Most Actives

road to Copenhagen

BLOGS

Photo
Calculated Move

Reliance aims big with $12 bln bid for LyondellBasell.  Blog 

SHOWCASE

Capital Raising
Capital Raising

Analysis - China banks' rush for billions could trip markets.  Full Article 

 
Photo
Bonus Payout

"Bonus" has become a dirty word on Wall Street.  Full Article 

 
Bubble trouble?
Bubble trouble?

With the BSE Sensex at around 17,000 points, are the Indian equity markets looking at a possible bubble?   Commentary 

 
Funding Blues
Funding Blues

A popular tactic used by Indian brokerages to raise money for rich clients is likely to be banned.  Full Article 

 
Recovery Path
Recovery Path

Indian techie logging out of downturn gloom.  Full Article 

 
Central Banks Cautious
Central Banks Cautious

Reuters tracks the policies of the world's top central banks as the debate over global economic recovery rages on.   Full Coverage 

 
Risky Proposal
Risky Proposal

Rupert Murdoch courts trouble if he blocks Google on news.  Full Article