IRS Audits Increase For Americans in Israel as Washington Looks to Boost Revenue
June 15th is the deadline for Americans living abroad to file their tax returns, and in Israel, accountants are noticing a trend – IRS audit rates on the rise.
“Most of my colleagues would agree that the audit rate is up significantly,” Alan R. Deutsch, a certified public accountant with offices in Israel told Haaretz. “The IRS is conducting large-scale audits to a degree I have not seen in the nearly 20 years I have been practicing in Israel. Those are the plain facts.”
The accountants who spoke with the Israeli paper said the increase in audits is line with Washington’s current policy of “tightening the screws” on tax evasion for Americans living outside the United States.
“With the new reporting requirements by Israeli banks under FATCA – the Foreign Account Tax Compliance Act – it is going to be more difficult for Americans living in Israel to avoid dealing with U.S. income tax returns in the future,” says Don Shrensky, whose firms deals with both Israeli and U.S. tax issues.
New rules have been put in place to identify financial accounts associated with Americans living abroad, including a reporting of income by domestic banks, placed into each account outside the U.S. This rule is set to become active in 2016 for income derived during 2015.