Kim Majure is a principal in the International Tax Services group of the Washington National Tax practice, focusing on inbound and outbound tax planning and controversy. Kim advises clients on international tax planning and controversy issues, including cash management and deferral planning, withholding, cross-border financing and multinational structuring. View video.
Kim Majure: FATCA is a big trap for the unwary, particularly for the non-financials because they don't think of themselves as on the hot seat. They look at, you know, themselves. They say, "Well, I'm making something and selling something or distributing something or providing services. I really don't think of myself as a bank."
And the problem is that when you're going to bother to pass tax evasion legislation, you're going to go as broadly as possible because you don't want to miss anyone. And so, you know, again, like it tags everyone. In particular, it tags for very high-level compliance entities that are treated as financial institutions.
And so non-financials will always have a little bit of -- at least a little bit of financial activity or financial income or financial assets sitting around in their groups, and it's that if you concentrate those financial activities or assets or income in a particular entity, that magnitude of activities could trigger financial institution status, and that really surprises non-financial companies.