If you have a foreign bank account, especially in Switzerland or Israel, coming forward quickly is probably in your best interest.

The Israeli Finance Ministry announced that the United States and Israel have concluded the text of an intergovernmental agreement (IGA) to implement the Foreign Account Tax Compliance Act (FATCA). FATCA, enacted by the US Congress in 2010 and, taking effect on July 1, 2014, is intended to ensure that the US obtains information on accounts held at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.

To address situations where foreign law would prevent an FFI from complying with the terms of an FFI agreement, US Treasury has developed model IGAs. Under the terms of the Model 1 IGA between Israel and the US, Israeli FFIs will be required to report their information to the Israel Tax Authority, who will then automatically exchange the information with the US Treasury.

The automatic exchange of information will be reciprocal, and data will therefore also be available on accounts held in the US by Israeli residents.

This additional IGA continues the Treasury Department and IRS’s ratcheting up the pressure on US taxpayers with undisclosed foreign ban accounts.