(Reposted with permission from Rachel Berger, Director of Employment at Nefesh B'Nefesh) Israeli business newspaper, Globes, has recently reported that the Ministry of Finance is in late-stage talks with the US Department of the Treasury on a reciprocal agreement to transfer information concerning foreign resident bank accounts. Under U.S. tax law, U.S. persons (including American citizens living abroad) are required to report and pay taxes on income from all sources.Israel decided to seek an agreement with the US, under which the Israeli banks would have no contact with the IRS, but would be subject to the Israel Tax Authority. In addition, in the event of a fault, the Tax Authority, not the IRS, will impose penalties. This is good news for the banks, given that the US authorities are known to be aggressive in their penalties.