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Using a Sledgehammer to Crack a Nut: Why FATCA Will Not Stand


Frederic Alain Behrens


University of Wisconsin, Platteville

April 9, 2013

Wisconsin Law Review, Vol. 2013, No. 1, pp. 205-236

Abstract:     
The Foreign Account Tax Compliance Act (FATCA) became law in 2010 and is an important development in combatting income tax evasion. Under FATCA, American individual and corporate taxpayers must provide comprehensive information to the Internal Revenue Service (IRS) regarding foreign bank accounts. In addition, a more controversial part of FATCA requires foreign banks to report directly to the IRS certain information about financial accounts held by American taxpayers.

These drastic changes in American tax policy are alarming to the international financial community. International banks are forced to implement expensive compliance programs to satisfy the information reporting requirements. An increasing number of foreign financial institutions will no longer want any involvement with American citizens or investments. Furthermore, Americans living abroad might be forced to denounce their American citizenship in order to gain access to insurance and basic banking options.

In response to the unilateral imposition of FATCA, foreign governments and banks may lobby for its repeal. This Comment examines factors in the global movement to repeal FATCA and suggests several workable solutions that would be agreeable to the United States and foreign nations. Specifically, this Comment suggests how investment income withholding and increased IRS enforcement actions are a better solution to prevent income tax evasion.

Number of Pages in PDF File: 32

Keywords: FATCA, tax, IRS, FBAR, offshore, foreign banks, FATCA repeal, withholding tax, tax policy, tax evasion, OVDI

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Date posted: April 10, 2013  

Suggested Citation

Behrens, Frederic Alain, Using a Sledgehammer to Crack a Nut: Why FATCA Will Not Stand (April 9, 2013). Wisconsin Law Review, Vol. 2013, No. 1, pp. 205-236. Available at SSRN: http://ssrn.com/abstract=2247615

Contact Information

Frederic Alain Behrens (Contact Author)
University of Wisconsin, Platteville ( email )
1 University Plaza
Platteville, WI 53818
United States
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