Ask for Help, Uncle Sam: The Future of Global Tax Reporting

23 Pages Posted: 5 Feb 2012 Last revised: 16 Apr 2013

See all articles by Susan C. Morse

Susan C. Morse

University of Texas at Austin - School of Law

Date Written: December 14, 2012


The emerging U.S. Foreign Account Tax Compliance Act or “FATCA” system provides an innovative model for the future of offshore information reporting. But its bank-to-residence government, or B2G, model lacks a good enforcement mechanism, because the U.S. lacks jurisdiction over the non-U.S. banks and other foreign financial institutions targeted by the FATCA rules. In contrast, European nations’ approach to the problem of offshore information reporting takes a bank-to-bank governing jurisdiction-to-residence government, or B2G2G approach. This puts banking jurisdiction governments squarely in the middle of the reporting system.

The FATCA implementation project should seek non-U.S. government cooperation. Despite the possibility that FFIs or local auditors might adopt FATCA for reputational signaling reasons, the U.S. should open the possibility of successful traditional enforcement by presenting FATCA as a model for automatic global information reporting and building other nations’ cooperation in the project. The greater involvement of non-U.S. governments could take several forms, including direct assumption of reporting responsibility, assistance in the project of reconciling FATCA’s requirements with client confidentiality rules, inclusion of FATCA compliance in criteria for government inspection of non-U.S. banks or auditors, or adoption of parallel due diligence and/or reporting requirements.

U.S. administrators of FATCA can use several tactics to persuade non-U.S. governments to cooperate with the global information reporting project of FATCA. First, they could keep FATCA implementation as simple as possible. Second, they could offer similar reporting on non-U.S. holders of U.S. accounts at least on a reciprocal basis, and perhaps in the treaty context. Finally, they could consider side payments to non-U.S. governments to induce them to support the FATCA project.

Keywords: tax evasion, offshore accounts, Foreign Account Tax Compliance Act

JEL Classification: H26, K34

Suggested Citation

Morse, Susan C., Ask for Help, Uncle Sam: The Future of Global Tax Reporting (December 14, 2012). Villanova Law Review, Vol. 57(3) 529-550, 2012, UC Hastings Research Paper No. 35, Available at SSRN:

Susan C. Morse (Contact Author)

University of Texas at Austin - School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics