Has FATCA succeeded in reducing tax evasion through foreign accounts?

Lisa De Simone and Bridget Stomberg

Oxford Review of Economic Policy, 2023, vol. 39, issue 3, 550-564

Abstract: The Foreign Account Tax Compliance Act (FATCA) spurred an unprecedented increase in the IRS’s ability to obtain information about assets held and income earned by US persons in foreign financial accounts, which were especially prone to illegal tax evasion. We review the evidence on FATCA’s efficacy at reducing tax evasion through foreign accounts and provide additional, longer-term evidence. We then discuss potential avenues for avoiding FATCA reporting. We also highlight other consequences of FATCA and provide exploratory analyses pointing to the use of the United States as a tax haven for foreign investors. We conclude with policy recommendations and suggestions for future research in areas where more analysis is needed.

Keywords: tax evasion; automatic exchange of information; cross-border deposits; offshore financial centres; tax amnesty (search for similar items in EconPapers)
Date: 2023
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