Wednesday, May 1, 2013

Recent academic scholarship on FATCA

It seems to me that academic attention to FATCA is on the rise. Here is a roundup of recent lectures & publications by law professors (and one student):

Steven Dean delivered a lecture at the University of Antwerp entitled FATCA's Unanswered Questions, description:
Like an asteroid passing close to Earth, the threat of FATCA's implementation has caused great anxiety and much activity. Despite the existence of important questions about FATCA's implementation, it has caused even some of the most reluctant foreign governments to embrace information reporting obligations. Tracing FATCA's origins offers useful insights regarding its likely effects. Even if it ultimately "misses" as a commitment device, FATCA will have a lasting impact on global tax administration.
Susan Morse published a reply to my article on the dubious legal pedigree of FATCA agreements, entitled Why FATCA Intergovermental Agreements Bind the U.S. Government, abstract:
Bilateral intergovernmental agreements (IGAs) relating to the Foreign Account Tax Compliance Act (FATCA) and entered into by the U.S. government reduce the reach of FATCA's withholding tax regime, including the reach of that regime as applied to non-U.S. taxpayers. The validity of these IGAs has been questioned. Yet IGAs have a strong case for binding status as valid congressional-executive agreements or treaty-based agreements. In addition, regardless of IGAs’ status as international agreements, they should bind the U.S. government as valid administrative guidance.
Frederic Behrens (law student) published Using a Sledgehammer to Crack a Nut: Why FATCA Will Not Stand, 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.

And Itai Grinburg delivered a new paper at NYU, entitled Emerging Countries and the Taxation of Offshore Accounts, abstract:
A new international regime in which financial institutions function as cross-border tax intermediaries is emerging. The contours of that regime will be established during a narrow window of opportunity over the span of the next few years. The resulting regime will have especially important consequences for emerging countries. A uniform, multilateral automatic information exchange system would improve both these jurisdictions’ ability to tax the offshore accounts of their residents and their capacity to tax certain domestic-source income from capital. 
Interestingly, multinational financial institutions’ and emerging countries’ concerns with the emerging international regime are largely aligned. As a result, they may find that they are improbable allies in the battle over taxing offshore accounts. With the G-20 as an agenda-setter and international financial law as the model, a governance structure for an automatic information exchange regime that could be useful to emerging countries’ tax administrations and lower multinational financial institutions’ compliance costs could materialize. The paper explores the necessary architecture, as well as steps emerging countries may take to help that architecture develop.
Many different perspectives emerging. Have I missed any recent scholarship? Please do bring it to my attention if so.


  1. I am curious as to what Steven Dean had to say. I don't know if he still posts here.

  2. Second issue. There were a bunch a papers published five or six years ago that dealt with exit tax and expatriation law issues however I have not seen anything since or anything that ties exit tax issues to FATCA.

  3. The Standing Committee on Finance just published its report on tax havens and tax evasions. A couple of conclusions both the main report(Conservatives) and Liberal Party supplemental reject an a multilateral exchange of information system. Instead the suggest continuing TIEA's as the international "standard." The NDP supplemental does support a multilateral AEofI system. All three parties reject a Canadian unilateral FATCA regime and none of them give any hints as to where they stand on FATCA IGA's.


    Standing committee on Finance report