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Has FATCA succeeded in reducing tax evasion through foreign accounts?

Author

Listed:
  • Lisa De Simone
  • Bridget Stomberg

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.

Suggested Citation

  • Lisa De Simone & Bridget Stomberg, 2023. "Has FATCA succeeded in reducing tax evasion through foreign accounts?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 39(3), pages 550-564.
    • Handle: RePEc:oup:oxford:v:39:y:2023:i:3:p:550-564.
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    File URL: http://hdl.handle.net/10.1093/oxrep/grad020
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