Articles on Offshore Bank Accounts (12/18/12)

Villanova Law Review has the following series of articles arising from a Villanova seminar:

Introduction

OFFSHORE ACCOUNTS, CORPORATE INCOME SHIFTING, AND EXECUTIVE COMPENSATION
Leslie Book
Page 421, here.

This article is an introduction to the seminar and article topics,

Taxation of Offshore Accounts

SOME SUGGESTIONS FOR TAX REFORM
Michael C. Durst
Page 433, here.

This article is a short discussion of some ideas for reform.

GO WEST: HOW THE IRS SHOULD FOSTER INNOVATION IN ITS AGENTS
T. Keith Fogg
Page 441, here.

This article discusses the development of the original offshore initiative in the late 1990s, dealing with credit cards issued by banks in some Caribbean countries which seemed to offer an evidence proof method of repatriating money in offshore banks; but the John Doe summons to credit card companies and processers and good stealth detective work helped the IRS identify many U.S. taxpayers and the first offshore voluntary disclosure initiative drew in many taxpayers.

OFFSHORE ACCOUNTS: INSIDER’S SUMMARY OF FATCA AND ITS POTENTIAL FUTURE
J. Richard (Dick) Harvey, Jr.
Page 471, here.

The author says that this on FATCA is written for students and academics, professionals and hopefully some tax administrators.

THE USE OF VOLUNTARY DISCLOSURE INITIATIVES IN THE BATTLE AGAINST OFFSHORE TAX EVASION
Leandra Lederman
Page 499, here.

The author of this article says: 

This Article examines the advisability of continued use of voluntary disclosure initiatives as a tool in the fight  against international tax noncompliance.  Part II of the Article briefly discusses the history of IRS voluntary disclosure programs, focusing particularly on the offshore initiatives of 2003, 2009, 2011, and 2012.  In Part III, the Article evaluates the government’s approach to voluntary disclosure of offshore evasion in light of the literature on optimal tax amnesties, finding that the offshore tax amnesties meet some but not all of the elements of an optimal amnesty.  The Article concludes that the crackdown on offshore evasion has encouraged quite a number of taxpayers to make voluntary disclosures, but that the IRS’s repeated use of offshore voluntary disclosure initiatives may have diminishing returns unless the government continues to engage in well-publicized criminal prosecutions of tax evaders.

ASK FOR HELP, UNCLE SAM: THE FUTURE OF GLOBAL TAX REPORTING
Susan C. Morse
Page 529, here.

The author of this article concludes the article: 

The emerging U.S. 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 United States 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 United States should open the possibility of successful enforcement by presenting FATCA as a model for automatic global information reporting and building other nations’ commitment to 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.  The 2012 FATCA framework agreed to by the United States, France, Germany, Italy, and the UK, together with the negotiation over intergovernmental agreements based on U.S.-drafted models, provides an example of the kind of cooperative action possible under FATCA.  

U.S. administrators of FATCA can use tactics based on simplicity, reciprocity, and side payments to encourage non-U.S. governments to support the FATCA project.  Existing model agreements make use of the reciprocity tactic and, to some extent, the simplicity tactic.  FATCA administrators might also use the simplicity, reciprocity, and side payment tactics in incremental and varied fashion in seeking the cooperation of different jurisdictions in the effort to build a global automatic tax reporting system.

The web page for the edition of the law review, with links, is here.