FATCA: Losing Its Way by Victoria Ferauge (aka Victoria) and Lynne Swanson (aka Blaze) is in Accounting Today.
This extraterritorial law has sparked global fear, confusion, anger and controversy.
We also report:
Now that controversy has come home.
We assess how FATCA strayed so far from its original intent to combat offshore tax invasion. We find FATCA became lost by: Failure to do a realistic assessment; Failure to consult and involve all stakeholders; Changing directions; Complexity; and Unintended consequences.
Because of this:
FATCA has traveled far off the map from its original destination. Now no one—not the proponents or opponents of this law or the lawmakers and bureaucrats around the world making policy or even the average citizen cheering on the fight against tax evasion—can predict what the FATCA landscape will be down the road.
FATCA appears headed for a catastrophic collision.
The President, Congress, the Treasury Department and the IRS need to refocus on the original modest, laudable intent of FATCA to track down Americans removing their assets from the U.S. in order to illegally evade paying U.S. taxes.
Then they need to find improved ways to achieve that end.
“To restore fairness and balance” in the U.S. tax code must include “fairness and balance” for Americans living outside United States.
International cooperation in combating tax evasion should include developing true partnerships around the world that respect the laws, constitutions, sovereignty and interests of other nations.
Finally, we conclude:
If leaders fail to act quickly to restore global cooperation and respect, FATCA could represent one of the riskiest projects the U.S. has ever tried to push both at home and internationally.