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To summarize the principal aspects of USA tax legislation commonly known as the “Foreign Account Tax Compliance Act” (“FATCA”) that may be relevant to non-USA investment funds.

Reviews the potential application of FATCA to non-USA investment funds in a question-and-answer format and summarizes the key FATCA compliance obligations that may apply to such funds.

FATCA presents a number of compliance and operational challenges for non-USA investment funds. Such funds should be aware of their status under FATCA and resulting compliance responsibilities to ensure that they are compliant with FATCA and thus not subject to USA withholding tax.

Practical guidance from experienced tax and investment funds lawyers that summarizes a complex body of law in a concise format.

The cost of compliance is an essential variable to consider when administering a tax system. One recent study estimates that the yearly federal tax compliance burden in the US exceeds $431 billion dollars, and this cost does not include the potential greatest cost of all – changes in taxpayer behavior that reduces economic efficiency (Laffer, Winegarden, & Childs, 2011). One example of such behavior is the renunciation of US citizenship due to the impact of the Foreign Account Tax Compliance Act (FATCA) reporting requirements. Using this context, our study examines how FATCA compliance costs can affect taxpayer behavior in a manner that reduces economic efficiency. We collected responses from 197 experienced US taxpayers living in the US. Our study finds that when tax compliance costs are high, taxpayers may be more likely to renounce their citizenship to avoid FATCA reporting requirements. We further learn that tax compliance costs may increase the likelihood of citizenship renunciation even in the presence of a minimal US tax burden. Supplemental mediation analysis demonstrates that one's perceived fairness of compliance does not mediate the effect of high compliance costs on a taxpayer's renunciation decision; however, one's perceived fairness of compliance and fear of sanctions, collectively, partially explain the effect of tax burden on the renunciation decision. In addition, we find that ethics, the perceived probability of detection, and average income level affect the decision to renounce citizenship. Our findings suggest broader impacts of tax policy and provide a foundation for future research to further explore domestic and foreign tax compliance behaviors.

This study uses a survey instrument to ask Americans living abroad about the impact of tax rules explicitly designed for these individuals. We analyze how individuals are affected by foreign tax reporting laws and how they perceive and evaluate the rules’ consequences. A common belief is that many of the foreign reporting provisions were enacted in order to eliminate or reduce tax evasion. The current political climate has increased lawmakers’ focus on tax issues related to foreign income and accounts, which lead to several new rules and regulations, such as the provisions in the Foreign Account Tax Compliance Act (FATCA), as well as an increased emphasis on the enforcement of existing laws.

Our results indicate that Americans living abroad experience FATCA negatively impacting their lives. Additionally, the respondents’ perceptions are consistent with the sentiment that their government is not concerned about the impact of the FATCA on its citizens living abroad.

The purpose of this paper is to explain the proposed Foreign Account Tax Compliance Act (FATCA) regulations released on February 8, 2012 by the US Treasury Department and the Internal Revenue Service (IRS).

The paper provides an overview of the changes to prior FATCA guidance in the proposed regulations, including the definition of a foreign financial institution (FFI), due diligence requirements to identify US accounts, procedures to verify compliance, phase‐in information required to be reported, verification procedures, definitions of FFIs that are “deemed” to meet the FATCA requirements, definition of “passthru” payments, explanation of exemptions from withholding related to certain “grandfathered obligations,” temporary relief for FFIs with non‐compliant affiliates, and a proposed intergovernmental approach to FATCA implementation through domestic reporting and reciprocal automatic exchange of information.

The paper reveals that the FATCA grew out of Congressional concern that US taxpayers were evading taxes by failing to report US‐source income on assets held abroad. The FATCA legislation left many of the details on implementation to the US Treasury and IRS. The intergovernmental framework is not a done deal. The proposed reciprocal, automatic exchange of information would be a sea change from existing US information reporting practices and is sure to be controversial.

The paper provides expert guidance from experienced financial institutions lawyers.

The purpose of this paper is to highlight areas of particular interest to non‐US investment funds in the second installment of the US Treasury Department's written guidance under the Foreign Account Tax Compliance Act (FATCA).

The paper explains the background to FATCA and the Treasury Department's guidance on procedures for identifying US accounts among pre‐existing individual accounts, “pass‐thru payments” to “recalcitrant account holders” or non‐compliant foreign financial institutions (FFIs), FFIs deemed to be FATCA‐compliant, and centralized compliance options for certain affiliated groups of FFIs; explains next steps and offers future guidance.

FATCA was enacted in March 2010 to ensure that there is no gap in the ability of the US government to determine the ownership of US assets in foreign accounts and to prevent offshore tax abuses by US persons – in particular to prevent a US person from escaping US tax liability by owning US assets through foreign accounts.

Various industry groups are expected to press Treasury for guidance that would alleviate the FATCA burdens on widely held investment vehicles and funds that prohibit investment by reportable US account holders. In the interim, non‐US funds should begin to decide whether to permit reportable US account holders and to determine who will be responsible for performing the due diligence required to identify US account holders.

The paper provides practical guidance from experienced financial services lawyers.

To explain the details and implications of a September 9, 2014 federal indictment, US v. Robert Bandfield, the first time a Foreign Account Tax Compliance Act (FATCA) violation has been charged as an “overt act” in furtherance of a tax conspiracy and securities fraud.

Provides background, including the enactment of FATCA and the details of the indictment; describes an undercover investigation conducted by President Obama’s Financial Fraud Enforcement Task Force; and discusses the warnings this indictment sends to the global financial community.

The indictment confirms the coordinated and aggressive tactics US law enforcement is now employing to investigate and prosecute offshore financial fraud.

Banks and financial service providers need to be aware of the impact of enhanced US regulatory obligations and implement appropriate compliance measures. These institutions must also remain sensitive to risks presented by unscrupulous customers. Finally, they must be ready to manage appropriately information-gathering and investigatory inquiries originating with US authorities.

Practical guidance from experienced tax controversy lawyers.

The United States is unique in how it imposes income taxation on their citizens living overseas, as if they lived in the United States. Neither US residents (regardless of citizenship) nor non-US citizens residing overseas are subjected to such a penalising system. The system is justified by the stigmatisation of overseas Americans as necessarily wealthy and whose purpose in living overseas is to avoid US taxation.

Because of penalising US taxation, overseas Americans struggle with ordinary activities required to sustain modern life. The activities include owning a home, holding a bank account, investing and planning for retirement, operating a business, holding certain jobs, and pursuing community service opportunities. The situation causes many to feel that they have no choice but to renounce US citizenship.

Ultimately, the question must be asked: Are Americans free to live outside the United States?

This paper aims to examine tax leakages in secrecy financial centres.

This qualitative study relies on primary data from relevant statutes and secondary data from the public domain and in particular academic sources. The study makes concurrent use of the case study approach.

The study reinforces existing suggestions that tax evasion is significantly widespread from advanced to emerging economies. It also suggests serious enforcement difficulties because of light-touch surveillance among competing tax havens and financial professionals. Further, while relevant laws are in place to deal with illicit activities, enhanced transparency is needed to quell the problem and, in this instance, public access to beneficial owner data such as exemplified by UK’s public registry approach. The US Foreign Account Tax Compliance Act is proving to be effective, and similar expectations are raised for the equivalent the Organisation for Economic Co-Operation and Development initiative from 2017 onwards.

The paper is constrained with the general limitations associated with qualitative studies. These are, however, mitigated by triangulations of perspectives and so on.

The findings have implications for policymakers and the business community.

The findings could help to narrow inequality gaps between and within economies.

The paper combines insights from high-profile cases with those from academic sources. The analysis is also undertaken from the combined perspectives of law, economics and accounting. It also focuses in secrecy issues in both offshore and onshore financial centres.

To discuss general legal considerations for non-US private equity sponsors who seek to market their funds to US institutional investors.

Explains relevant aspects of US securities laws, commodity exchange laws, pension and employee benefit plan laws, federal income tax laws, and the Foreign Account Tax Compliance Act (FATCA).

The evolving US regulatory regime necessitates careful planning and thorough knowledge of relevant laws and regulations to effect a successful US marketing effort.

Practical guidance from experienced investment funds and tax lawyers.

The purpose of this paper is to review the use and application of shell entities, as they facilitate crime and terrorism, impede investigations and harm societies.

The study details the types and characteristics of shell entities, reviews actual cases to exhibit how shells are abused, outlines reasons shells disguise beneficial ownership and analyzes steps taken by countries and organizations to thwart the abuse of shell entities.

Many types of shell entities are used by white-collar criminals and are often layered in an intricate network which conceals the identity of beneficial owners. Nominees and bearer shares are used in tandem with shell entities to optimize concealment. Accountants, lawyers and trust and company service providers facilitate and promote the use and abuse of shell entities by lawbreakers. The G-8, Financial Action Task Force and G-20 have begun steps to improve ownership transparency, but the effort is moving at a modest pace.

The analysis makes clear the reasons for and means by which the wealthy and powerful, along with criminals, conceal trillions of dollars of income and wealth that remain untaxed and may be used for nefarious purposes. The paper is limited by the paucity of data on concealed assets and their beneficial owners.

The findings clearly show the need for more concerted action by national governments, organizations, the United Nations and law enforcement and to improve ownership transparency and information exchange regarding shell entities.

The findings demonstrate that shell entities used to conceal wealth prevent untold trillions in taxes from being collected by governments worldwide. This lack of revenue facilitates income inequality and skews national economic and fiscal policies. Also, more white-collar criminals and terrorist financiers could be brought to justice if ownership transparency is improved.

This study adds to the limited literature on shell entities, their characteristics and uses and abuses.