The U.S. Battle against Tax Evasion: New FATCA Agreements

Last updated on December 2, 2022

The U.S. has been targeting tax evasion through Foreign Account Tax Compliance Act (FATCA). Combating tax evasion is a long, hard battle, but the IRS is making rapid improvements. In November, the U.S. made FATCA agreements with the Caymans and Costa Rica. Many more agreements are expected to be made in the coming year.

The U.S. loses billions each year to tax evasion and tax fraud. The IRS has been targeting tax evasion committed by both individuals and corporations. Many large multinational corporations were scrutinized for tax evasion. The case of Apple Inc. is well-known. As it is difficult to limit tax evasion conducted by exploiting loopholes in the tax code, the IRS is now targeting tax evasion that is conducted by hiding income in tax havens.

The U.S. is increasing its FATCA influence. Many countries, including Germany, U.K., Mexico, France and Switzerland have already made FATCA agreements. As the U.S. is able to make agreements with more and more countries, tax evasion will hopefully start to plummet. For the U.S., it will mean billions of revenue that get lost in tax evasion.

The U.S. is steadily making it difficult for American taxpayers and corporations to evade taxes illegally. As for the legal methods used to evade taxes, it will require changes in the tax code.