Foreign Account Tax Compliance Act

Tax avoidance has become a massive topic of discussion over the past few years, given the current global economic conditions and the cuts to the public sector by the government as a result. This led to increased anger from the public who perceive avoidance by many of the country’s wealthiest people in a time of austerity as greed. Perhaps the most notable demonstration of this anger can be seen in the actions of the group UK Uncut, who for the past year have been organising protests at shops owned by retail tycoon Philip Green who, as the poster boy for tax avoidance, paid a £1.2 billion dividend to his Monaco-resident wife.

For many years the IRS has been demanding taxpayers with foreign financial accounts to be in compliance with the law. The FBAR is an informational return that was designed to fight the tax avoidance. The law requires a US person to file the FBAR if the US person has a financial interest or signature authority in a bank account located in a foreign country and the combined value of all foreign financial accounts is $10,000 or higher during any day of the calendar year. A US person is a US Citizen, US resident, US entity incorporated in the US and formed under the US law. Accordingly, the entities required to file the FBAR are corporations, partnerships, limited liability companies, estates, and trusts. The financial accounts that must be reported in the FBAR are securities, brokerage, savings, demand, checking, deposit, time deposit, and other accounts maintained with a financial institution.

With the advancements in the globalization of the economy, corporations are finding more ways to avoid the extraordinary tax rates set in place of The United States Of America. With the loss of revenue from large companies dodging taxes the government must make up for the loss by either raising taxes or changing the tax code. A recent company to avoid american taxes is Johnson Controls, a company that “…would not exist as it is today but for American taxpayers, who paid $80 billion in 2008…”(The Editorial Board). This use of American resources to get through tough times, and run to another county during an economic incline is an act that calls for reform in the American tax system. However congress has not passed any legislation to fix the

Companies in the US are finding clever deceiving ways to get what they want. Many companies like Google are investing offshore to avoid American taxes. Others like the company Monsanto uses

Now, many of these banking groups are owned by foreign investors, despite attempted safeguards. This ownership has provided investors leverage and influence over the actions of the government because the government owes an exorbitant amount to these banks (Daniel Lederman). The same argument can be made about the United States’ government. This influence can be seen across the board as many decisions now seem to favor only a select few, forgetting about the ramifications for the many.

Morrison suggests that government should try to make regulations that can make TBTF policy effective rather than, try to end the policy, which is impossible. Morrison discusses the role of the policy in designing suitable capital regulations, in the restriction of bank scope and in institutional design. The author argues that financial institutions receive help from taxpayers and government because regulatory authorities believe that its failure would have severe effects on the country’s economy.

Differences in banking regulations across borders permit the most efficient channeling of funds from lenders to borrowers, leading to increased investment and thus increased GDP. Therefore it is imperative that policy makers prudently evaluate the possible consequences and benefits of harmonized banking regulations, as demonstrated by similar regulations instituted domestically, before any such endeavor is embarked upon.

On the other hand, tax evasion by definition is the use of “illegal means to avoid paying taxes and involves and individual or corporation misrepresenting their income to the Internal Revenue Service” and is considered fraud. An

The Act was criticized for being made appropriate to all foreign issuers listed on a U.S. exchange, even though several of the behavior the Act targeted was either a non-issue in foreign countries or was already efficiently regulated. According to Fraser, I. (Oct., 2002) this broad extraterritorial scope is particularly problematic given that the SEC has encouraged foreign issuers to enter U.S. capital markets by providing several accommodations to foreign practices and polices not inconsistent with the protection of U.S. investors. Foreign companies dispute that, as of the end of 2001, more than 1,300 foreign issuers had entered U.S. capital markets and became reporting companies in reliance on the SEC's accommodations.

Although, first we need to understand a bit more about the case before we can take a look at it through ethical eyes. The truth of the case here is privacy, something that most people of American believe in, however there is a big calling for transparency as well. Privacy allows people to guard things that they think is no one else’s business. As for this case of financial privacy about offshore accounts, it’s a type of privacy for personal financial information and the wealthy. The rich have a different view for this privacy, some decide to try and hide their wealth so they help determine which friends are their true friends and not friends that are just after their money. They also might use this privacy to hide their social class as well. The less people know about one’s assets, in particularly one’s inherited assets, the more it

The main concept of the article is to explain why the New International Financial Architecture (NIFA) was created and who is being benefited from this approach. The discussion begins with an examination of the power structures of the global political economy by focusing on the continued dominance of the USA. The article presents the contradictory relations between USA and global finance will be explored so as to shed more critical light on the NIFA. This article critically examines the NIFA by linking its institutional components to the larger contradictions of the capitalist inter-state system. A contradiction is the constant promotion of financial liberalization in emerging

The United States is in a recession; it has been facing some of the worse economic times since the Great Depression in the 1930’s. One option to fix the economy is to change the corporate tax rate. To lower it or to raise it, that is the question economists have been speculating. America's high corporate tax rate and worldwide system of taxation discourages U.S. companies from sending their foreign-source revenue home, which makes U.S. companies defenseless to foreign acquisition from the international opponents (Camp). Corporations and United States citizens have been fighting for a tax reform, which would hopefully help the American economy; either by lowering the corporate tax, or by raising the tax.

Financial regulation is necessary and without an efficient set of regulations a country could see rises in unemployment, interest rates, and the deterioration of financial intermediaries. With the globalization of the financial industry, it becomes more and more common for businesses to seek financing outside of their county 's boarders. These innovations in the financial industry stress why it is so important for regulations to be created and changed to reduce risk and asymmetric information in financial systems.

Within the novel, The Confessions of an Economic Hit Man, the author provides many strengths that can be depicted very strongly throughout it. The first one to which comes to appear almost in every chapter is the exposure of financial institutions that include the World Bank, International Monetary Fund (IMF) and General Agreement of Tariffs and Trade (GATT) (Hamann, 12). These are the major financial institutions that have a great impact still to this day of how loans and currency exchanges are dealt

It is for this reason why those who oppose offshore banking wish to regulate its use.