SOURCE: Garza & Harris

Garza & Harris

November 05, 2015 09:30 ET

Attorney Joe Garza Decries IRS Hypocrisy on Tax Information Sharing

DALLAS, TX--(Marketwired - Nov 5, 2015) - In a report published on Monday, the Tax Justice Network declared the United States a threat to global financial transparency. In its top 10 list, TJN ranked the U.S. as the third greatest offender, ranking behind Switzerland and Hong Kong. The United States' ranking stands in direct contrast to other countries reviewed in the report. Findings indicate that financial transparency is improving globally with most countries, especially in Europe. However, the U.S. has gone from sixth on the list to the third worst offender.

"What is exceptionally hypocritical about this report's findings is the United States' own measures regarding American-owned bank accounts abroad" said Senior Partner of firm Garza & Harris, Joe Garza.

The motions currently being enforced in the Euro Zone have in fact been influenced by FATCA, a U.S. law passed in 2010 which demands that any American-owned bank accounts containing over $50, 000 be reported to the IRS. So far, the act has proven successful thanks to the cooperation of foreign banks. "There has been little to no push back from the affected banks, and they have been largely cooperative with the U.S. Government" said Garza.

Ironically, the United States has refused to reciprocate, withholding information about European held accounts on U.S. soil. The new Automated Information Exchange developed by the Organization for Economic Co-operation and Development (OECD) requires the open exchange of this type of information between governments.

This response has garnished much frustration and anger across the globe. "The United States has relied on the cooperation and good faith of international banks to crack down on tax evaders," Garza says. "Their refusal to reciprocate may cause those relationships to strain."

According to the report, "the United States is the jurisdiction of greatest concern, having made few concessions and posing serious threats to emerging transparency initiatives." The Tax Justice Network's report goes on to say:

It is more of a cause for concern than any other individual country -- because of both the size of its offshore sector, and also its rather recalcitrant attitude to international co-operation and reform. Though the U.S. has been a pioneer in defending itself from foreign secrecy jurisdictions, aggressively taking on the Swiss banking establishment and setting up its technically quite strong Foreign Account Tax Compliance Act (FATCA) - it provides little information in return to other countries, making it a formidable, harmful and irresponsible secrecy jurisdiction at both the Federal and state levels.

The language of the report is very clear -- global tax decision makers are very concerned with the United States' lack of collaboration.

"Whatever the outcome, the US will have to rethink its stance or risk being cut off from the information about the foreign bank accounts of its citizens" remarks Garza.

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