Exchanges of Information: What Does the IRS Receive? With Whom Does the IRS Speak?

Abstract

The U.S. government receives significant amounts of information regarding non-U.S. financial institutions, their U.S. customers, and schemes to assist those customers in avoiding taxation. Whether the information is received through domestic law, the offshore voluntary disclosure programs, income tax treaties, tax information exchange agreements, or in the future, FATCA, the data is voluminous and its content sheds light on information that is of interest to tax authorities in other jurisdictions. Although the global financial community has accepted information transparency with the U.S., and the information should be confidential under U.S. tax law, it is not clear that the information will stop with the Internal Revenue Service (IRS). Indeed, the infrastructure exists for the IRS to be a conduit of information to tax authorities around the world. This article explores the ways in which information is submitted to the IRS and the avenues available to the IRS to transfer the information to tax authorities in other jurisdictions.