White House Says Tax Avoidance, Evasion to Be Major Issues at G-8 Meeting

The White House continues its efforts on the pursuit of tax evasion and legal tax avoidance. Their focus includes companies that take advantage of U.S. tax laws to shift profits to no tax or low tax jurisdictions.

According to Caroline Atkinson, Special Assistant to the President for International Economic Affairs, The United States continues to push for a "single global standard" based on the Foreign Account Tax Compliance Act ("FATCA"). "We believe that's a very powerful tool. We've already seen it having a powerful effect on tax havens and illicit activity using such tax havens," Atkinson said. Under FATCA, U.S. taxpayers with specified foreign financial assets that exceed certain thresholds must report those assets to the Internal Revenue Service.

The United States is also working with the United Kingdom and other countries to improve the ability of tax authorities and law enforcement to identify the people behind shell companies that are set up to hide tax liabilities. What this means is that with a great focus on detection and government assistance in compliance, taxpayer may be further encouraged to come forward early.