- The Washington Times - Tuesday, August 5, 2014

ANALYSIS/OPINION:

Richard Rahn’s commentary column “When money mischief goes global” (Web, July 28) is fundamentally incorrect about the common reporting standard for the automatic exchange of financial account information for tax purposes published last week by the Organization for Economic Cooperation and Development (OECD).

This standard was developed to help all countries fight tax evasion more effectively. If implemented by the United States, it would only affect foreign residents and would involve the exchange by the United States of the financial account information of foreigners to their country of residence only, and only if the United States has an information-sharing agreement in effect with the foreigner’s country of residence that allows for the automatic exchange of such information.

The standard published last week was modeled on the Foreign Account Tax Compliance Act (FATCA) enacted by the U.S. Congress. FATCA does require foreign financial institutions to report to the IRS financial information about U.S. citizens and residents. Both FATCA and the OECD standard have stringent confidentiality requirements and safeguards.

By establishing a single common standard for countries to use, the OECD has both strengthened global efforts to fight tax evasion and minimized compliance burdens on financial institutions by avoiding the proliferation of different standards around the world. For these reasons, the standard was welcomed by the Business and Industry Advisory Council.

GRACE PEREZ-NAVARRO

Deputy director

OECD Center for Tax Policy

Washington

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