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The Offshore World According to FATCA: New Evidence on the Foreign Wealth of U.S. Households

Author

Listed:
  • Niels Johannesen
  • Daniel Reck
  • Max Risch
  • Joel Slemrod
  • John Guyton
  • Patrick Langetieg

Abstract

This paper uses account-level information, reported to the IRS by foreign financial institutions under the Foreign Account Tax Compliance Act (FATCA), to produce new evidence on the foreign financial wealth of U.S. households. We find that U.S. taxpayers hold around $4 trillion in foreign accounts, almost half in jurisdictions usually considered tax havens. Combining the FATCA reports with other administrative tax data and tracing account ownership through partnerships, we document a steep income gradient in the propensity to hold assets in foreign financial institutions. Specifically, more than 60% of the individuals in the top 0.01% of the income distribution own foreign accounts, the vast majority in tax havens and more than half through a partnership. We discuss the likely implications of these findings for the overall impact of FATCA on tax compliance and government revenue.

Suggested Citation

  • Niels Johannesen & Daniel Reck & Max Risch & Joel Slemrod & John Guyton & Patrick Langetieg, 2023. "The Offshore World According to FATCA: New Evidence on the Foreign Wealth of U.S. Households," NBER Working Papers 31055, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31055
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    Cited by:

    1. Giulia Aliprandi & Thijs Busschots & Carlos Oliveira, 2023. "Mapping the global geography of shell companies," Post-Print hal-04563980, HAL.
    2. Jeanne Bomare & Matthew Collin, 2025. "When Bankers Become Informants: Behavioral Effects of Automatic Exchange of Information," Working Papers 033, EU Tax Observatory.
    3. Davis, J. Scott & van Wincoop, Eric, 2024. "A theory of capital flow retrenchment," Journal of International Economics, Elsevier, vol. 150(C).
    4. Hjalte Fejerskov Boas & Matthew Collin & Sarah Godar & Carolina Moura & Andreas Økland, 2025. "Assessing the coverage of the automatic exchange of information under the CRS," Reports 007, EU Tax Observatory.
    5. Niels Johannesen, 2024. "Offshore tax evasion in developing countries: Evidence and policy discussion," WIDER Working Paper Series wp-2024-15, World Institute for Development Economic Research (UNU-WIDER).
    6. Advani, Arun & Summers, Andy & Tarrant, Hannah, 2025. "Measuring top wealth shares in the UK," European Economic Review, Elsevier, vol. 178(C).
    7. Enea Baselgia, 2023. "The Compliance Effects of the Automatic Exchange of Information: Evidence from the Swiss Tax Amnesty," Working Papers 019, EU Tax Observatory.
    8. Rosanne Altshuler & Lysle Boller & Juan Carlos Suárez Serrato, 2025. "Turning on the Light: A New Assessment of Measurement Error in International Tax Data," Tax Policy and the Economy, University of Chicago Press, vol. 39(1), pages 83-116.
    9. Enea Baselgia, 2025. "The Compliance Effects of the Automatic Exchange of Information: Evidence from the Swiss Tax Amnesty," CESifo Working Paper Series 11615, CESifo.

    More about this item

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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