IRS Invade Privacy of Foreign Banks - An Overview
There have been lots of questions and debates on the issue that the IRS invades the privacy of foreign banks. Well, contrary to what the IRS seems to think, there are perfectly legitimate reasons for an American to maintain an account in a foreign bank. It does make sense, at least for those who are involved in international business, to use such an account. At the same time, others like the fact that foreign banks may have lower annual fees and interest charges.
Regardless, the Bill of Rights was created to protect certain freedoms, and the Fourth Amendment was included to ensure that neither the government agents nor the IRS invade privacy foreign banks unless a court was presented enough evidence to justify a warrant.
The IRS invades the privacy of foreign banks. However, the IRS should not act as a Peeping Tom. Just because someone holds a credit card issued by a Luxembourg bank does not mean some bureaucrat has the right to pry into his or her private affairs. The IRS proposal also undermines national sovereignty. If we talk in general, the U.S. Government should not be demanding that foreign banks violate privacy laws in their home countries.
The IRS invades the privacy of foreign banks, and it is trying to justify its proposal by arguing that it will catch a few tax evaders, and it almost surely will do that. However, the thousand-dollar question is whether it is worth ignoring the Constitution and threatening America's fiscal sovereignty. You can seek more information if you would like to know more about this hot debate on whether the IRS invades the privacy of foreign banks.