The Eighth Amendment and Tax Evasion: Whether FATCA Non-Compliance Fines and FBAR Penalties Are Excessive
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THE EIGHTH AMENDMENT AND TAX EVASION:
WHETHER FATCA NON-COMPLIANCE FINES AND
FBAR PENALTIES ARE EXCESSIVE
Tyler R. Murray
INTRODUCTION
Globalization and technological development have contributed to one of the
most pressing issues in the United States-offshore tax evasion.' Although it is dif-
ficult to estimate the exact amount of revenue losses from offshore tax abuses, the
United States loses approximately $100 billion per year from offshore tax evasion.2
The problem was highlighted in 2008 when the United States Department of Justice's
Tax Division investigated Switzerland's largest bank, UBS AG.3 In 2009, UBS AG
admitted to defrauding the United States by impeding the Internal Revenue Service's
(IRS) collection of tax revenues from U.S. taxpayers and paid $780 million in fines,
penalties, interest, and restitution to the United States.4 More recent than the UBS AG
scandal, the Tax Division has assisted the investigation of many other prominent banks
throughout the world that have conspired to defraud the United States.5 As of the
* J.D., William & Mary Law School, 2016; M.S.Ed., University of Pennsylvania, 2013;
B.B.A., Southern Methodist University, 2012. I would like to thank my family and friends for
their unconditional support. Also, I must express my sincere gratitude to the wonderful editors
ofthe William & Mary Bill ofRights Journal for the amount of time they devote to each Article
and Note.
See Offshore Compliance Initiative, U.S. DEP'T JUST., http://www.justice.gov/tax
/offshore_compliance initiative [http://perma.cc/J56J-R58J] (One of the Tax Division's
top litigation priorities is combatting the serious problem of non-compliance with our tax
laws by U.S. taxpayers using secret offshore bank accounts.); see also Tracy A. Kaye, Inno-
vations in the War on Tax Evasion, 2014 BYU L. REv. 363, 364-65 (2014).
2 JANE G. GRAVELLE, CONG. RESEARCH SERV., R40623, TAX HAVENS: INTERNATIONAL
TAx AVOIDANCE AND EVASION 1 (2015); Frederic Behrens, Using a Sledgehammer to Crack
a Nut: Why FATCA Will Not Stand, 2013 Wis. L. REV. 205, 211 (2013).
3 Offshore Compliance Initiative, supra note 1.
4 Id.
' See id (The Tax Division has opened investigations into numerous additional offshore
banks located in Switzerland, India, Israel and elsewhere. From 2008 through April 2013,
the Tax Division has charged over 30 banking professionals and 60 account holders, thus far
resulting in five convictions after trial and 55 guilty pleas, including 2 trial convictions and 16
guilty pleas in the first four months of 2013 alone.); Credit Suisse Sentencedfor Conspiracy
to Help U.S. Taxpayers Hide Offsho re Accountsfrom Internal Revenue Service, U.S. DEP'T JUST.
(Nov. 21,2014), http://www.justice.gov/opa/pr/credit-suisse-sentenced-conspiracy-help-us
-taxpayers-hide-offshore-accounts-intemal-revenue [http://perma.cc/RSL6-VT97] [hereinafter
Credit Suisse Sentenced] (explaining that on November 21, 2014, Credit Suisse AG, a Swiss](ViewImageLocal?handle=hein.journals/wmbrts24&div=19&collection=&method=preview&ext=.png&size=3)
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The Eighth Amendment and Tax Evasion: Whether FATCA Non-Compliance Fines and FBAR Penalties Are Excessive
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