Tax-Evasion Law Will Harm U.S. Asset Managers, BlackRock Says

Proposed regulations from the Internal Revenue Service that aim to prevent tax evasion by Americans with offshore accounts may hurt U.S. asset managers that offer funds to investors abroad.

Portfolio managers of global funds may not want to purchase U.S. securities because the funds would be subject to Fatca, or the Foreign Account Tax Compliance Act, if they invest in U.S. securities, Harris Horowitz, head of global tax for BlackRock Inc., said in a telephone interview. Foreign investors may also choose not to invest in funds that have U.S. securities because if they work with a foreign broker who isn’t compliant, they could be penalized, Horowitz said.