There is no U.S. securities rule requiring banks to disclose foreign holders of U.S. assets to the U.S. government.
It's a similar picture in real estate. The National Association of Realtors reports that foreigners bought approximately 209,000 homes in the United States in the year ended in March 2015, for a total of $104 billion in value. The association says it doesn't know the total value of all homes purchased by foreigners over the past several decades. But much of the value accumulated in those transactions could be subject to the U.S. estate tax as well.
There doesn't appear to be any way for the IRS to calculate how much estate tax should apply to all that property: It's not even clear there is any way for the agency to learn about the deaths of foreign holders of U.S. real estate if the families involved do not voluntarily come forward.
But what is clear is that not very many foreigners are paying estate taxes on real estate. In 2014, according to IRS statistics, just 99 people from countries without an estate tax treaty filed taxable returns. Among the countries that do have such a treaty, the figure was even less: Just 72.
One estate tax expert, shown those IRS figures by CNBC, said the numbers are simply not plausible. "Seventy-two is not a believable number," said Beth Shapiro Kaufman, an attorney at the law firm Caplin & Drysdale who specializes in estate planning for wealthy individuals. "There must be some serious slippage here."
To Kaufman, who earlier in her career served in the Treasury Department's Office of Tax Policy overseeing tax policy matters affecting trusts and estates, the IRS' accounting for how much estate tax is actually paid by foreigners suggests a large amount of money is missing. "It appears that there are substantial amounts of tax not being paid," she said.
Why is that? Partly because most foreigners have no idea how U.S. tax law treats U.S. assets, Kaufman said. "A number of foreigners would be astounded to learn that they owed any U.S. tax," Kaufman said. Another reason is it would be difficult for the IRS to reach into foreign countries to try to collect the tax it says it is owed. "It could be a failure of enforcement when people are aware that they owe the taxes, but they simply don't pay because there isn't any enforcement mechanism for it," Kaufman said.
A spokesman for the IRS said the U.S. is focused on tax compliance. "The IRS is committed to stopping international tax evasion wherever it occurs and tackles the problem through multiple programs," said agency spokesman Dean Patterson in a statement to CNBC. "This applies to all types of taxes including income, estate and excise." Patterson also said that the IRS has global reach. "Even though the IRS has faced several years of budget reductions, the agency continues to pursue cases in all parts of the world," he said.
There are myriad difficulties in calculating how much estate tax should, in theory, be flowing into the U.S. Treasury. The first is figuring out how many foreign holders of U.S. assets die each year, a morbid task that no government or private agency appears to have assigned itself.
Also clouding the picture: the difficulty in understanding international tax treaty implications for those families in each country, and in calculating taxable valuations of the underlying assets once all deductions and exemptions have been applied. And there are a number of ways for savvy foreigners to plan their estates in advance to avoid having to pay the tax.
But to the Swiss banker, the situation is reminiscent of the days before the IRS cracked down on wealthy Americans who hid assets overseas, an effort that has generated $6.5 billion in back taxes and penalties from Americans who decided to confess their offshore accounts once the enforcement began. In that case, foreign banks found to be involved in helping those Americans hide assets were forced to pay hundreds of millions of dollars in penalties.