Governments seeking to recoup tax liabilities outside their borders often face a substantial hurdle in the form of the “Revenue Rule” which, as summarized by Lord Mansfield, provides that “no country ever takes notice of the revenue law of another.” Holman v. Johnson, 98 Eng. Rep. 1120, 1121 (1775). Courts in the United States have largely followed this long-standing common law doctrine. As a result, nations seeking to collect taxes from individuals or assets located within the United States have precious few avenues for relief. This column reviews the Revenue Rule and considers the apparent lack of enthusiasm for non-judicial Mutual Collection Assistance Requests designed to bypass the Rule, all pointing to the obstacles encountered by foreign governments pursuing tax revenues in the United States.

Rationale for the Revenue Rule

Under principles of international comity, courts typically permit foreign money judgments to be enforced against persons and assets in the United States. The Revenue Rule represents an important exception to this general approach, and the model Uniform Foreign Money Judgments Recognition Act, which has been substantially adopted by a majority of states, expressly excludes judgments for taxes. See Samuel D. Brunson, The U.S. as Tax Haven? Aiding Developing Countries by Revoking the Revenue Rule, 5 Colum. J. Tax. L. 170, 182 (2014).