5 European Nations Agree to Help U.S. Crack Down on Tax Evasion PARIS - Washington won important backing Wednesday for an effort to identify offshore accounts held by Americans, as key European allies agreed to help. In a joint statement, the United States, France, Germany, Italy, Spain and Britain said they wanted "to intensify their cooperation in combating international tax evasion." In return, Washington has agreed to "reciprocate in collecting and exchanging" information about U.S. accounts held by residents of those countries. The agreement concerns the Foreign Account Tax Compliance Act, known as Fatca, which became law as part of a 2010 jobs bill. Fatca is meant to help the U.S. Internal Revenue Service identify hidden accounts and other assets held overseas by Americans, but the law has caused an outcry among foreign financial institutions that fear the cost of compliance as well as what they have said are unrealistically tight implementation deadlines. There were also concerns that Fatca - which will require that virtually every financial institution in the world report any accounts held by Americans, with a withholding penalty for noncompliance - would put banks into a position of violating national secrecy laws to comply. The United States and the five European countries said Wednesday that they would get around the secrecy problem by having financial institutions share data with their own governments, which would then share with Washington. The European Commission, the executive arm of the European Union, welcomed the government-to-government approach, saying it would greatly reduce "the administrative burden, compliance costs and legal difficulties." The U.S. Congress estimated that Fatca would raise up to $1 billion a year for 10 years after implementation, a cost that banks have argued will be dwarfed by the cost of compliance, which has been estimated at up to $100 million for each multinational bank, according to the European Commission. Algirdas Semeta, the E.U. tax commissioner, said he was confident that the information-sharing deal would help to accomplish the common goal of addressing international tax evasion "in a business-friendly manner." U.S. Treasury officials say privately that they hope other countries that have raised objections to Fatca, including Canada, Switzerland, China and Japan, will see the benefits of the approach announced Wednesday and that the agreement is almost certain to expand. They say discussions with other countries are continuing. The necessity of getting China on board for any such global deal is evident, as evidenced by Beijing's announcement this week that it had forbidden its airlines to participate in an E.U. carbon tax program. Li Xinghao, a spokesman for the China Banking Regulatory Commission, said last month of Fatca that "unless the law is modified, the China Banking Regulatory Commission has no right to mandate Chinese banks to disclose account information of U.S. clients to the U.S. taxing authorities." The agreements with the European countries will not provide an exemption from Fatca for any jurisdiction, but if a country were to oblige all of its financial institutions to automatically hand over all account data related to Americans, then it could obtain blanket exemption for its banks to transfer funds between themselves without being subject to the so-called pass-through payment withholding requirement for transactions with noncompliant institutions. The pass-through payment measure has been one of the elements most hotly contested by the financial industry. The announcement Wednesday came as the I.R.S. proposed rules to implement the law in a 388-page document that addressed some of the criticisms. Douglas H. Shulman, the I.R.S. commissioner, acknowledged in a statement that compliance "creates a significant undertaking for financial institutions," and said the proposed regulations "reflect our commitment to take into account the implementation challenges of affected financial institutions while allowing for a smooth and timely rollout of the law." Denise Hintzke, head of the global tax compliance initiative at Deloitte in New York, said the rules included extending some compliance deadlines and allowing greater use of computerized searches of existing accounts for signs of American connections. Fatca has also been criticized by American expatriates because it imposes new reporting requirements. Some have said it makes Americans less attractive as clients for financial institutions, raising the cost of doing business overseas. Those criticisms were not addressed in the proposed rules. Brian Knowlton reported from Washington. Mia Li contributed from Beijing.