Government officials have written to the US Internal Revenue Service for an exemption for KiwiSaver funds from its global dragnet for tax cheats.
They say local superannuation funds are unlikely to be a haven for Americans seeking to avoid tax.
The Foreign Account Tax Compliant Act (FACTA) requires foreign financial institutions to hand over information about American citizens to that country's tax authorities.
David Brown Douglas from the Trustees Corporation Association says complying with FACTA could cost local financial institutions tens of millions of dollars.
Submissions from a number of local financial institutions to the US tax authorities at the end of April argue disclosure of individuals' account information without prior permission would breach New Zealand's privacy laws.
A letter from New Zealand ambassador to Washington Mike Moore to the Commissioner of the US Internal Revenue Service says limited access to KiwiSaver money before retirement age means the funds are an unlikely haven for American tax dodgers.
The letter says this should be reflected in the FACTA legislation and an exemption be given to local super funds.
