FATCA

Foreign Account Tax Compliance Act

Acronyms (colloquial)	FATCA
Enacted by	the 111th United States Congress
Effective	March 18, 2010 (26 USC § 6038D); December 31, 2012 (26 USC §§ 1471-1474)
Citations
Public law	111-147
Statutes at Large	124 Stat. 71, 97-117
Codification
Titles amended	26
U.S.C. sections created	26 U.S.C. §§ 1471–1474, § 6038D
U.S.C. sections amended	26 U.S.C. § 163, § 643, § 679, § 871, § 1291, § 1298, § 4701, § 6011, § 6501, § 6662, § 6677
Legislative history
Introduced in the House and Senate as Foreign Account Tax Compliance Act of 2009 (S. 1934, H.R. 3933) by Max Baucus (D–Montana); Charles Rangel (D–NY-13) on October 27, 2009 Committee consideration by Senate Finance, House Ways and Means Passed the Senate on February 24, 2010 (70-28) Passed the House as the Hiring Incentives to Restore Employment Act, Title V, Subtitle A on March 4, 2010 (217–201) with amendment Senate agreed to House amendment on March 17, 2010 (68–29) Signed into law by President Barack Obama on March 18, 2010

The Foreign Account Tax Compliance Act (FATCA) is a 2010 United States federal law to enforce the requirement for United States persons including those living outside the U.S. to file yearly reports on their non-U.S. financial accounts to the Financial Crimes Enforcement Network (FINCEN). It requires all non-U.S. (foreign) financial institutions (FFIs) to search their records for indicia indicating U.S. person-status and to report the assets and identities of such persons to the U.S. Department of the Treasury. The FATCA was the revenue-raising portion of the 2010 domestic jobs stimulus bill, the Hiring Incentives to Restore Employment (HIRE) Act, and was enacted as Subtitle A (sections 501 through 541) of Title V of that law.

FATCA was reportedly enacted for the purpose of detecting the non-U.S. financial accounts of U.S. domestic taxpayers rather than to identify non-resident U.S. citizens and enforce collections. There might be thousands of resident U.S. citizens with non-U.S. assets, such as astute investors, dual citizens, or legal immigrants. FATCA was enacted with the purpose of having non-U.S. financial institutions identify approximately 9 million U.S. citizens believed to reside outside of the United States and those persons believed to be U.S. persons for tax purposes. FATCA will also be used to help identify non-U.S. person family members and business partners who share accounts with U.S. persons. Another benefit of FATCA is that U.S.-person signatories of accounts will be identified. This feature allows the reporting of the assets of non-U.S. corporations, volunteer organizations, and any other non-U.S. entity where a U.S.-person can be identified.

FATCA is used to locate U.S. citizens (usually non-U.S. residents but also U.S. residents) and "U.S. persons for tax purposes" and to collect and store information including total asset value and social security number. The law is used to detect assets, rather than income. The law does not include a provision imposing any tax. In the law, financial institutions would report the information they gather to the U.S. Internal Revenue Service (IRS). As implemented by the intergovernmental agreements (IGAs) (discussed below) with many countries, each financial institution will send the U.S.-person's data to the local government first. For example, according to Ukraine's IGA, the U.S.-person data will be sent to U.S. via the Ukrainian government. Alternatively, in a non-IGA country, such as North Korea, only the North Korean bank will store the U.S.-person data and will send it directly to the IRS.

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Wikipedia