Information Of Foreign Account Tax Compliance Act
The provisions commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010.
•FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts
•FATCA focuses on reporting:
•By U.S. taxpayers about certain foreign financial accounts and offshore assets
•By foreign financial institutions about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest
•The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting.
U.S. individual taxpayers must report information about certain foreign financial accounts and offshore assets on Form 8938 and attach it to their income tax return, if the total asset value exceeds the appropriate reporting threshold.
Form 8938 reporting is in addition to FBAR reporting.