FATCA

The Foreign Account Tax Compliance Act requires foreign financial institutions (FFIs) worldwide to report accounts held by US persons (citizens, permanent residents, and certain visa holders) to the IRS. Enacted in 2010, FATCA imposes a 30% withholding tax on US-source payments to non-compliant institutions. Over 110 countries and 300,000+ FFIs participate. For US persons living abroad, FATCA means their foreign banks report account balances and income to the IRS annually. Non-compliance can result in penalties of $10,000-$50,000 per unreported account. FATCA works alongside FBAR reporting requirements.