Paying taxes are part of everyday life, but a U-S law called the Foreign Account Tax Compliance Act, or FATCA, is clamping down on tax evaders. The statute was passed in 2010. One new requirement is the reporting of foreign assets on a new form if you have more than 50-thousand dollars of foreign assets.
U-S taxpayers were already required to report their foreign assets to the Internal Revenue Service.But now FATCA is holding financial institutions accountable for providing information about their American clients. FATCA will likely help the U-S Treasury collect another 800 million dollars in taxes per year. But reports put the cost of implementing the law between hundreds of millions and over 10 billion dollars for those foreign institutions.
It’s not just US citizens impacted, Green card holders, students, people working overseas and certain investors will have all need to declare their assets. Attorney Scott Michel of Caplin and Drysdale explains what could happen to those who don’t comply.