The Foreign Account Tax Compliance Act (“FATCA”) is found in Sections 1471–1474 of the Internal Revenue Code. The Act requires U.S. persons to report specified foreign financial assets to the IRS on Form 8938 with their U.S. tax return. The purpose of FACTA is to combat the perceived tax evasion of certain U.S. persons through offshore (i.e., non-U.S.) accounts and investments. The rules require U.S. persons to disclose foreign financial accounts and foreign assets.
The IRS enforcement of the Act is particularly aggressive and the scope is enormous casting a wide global net: the IRS has engaged with more than 110 countries who have entered into FATCA Agreements. Further, with 300,000 Foreign Financial Institutions (FFIs) on board, FATCA reporting will remain a permanent feature of the tax compliance landscape and a harsh reality for millions of U.S. taxpayers.
Instructional MethodGroup: Internet-based
NASBA Field of Study
Taxes (1 hour)