Fatca: The Menace You’ll Hear About in 2012

This week both the New York Times and the Wall Street Journal had reports on the hubbub being created worldwide by a new U.S. law that is virtually unnoticed within our borders. It is the Foreign Account Tax Compliance Act of 2010, or Fatca.

The problem originates in U.S. government efforts to prevent future offshore-banking tax scams like the UBS one in 2009. To keep better track of the flow of assets owned by U.S. citizens, Fatca requires bankers in other countries to send the IRS information about transactions by any of their customers who are Americans. Similarly, U.S. banks have to report to the IRS info on their non-U.S.-citizen customers, so the IRS can send it on to their home countries.

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