FATCA (Foreign Account Tax Compliance Act)

FATCA is a US federal law enacted in 2010 that requires US persons, including citizens and green card holders, to report foreign financial accounts and assets to the Internal Revenue Service. Foreign financial institutions are also required to identify and report accounts held by US persons or face a 30% withholding tax on certain US-sourced payments. FATCA has led many foreign banks to refuse accounts to US persons due to the compliance burden. It operates alongside FBAR reporting obligations and together they form the cornerstone of US international tax compliance.