Overview of FATCA
In 2010, the U.S. government enacted the Hiring Incentives
to Restore Employment Act (the "Act"). The
Act's principal purpose is to provide U.S. employers
with the necessary incentives to hire and retain new employees.
With exemptions and tax credits offered by the Act, the
U.S. Government has chosen to offset its costs by incorporating the
provisions of the Foreign Tax Account Compliance Act of
2009 ("FATCA"). FATCA implements
measures which challenge the concept of offshore financial privacy,
by measures such as increased reporting requirements and taxation
of foreign institutions. By FATCA, the Internal Revenue
Service (the "IRS") may impose additional
reporting requirements for U.S. persons who hold offshore financial
accounts or enjoy offshore financial services. These reporting
requirements are in addition to the current foreign banking
reporting requirements and require disclosure of a broader class of
foreign assets.
