The Foreign Account Tax Compliance Act (FATCA) faces sharp criticism and fear from financial institutions around the world. It was enacted in 2010 by Congress as a way to target non-compliance by U.S. taxpayers using foreign accounts. Under FATCA, foreign financial institutions (FFIs) will be required to report U.S. accountholders to the IRS. See our previous post for more reporting requirements.
On October 25, 2012, the IRS announced new timelines for complying with FATCA giving institutions:
- until Jan. 1, 2017 to start withholding taxes from U.S. taxpayers’ investment gains, and
- until Jan. 1, 2014, to put in place the reporting requirements mandated by FATCA.