Congressional bill H.R. 2847 passed into law in March 2010 implementing incentives and tax breaks for businesses that hire unemployed workers. The controversial Foreign Account Tax Compliance Act (FATCA) section of the bill requires all American taxpayers, including those living outside the United States, to report certain foreign accounts and assets.Continue Reading
Also known as the Hiring Incentives to Restore Employment Act, H.R. 2847 also includes many provisions in an attempt to enforce the Foreign Account Tax Compliance Act section of the bill. Under the act, the Internal Revenue Service requires foreign financial institutions to report any information about relevant accounts and assets, and the IRS can charge a 30 percent withholding tax on foreign financial institutions that do not comply. People who need to file a U.S. tax return, even if living abroad, include American citizens and lawful American residents.
Some experts have criticized FATCA, claiming it is likely to prove harmful to American business interests and Americans living abroad. However, online myths that claim FACTA is going to cause the American dollar to collapse are false. Common criticisms of FACTA include the possibility that foreign banks may no longer accept American customers due to compliance costs, that it causes undue extra bureaucracy for Americans living abroad, and that American citizens living abroad may renounce their citizenship to avoid tax problems.Learn more about Branches of Government