FATCA was signed into law on March 19, 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act. Starting next month, participating foreign financial institutions (FFIs) are required to annually provide the Internal Revenue Service with names, addresses and account details of all American accountholders with assets over $50,000. This includes U.S. citizens, those with dual citizenships and those holding American green cards. If such persons conduct any sort of financial activity in a foreign country—from banking to investing to buying insurance—they must be identified. Otherwise, the U.S. will impose a whopping 30 percent withholding tax on all U.S. securities transactions.
That FATCA was enacted as part of HIRE is misleading. Whose “employment” is being “restored” under this law—other than that of a handful of tax lawyers, accountants and bureaucrats? When you conduct a Google search of “FATCA,” the top hits that appear are sponsored ads for such professionals who promise to help you make sense of all the red tape.
If anything, FATCA endangers employment and stifles global opportunity. Americans will be disinclined to seek overseas business to avoid the headache of complying with FATCA and humiliation of being denied the presumption of innocence.
Editor’s Note: To understand the shocking real reason for FATCA see this article here.