Fatca calls for foreign financial institutions to file an annual report to the I.R.S., either directly or through its own national tax authority, on each U.S. taxpayer for whom it holds more than $50,000 in assets at the end of the year.
This is why a friend in Singapore gave up his US citizenship. He couldn’t get any financial institution to do business with him. It’s also why some Swiss banks have dumped US clients.
The law also requires account holders to file an I.R.S. form themselves, 8938, detailing their foreign holdings, though American expatriates need file only if their financial assets exceed $200,000 at year’s end. To make sure account holders stay in touch, the agency levies a $10,000 penalty for failure to file a required 8938, and any underreported income will be subject to an additional 40 percent penalty. (Read more)
$200k — I aspire to have these problems. :)