FATCA (Foreign Account Tax Compliance Act)

FATCA was enacted in 2010 (as part of the HIRE Act) and sits in chapter 4 of the Code, §§1471–1474. It has two limbs that are easy to confuse. The institutional limb pressures foreign financial institutions to identify and report their US account holders, backed by a 30% withholding tax on withholdable US-source payments to institutions that do not comply; most countries implement this through a Model 1 or Model 2 intergovernmental agreement rather than contracting with the IRS directly. The individual limb is §6038D, which requires US persons to report specified foreign financial assets on Form 8938 with their return. FATCA is why a foreign bank asks a US-born customer for a Form W-9 or a certificate of loss of nationality. It does not replace FBAR, which is filed separately with FinCEN under Title 31.