“In 2010, Congress passed House Resolution (H.R.) 2847, the Hiring Incentives to Restore Employment Act, or HIRE Act.
This legislation included a number of tax breaks meant to encourage businesses to put people on the payroll.
This law also called for greater scrutiny of foreign accounts that U.S. citizens hold in an effort to improve tax compliance, thereby bringing in more tax revenue and helping to offset the tax breaks of the HIRE Act. This portion of the law is called the Foreign Account Tax Compliance Act, or FATCA.
So far, so good. The tax breaks went into effect quickly. Were more people hired because of them? Who knows?
The greater scrutiny of foreign accounts took more time to implement, and actually has yet to go into effect. It is slated to begin on July 1.
The reason for the long lead time was the complexity of the process…
The U.S. has essentially mandated that every foreign financial firm report back to the IRS on accounts that U.S. citizens hold. The scope of this can’t be overstated.
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