An Overview of the Foreign Account Tax Compliance Act

On March 18, 2010, President Obama signed into law H.R. 2847, the Hiring Incentive to Restore Employment ("HIRE") Act.  The HIRE Act introduced several new reporting provisions related to certain foreign entities and interests held by U.S. persons in foreign assets.  These provisions were originally introduced in Congress on October 27, 2009 by Senator Baucus as the "Foreign Account Tax Compliance Act of 2009" ("FATCA" or "Act"). FATCA was intended to give the IRS "powerful tools" to combat the problem of offshore tax evasion.  In the words of Senator Baucus, the new provisions would ensure that "the days of sending your money offshore to avoid paying U.S. taxes are over."