What US tax law compels expats to report offshore assets?

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The US Foreign Account Tax Compliance Act (Fatca) Compels Expats to Report Offshore Assets

The US Foreign Account Tax Compliance Act, commonly known as Fatca, mandates that banks in an increasing number of countries report to US authorities all accounts held by American citizens. Americans found to be not reporting their offshore accounts and failing to pay taxes on them face significant penalties, leading some to renounce their citizenship.
Fatca's Reporting Requirements for Financial Institutions

Beginning in January, Fatca requires financial institutions globally to identify and report to the US Internal Revenue Service (IRS) any accounts owned by US citizens. This legislation has prompted banks, including those in Switzerland, to comply with these reporting obligations. The law targets Americans holding assets abroad who may not have been fully compliant with US tax laws.
Penalties for Non-Compliance

Individuals discovered to be withholding information about their offshore accounts or neglecting to pay taxes on them are subject to stringent penalties. The United States uniquely taxes its citizens based on citizenship, irrespective of where they reside, unlike most nations which employ residence-based taxation. This distinction means that even Americans living and working outside the US must report their income to the IRS.
Impact on Americans Living Abroad

The implementation of Fatca has made it increasingly challenging for Americans to maintain their lives overseas. Some financial institutions have proactively stopped opening new accounts for US citizens to avoid the complexities and potential scrutiny associated with Fatca compliance. This has led to a rise in the number of Americans renouncing their citizenship, with a record 1,131 individuals doing so in the second quarter of a recent year.

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What US tax law compels expats to report offshore assets?

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