Expat Americans and the IRS
What is FATCA?
Expat U.S. taxpayers with foreign financial assets with an aggregate value of more than the reporting threshold ($50,000) must report information about their assets on Form 8938 and this must be attached to the taxpayer's annual income tax return submitted to the IRS.
Link: FORM 8938 at IRS.GOV
Official information on FATCA:
Summary of FATCA Reporting for U.S. Taxpayers - link: https://www.irs.gov/businesses/corporations/summary-of-fatca-reporting-for-us-taxpayers
Media Sources (in English)
The 'Foreign Account Tax Compliance Act" (FATCA) is legislation from 2010 that is increasing the reporting responsibilities on Americans abroad (whether they owe any taxes or not), and is forcing some to renounce their United States citizenship. The law is also creating reporting headaches for financial institutions around the world that have anything to do with Americans (in fact, many institutions are therefore refusing to work with Americans at all). The difficulties involved in the legislation has prompted the US Treasury to extend reporting deadlines another 6 months as the complaints pile up.
Wall Street Journal has an article covering the problems:
"The legislation is Fatca, the Foreign Account Tax Compliance Act. To appreciate its breathtaking scope along with America's unique "citizen-based" tax practices, imagine this: You were born in California, moved to New York for education or work, fell in love, married and had children. Even though you have faithfully paid taxes in New York and haven't lived in California for 25 years, suppose California law required that you also file your taxes there because you were born there. Though you may never have held a bank account in California, you must report all of your financial holdings to the State of California. Are you a signatory on your spouse's account? Then you must declare his bank accounts too. Your children, now adults, have never been west of the Mississippi but they too must file their taxes in both California and New York and report any bank accounts they or their spouses may have because they are considered Californians by virtue of one parent's birthplace.
Extrapolate that example to the six million U.S. citizens living around the globe. Many, if not most, don't know about these requirements. Yet they face fines, penalties and interest for not complying—even if they owe no U.S. taxes, own no U.S. property, have no U.S. bank account and haven't lived there in years—if ever."
The Association of Americans Resident Overseas has compiled a list of unfair practices that U. S Citizens face when living overseas from dealing with their tax burdens to the the United States Government.
"Americans living abroad must pay taxes twice: once to the country in which they reside and work and again to the U.S. on all their foreign income. The U.S. is the ONLY developed country that taxes its citizens living overseas on foreign-earned income. This has made it too expensive for U.S. companies to send their employees abroad to grow their business."