FATCA GATCA Implementation

About FATCA GATCA Implementation

FATCA went into effect in 2014 after a four year implementation period. Foreign banks invested billions in compliance systems. Many smaller banks and financial institutions in developing countries struggled with the compliance burden. Some foreign banks refused to serve US clients rather than comply. The US Treasury negotiated intergovernmental agreements with over 110 countries to facilitate compliance. Model 1 IGAs require foreign governments to collect information from banks and send it to the IRS. Model 2 IGAs require foreign banks to report directly to the IRS. FATCA has been credited with significantly increasing disclosure of offshore accounts. However, it has also been criticized for its cost, complexity, and impact on Americans living abroad.