Foreign Account Tax Compliance Act
The Foreign Account Tax Compliance Act is an effort by the U.S. government to ensure U.S. taxpayers are declaring all of their worldwide income. Unlike most nations, U.S. taxes are based on citizenship and U.S. tax residency (green card holders), even if a person is living outside the U.S. Form 8938 was created through FATCA and requires reporting of all non-U.S. accounts and assets. This list is all encompassing and includes foreign bank, deposit, investment, retirement accounts, interests in foreign entities, and so on. The FATCA reporting form also requires foreign financial institutions to report their U.S. account holders’ information to the U.S. government.