The Foreign Account Tax Compliance Act (FATCA) is another way that the Internal Revenue Service and U.S. Department of Treasury will be able to identify your income and assets outside of the United States.
Under FATCA, U.S. taxpayers with foreign assets that exceed certain thresholds must report those assets to the IRS. This report is part of your tax yearly federal income tax return. Failure to file this form when required is a tax crime.
Further, FATCA requires foreign financial institutions to report directly to the IRS information about financial accounts held by U.S. taxpayers, or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest.
To learn more please see our full FATCA article.