Foreign Account Tax Compliance Act
Foreign Account Tax Compliance Act, aka FATCA, is a long phrase that means the government wants to make sure that everyone who has money in a bank account outside of the United States tells them about it. This is because some people use foreign bank accounts to hide money and avoid paying taxes.
To make sure that people are reporting all of their income, the government requires foreign banks to ask their customers if they are U.S. citizens, and if so, report information about their accounts to the government.
This helps the government keep track of people who might not be paying all the taxes they owe, and also makes sure that people who have earned money in other countries are reporting it correctly.
It's kind of like when your mom asks you if you ate all your vegetables - she just wants to make sure you're doing what you're supposed to do.
To make sure that people are reporting all of their income, the government requires foreign banks to ask their customers if they are U.S. citizens, and if so, report information about their accounts to the government.
This helps the government keep track of people who might not be paying all the taxes they owe, and also makes sure that people who have earned money in other countries are reporting it correctly.
It's kind of like when your mom asks you if you ate all your vegetables - she just wants to make sure you're doing what you're supposed to do.