The Foreign Account Tax Compliance Act, more commonly known as FATCA by compliance officers, requires foreign financial institutions to report foreign assets held by their American bank clients. Violations, on the part of the banks, can be costly and painful, and reputation damage, from the adverse publicity, could be severe, as clients may flee the bank as the result of newspaper coverage. The bank could also be targeted by US law enforcement agencies for possible money laundering or terrorist financing.
US taxpayers must report to the Internal Revenue Service, on a form they attach to their tax return, all foreign financial assets that exceed USD$50,000. It was this failure that tripped up Trump Campaign Chairman Paul Manafort; apparently he chose to secrete millions of dollars in banks in Cyprus, among others. When the banks reported his account information, it conflicted with Manafort's reporting to the IRS.
Will Donald Trump's tax returns, when they are ultimately disclosed to the House Ways & Means Committee, show he failed to report bank accounts overseas, as required by FATCA ? What do you think ? His attorneys, this week are seeking to block the Commissioner of the IRS from releasing the tax returns. Obviously, there are reasons for Trump to seek to hide his tax returns, and FATCA is one of them.