The Internal Revenue Service has introduced an online tool that will allow users to check on whether a foreign financial institution has registered for the Foreign Account Tax Compliance Act, or FATCA.
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FATCA was included as part of the HIRE Act of 2010 and requires foreign financial institutions to provide information on their U.S. account holders to the Internal Revenue Service or else face stiff penalties. The law has attracted controversy abroad amid concerns that it violates other countries’ banking secrecy laws. However, after delays, some changes in regulations by the IRS and the Treasury Department, and a series of intergovernmental agreements between the Treasury and tax authorities in other nations, the requirements are beginning to take effect this year.
Among them is one requiring foreign banks, hedge funds and other financial institutions to register and receive Global Intermediary Identification Numbers (see