A group known as the Alliance for the Defense of Canadian Sovereignty has filed suit against the Canadian government challenging the constitutionality of an intergovernmental agreement between the U.S. and Canada to implement the Foreign Account Tax Compliance Act.

FATCA was included as part of the HIRE Act, which was passed by the U.S. Congress in 2010. The controversial law requires foreign financial institutions to report on the holdings of U.S. citizens to the Internal Revenue Service or else face withholding penalties of up to 30 percent on their income from U.S. sources.

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