The Treasury Department said Wednesday the U.S. has signed intergovernmental agreements with both Canada and Hungary to implement the Foreign Account Tax Compliance Act, or FATCA, in an effort to discourage offshore tax evasion.
FATCA was included as part of the HIRE Act of 2010 and requires foreign financial institutions to report on the holdings of U.S. citizens or else face stiff penalties. The law has provoked controversy abroad with foreign governments and banks, as well as U.S.-born expatriates and dual citizens, who have been finding it difficult to open accounts and do business at many banks. The Republican National Committee recently voted to call for the repeal of FATCA and plans to make it a campaign issue this year (see RNC to Vote on Resolution to Repeal FATCA).
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