In the first part of this post, we sketched the evolving compliance landscape for offshore accounts and income. With the Foreign Account Tax Compliance Act (FATCA) taking effect, U.S. account holders with foreign assets find themselves under more scrutiny than ever before.
Earlier this week, the IRS released a statement saying that its voluntary offshore disclosure programs are working. Programs such as the Report of Foreign Bank and Financial Accounts, (often referred to as FBAR) which requires a Form TD F 90-22.1; and the Foreign Account Tax Compliance Act (FATCA) on Form 8938 have helped the IRS recover more than $5 billion in penalties, interest and back taxes in the last couple years.
The restrictions on investment products available to Americans make it difficult to invest in markets outside of the U.S. So much so, that it's causing some Americans to renounce their citizenship. Nearly 2,000 gave up their U.S. passports in 2011, compared with only 235 just three years ago.