Owning a portfolio of offshore assets can be a headache thanks to the Foreign Account Tax Compliance Act (FATCA). FATCA requires both U.S. citizens and foreigners living in the U.S. to make extensive disclosures about overseas holdings on their tax returns or face stiff penalties. Foreign financial institutions also must report more detailed information on income earned by their U.S. account holders, or face possible U.S. tax penalties.

FATCA is the culmination of a three-year campaign by Washington to combat offshore tax evasion. It has its genesis in a 2009 settlement with UBS AG where the Swiss bank agreed to turn over to the U.S. the names of more than 4,000 U.S. taxpayers with hidden offshore accounts. Read More