Ersnt & Young LLP has published a useful document outlining the effects of the Foreign Account Tax Compliance Act (FATCA), which became law as part of the Hiring Incentives to Restore Employment (HIRE) Act on 18 March 2010 (P.L. 111-147). FACTA imposes new withholding and information reporting rules intended tohelp ensure that US citizens with financial assets outside the US are paying US tax. Although FATCA requirements do not take effect until January 1, 2013, funds and their service providers are preparing to work the new regime into their current systems.
The E&Y document gives a general background of the legislation, as well as some highlights of ways in which the law may affect private and other funds. Though fund directors need not trouble themselves with the details of the legislation or the transactions it governs, this document provides an excellent precis.
The full text of the document is available at: https://eyaprimo.ey.com/natlmktgaprimoey/Attachments/FATCA_CK0452.pdf