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FATCA aims to prevent tax evasion by U.S. persons through the use of offshore accounts by enforcing the reporting of such accounts to the IRS.

FFIs must report information about financial accounts held by U.S. taxpayers, or face a 30% withholding tax on payments from U.S. sources.

IGAs are bilateral agreements with other countries to facilitate the exchange of information and compliance with FATCA, making it easier to implement.

FFIs are required to undertake specific identification and due diligence procedures to identify U.S. account holders and report them to the IRS.

U.S. taxpayers with foreign financial assets exceeding certain thresholds must report these assets on Form 8938, submitted with their IRS tax returns.

Non-compliance with FATCA can result in various penalties for individuals and institutions, including fines, and withholding taxes.

NFFEs must also comply with FATCA by providing information on substantial U.S. owners or certifying there are none to avoid withholding taxes.

FATCA has different reporting thresholds for individuals living abroad and those in the U.S., and also varies based on filing status and residency.

U.S. persons living abroad may face difficulties in banking and investing due to FATCA, as some foreign banks may refuse American clients to avoid reporting burdens.

Certain pre-existing investments, loans, and other financial contracts are exempt from FATCA withholding under the grandfathered obligations provision.

FATCA's requirement for FFIs to report information on U.S. account holders raises privacy and data protection concerns in various jurisdictions.