The US Hire Act pack a huge punch!

Signed into law on March 18, 2010 the HIRE ACT, which is due to take effect January 1, 2013, Americans living abroad will face more financial scrutiny than ever before.

One subsection of the act includes provisions that require foreign financial institutions, investment funds, trusts, family offices and other types of investment vehicles to report information about its US account holders every single year. If the institution fails to do so, a 30% withholding tax will apply to all US investments, including any payments received from a US payor. This 30% will be remitted to the IRS as a tax and will apply to any financial institution that does not sign an international tax agreement with the US.

In addition to the reporting requirements for financial institutions, individuals with more than $50,000 in foreign assets are required to report this information on their form 1040.