Who will really be snared by FATCA?

The Internal Revenue Service (IRS) is casting a wide net overseas to find US taxpayers who have been hiding money in foreign banks to avoid paying US taxes. It may ultimately succeed in smoking out tax evaders, but the backlash that has already begun could dwarf whatever benefits the IRS hoped to generate. The Foreign Account Tax Compliance Act (FATCA), which is being phased in up to 2015, requires foreign financial institutions (FFIs) to report US account holders to the IRS or face a 30% withholding tax on income the banks earn from US investments. FATCA also applies to foreign en...