FATCA stands for the Foreign Account Tax Compliance Act. It is a piece of legislation to help counter tax evasion in the US. Introduced by the United States Department of Treasury (Treasury) and the US Internal Revenue Service (IRS), the purpose of FATCA is to encourage better tax compliance by preventing US persons from using banks and other financial organizations to avoid US taxation on their income and assets. A significant number of countries and territories worldwide are expected to sign (IGAs) relating to FATCA compliance with the United States government. These IGAs will result in the FATCA legislation becoming part of their local laws.
