The area of taxation for both UK and US purposes is constantly changing. Changes in government leads to policy changes on an ongoing basis. From time to time updates will be posted here on items that may affect your personal situation.
This is the Foreign Account Tax Compliance Act - FATCA for short. It came into force in 2010 and over the intervening years has gained weight as particular elements of it have been activated and enforceable. The main focus of the act is in relation to reporting requirements placed on Foreign (non US) institutions to report to the IRS details of any US citizen account holders.
The effects of the act are significant in that it has greatly increased the information gathering powers of the IRS. The primary focus of the act is to ensure that US citizens are fully compliant with foreign account reporting on their individual tax returns. This includes all US citizens living in the US who might have foreign accounts but also by default all US citizens living outside the US who by nature of their residence outside the US will almost certainly have foreign accounts. The increased information gathering capabilities brought in by the act mean that anyone with a foreign account will be reported in someway back to the IRS. If your US tax filings are not up to date and/or those reportings don't fully report your foreign account information you are at more risk than ever of discovery by the IRS. An IRS discovery would typically lead to enforced compliance and more severe penalties for tax lost and in some cases statutory penalties based on non compliance only (i.e. not tax based penalties but a penalty based on non compliance only - these can be significant).
The IRS have been running delinquent filer programs for a number of years and the current regime is one of the most favourable in terms of penalty provision (largely there are no penalties that will apply). As such now is as good a time as any to become compliant if you can - it's always better to come forward and file taxes under one of these delinquent programs rather than wait until the IRS contact you when their terms will be far less favourable. We can assist in all aspects of delinquent filing programs and typically you'll only be required to file 3 years of returns regardless of the total length of time you've been non compliant.
One of the most common cases where this comes up is from what is often termed 'Accidental Americans' - such individuals have US citizenship normally from birth but may never have lived in the US and simply don't realise the ongoing US filing requirement. In these cases - if you wish to retain your US citizenship or even if you want to give it up completely it is a requirement to become compliant.