From Tax Analysts today [gated], a reader writes in with a 2-paragraph "summary" of the FATCA regs. Excerpt:
In our attempt to ferret out U.S. tax dodgers with foreign accounts, we are using the only leverage we have ... 30 percent withholding on all U.S.-source payments to foreign companies unless they fess up and disclose all of their U.S. beneficiaries. Further, we are going to coerce foreign countries [into] ... facilitating this disclosure by threatening to impose our Byzantine regulations on their local financial institutions if they don't.
We realize that the net result will be that tax dodgers with foreign accounts will simply move their accounts to banks in countries that don't enter into Disclosure Treaties and that don't have U.S.-source income, so the net result will be to impose our massively complex regulations only on legitimate U.S. and foreign taxpayers. We recognize that this result will drastically reduce foreign investment in the United States in a time when it is desperately needed and will add untold complexity to a world of increasing globalization, but we had to do something in response to news articles on some unreported foreign accounts.Really, more in the way of observation than interpretation, but in any event it's a finger on a certain pulse.