The feared US Foreign Account Tax Compliance Act (FATCA) is slowly cranking up to full throttle as tax authorities around the world have started swapping financial data.
FATCA requires foreign financial institutions must tell the IRS about any accounts or investments controlled by US taxpayers.
For US residents, the threshold is accounts or assets worth more than $50,000, while for expats, the limit is $200,000.
In return for the data passing through tax authorities and onwards to the IRS, the US is sending back reciprocal information about taxpayers of other nations who have bank accounts or investments in the USA.
FATCA has provoked worldwide protests.
Lawsuits and protests
Taxpayers have complained the law breaches their privacy, while financial institutions have spent billions on implementing software systems to identify US taxpayers.
In some cases, banks have closed the accounts of US taxpayers to avoid complying with the law and US taxpayers have handed back their passports.
FATCA was introduced in 2010, but did not start to come into force until July 2015 due to a rough ride through Congress and a series of failed legal challenges both in the US and outside.
The last was settled in Canada only a few days ago.
The aim of the legislation is to help the IRS find undeclared income and assets of US taxpayers that is hidden offshore.
The government expects to raise around $10 billion of tax from FATCA.
Foreign financial institutions that fail to pass the data to their national tax authority can register direct with the IRS.
Those that fail to supply the required information face severe penalties from the US government.
These penalties include a 30% withholding tax on any financial transaction the institution makes in the US or even barring from the US banking system.
Taxpayers do not have to take any action under FATCA as they should already report their offshore income and investments on their annual tax filing.
From 2015-16, these personal tax filings will be checked against FATCA data and the IRS will investigate any anomalies.
With the onset of FATCA, more than 50,000 US taxpayers have taken advantage of voluntary disclosure opportunities that come with reduced penalties.