Why is it so hard to enforce banks to report such transactions? Doesn't the US force foreign banks to report balances of US citizens residing overseas? Oh the double standards.
FATCA is an injustice of epic proportions. You can thank the US government of 2010 for that hypocrisy. It was used by the left as a way to “get” “fat cats” — it’s literally in the name: FATCA(ts.) Chuck Schumer was a highly vocal proponent. Instead it harms everyone overseas while for actual fat cats, it has been business mostly as usual.
I suspect you're being downvoted by US citizens who have never lived abroad and are blind to the difficulties FATCA causes for non-"Fat Cat" American expats.
It causes harm to American expats because FATCA's terms are horrible for banks. Basically, they have a whole host of new reporting obligations for their US citizen customers, wherever they are in the world. If their compliance fails, their US operations will be subject to a 30% withholding tax on all transactions. American citizens are the rare exception for banks outside the US and the compliance costs and huge operational risks make it very unattractive to accept US citizen clients. It is very difficult to find a bank willing to take them on as a customer, and those that do often put restrictions on their accounts.
Fat cat expats are relatively unaffected because they can afford to set up all kinds of complicated legal structures, companies, trusts, etc. to skirt the law and anyway have enough money that even with increased compliance costs they are still worth keeping as customers.
Finally, in general, US tax law regarding foreign earned income is completely absurd and nearly unique in the world, and direct compliance costs on expat Americans--for example, FBAR requirements--are equally absurd. I believe this is a result of the structural disenfranchisement of expats in the American political system. Expats vote where they last resided, so lots of places might have 0.5% expat voters, but no one place has 100% expat voters. So no politician has any incentive to represent expat interests.
One reason is that it causes the cost to be borne by those overseas bank, just to address the incompetencies of the US government and the bizarre law to tax its citizens living overseas, which I think only one or two countries do.
