A new law called the Foreign Account Tax Compliance Act set to go into effect in June 2014 has been drawing a lot of criticism and creating confusion as of late as banks in other countries rush to figure out how to comply with newly rigorous reporting standards set by the United States. The law may become the model for global banking, particularly when it comes to the unified software system that will enable the increased reporting. 

This new law will be highly relevant to U.S. citizens with a home abroad or family in another country, since the stricter reporting standards may expose holdings that citizens were unaware they needed to disclose to the I.R.S. The law will apply to any citizen that holds at least $50,000 in an account in another country. 

Noncompliance by global banks could mean a ban on doing business with American citizens, which would be a big loss to many financial institutions. 

The change could also impact citizens who have overseas holdings that are discovered by the I.R.S. after the law goes into effect. Misreported income or property interests could result in fines and late fees along with other possible penalties. In some extreme cases where the unpaid taxes seem to go beyond a simple mistake, the I.R.S. may allege that someone has purposefully evaded taxes. Tax evasion charges can lead to time in prison in some circumstances. 

Critics of the new reporting law say that the United States is overreaching its authority and creating an arduous system for international banks. 

Source: New York Times, "Complying with U.S. Tax Evasion Law is Vexing Foreign Banks," Lynnley Browning, Sept. 16, 2013.