Those rules – part of Fatca (the Foreign Account Tax Compliance Act) - compel foreign banks and other financial institutions to provide information to the Internal Revenue Service about Americans holding accounts. It is worded to catch as many non-compliant U.S. taxpayers as possible - those who might be stashing away money in foreign bank accounts.
But Americans complain that it is overcomplicating their tax returns, jeopardizing their jobs and, in some cases, making it impossible to obtain a simple bank account.
"U.S. citizens abroad are being treated more like criminals than ambassadors. And now thousands of Americans are forced to give up their passports with no or little tax return benefit to the U.S. Treasury," says Elaine Knuth, an American author who has lived abroad for more than 20 years, most recently in Qatar.