It stands for “Foreign Account Tax Compliance Act,” – a new tax law on the books since March of last year. It was enacted as a means of curbing foreign non-compliance through offshore accounts. Today’s notice sets out a timeline for the steps that foreign financial institutions (FFIs) and the US government will need to take; steps related to withholding, documentation, and reporting. Some requirements will not take effect until 2013 or 2014. The FATCA requirements will be phased in as follows:

An FFI must enter an agreement with the IRS by June 30, 2013, to ensure that it will be identified as a participating FFI in sufficient time to allow withholding agents to refrain from withholding beginning on January 1, 2014.

Withholding on U.S. source dividends and interest paid to non-participating FFIs will begin on Jan. 1, 2014, and withholding on all withholdable payments (including on gross proceeds) will be fully phased in on Jan. 1, 2015.

Due diligence requirements for identifying new and pre-existing U.S. accounts (including certain high-risk accounts) will begin in 2013. Reporting requirements will begin in 2014.

For purposes of the Notice, high risk accounts include private banking accounts with a balance that is equal to or greater than $500,000.

See Notice 2011-53 for more information.