re: 77,000 different foreign banks in 70 countries reporting to IRS now

Reporting requirements are primarily intended to make sure people report earnings from money in offshore accounts.

If it is in a US account, the US financial institution will report earnings and gains and losses both to the owner and irs on a 1099.

Foreign banks have never reported anything to the irs. It has always been the "honor system" for US persons to report earnings like interest and dividends and gains and losses from money they invest with foreign banks.

However, US people have been putting their money in foreign banks for decades and not reporting the earnings. Pissed off US financial institutions and the IRS.

Then in 2008 a UBS (swiss bank) got in trouble with the US department of justice for soliciting wealthy Americans to put their money in UBS instead of US accounts. To save his arse, he agreed to turn over the names of some wealthy Americans that he had helped. Turns out lots of swiss banks had complex setups where they came to the US, and solicited people. Sometimes they wouldfly the US people to Europe, meet them at airport, take their bags of cash and open accounts. They had all different methods.

So, the IRS and the department of justice teamed up to go after these banks. They had a good plan too that I won't go into in detail, but it worked. A lot better than anyone expected.

By 2010, congress saw the billions in taxes collected since 2008 due to what the irs did. So congress passed a law called Fatca.

Fatca is now making it about impossible to move money offshore and not have it reported by the foreign banks which are all pretty much falling in line and cooperating. Especially after several of the swiss banks have paid billions to the US in fines already.