Nearly four years after its passage, the Foreign Account Tax Compliance Act (FATCA) is nearly ready for implementation. The tax evasion legislation was passed as part of a 2010 stimulus package and was squarely aimed at U.S. citizens and corporations who hide money in overseas accounts. While the intent of the law may be to reduce evasion, the legislation could have some very troubling, unintended consequences for Americans abroad.

At its core, FATCA’s aim is to reduce tax evasion by requiring greater reporting on foreign-held assets. The United States is one of the few countries in the world that taxes its citizens regardless of where they live and work.

The new law requires American citizens to disclose foreign accounts with values greater than $50,000. However, the law also requires foreign financial institutions to report information on accounts owned by American citizens. That information includes the account owner’s name, address, and taxpayer identification number, as well as their account balance.

The new legislation will bring significant administrative expense to foreign financial institutions that work with American citizens. That’s caused some institutions to reject American clients and ask their current American clients to close their accounts. The new regulations are too much of a burden for some institutions to bear.

Another troublesome aspect of FATCA is the effect it could have on non-American spouses of American citizens. If the couple files a joint return, all of the couple’s assets may need to be disclosed. The non-American spouse could end up paying taxes in the United States even though he or she is not an American citizen.

FATCA also could cause administrative work for foreign or multinational corporations that employ American citizens. An American citizen’s name or signing ability on a corporate account could trigger a reporting requirement to the IRS. Foreign companies, especially, are hesitant to take on an IRS reporting obligation when they otherwise wouldn’t have one. Advocates for Americans abroad say the law is hurting American employment and opportunity in multinational companies.

Expats have responded in numerous ways. Perhaps the most drastic reaction is from those who have renounced their citizenship. According to a report from the IRS, nearly 3,000 citizens renounced their U.S. citizenship in 2013. That’s more than the previous two years combined. Before FATCA passed, there had never been more than 1,000 citizenship renunciations in a single year. Since the law’s passage, there were approximately 1,500 in 2010; 1,750 in 2011; 1,000 in 2012; and about 3,000 in 2013.

Of course, renouncing one’s citizenship comes with its own set of requirements, many of which are costly and complex. Many lawmakers and tax watchdog groups have proposed legislation that would base taxes on residency and not citizenship. But, those laws are fairly new. For many Americans abroad, there is little choice but to adapt to the new requirements and stay on the right side of the law.

However, deVere Group is now able to offer some bona fide, tax-efficient FATCA-compliant solutions for U.S. expats.  As such I would urge all Americans living and/or working overseas to fully explore all the available options with an independent, cross-border financial expert before taking the drastic and often distressing action of relinquishing their U.S. citizenship.