Which law was enacted in the United States in 2010 to combat tax evasion?

• A. IRS Compliance Act
• B. FATCA
• C. Taxpayer Relief Act
• D. Wealth Management Regulation

Answer: (B)

The choice of FATCA, which stands for the Foreign Account Tax Compliance Act, is correct because this legislation was specifically enacted to combat tax evasion by U.S. taxpayers holding accounts and other financial assets abroad. Introduced as part of the Hiring Incentives to Restore Employment (HIRE) Act in 2010, FATCA requires foreign financial institutions to report information about financial accounts held by U.S. taxpayers to the IRS. This law aims to reduce the use of offshore accounts for tax evasion and ensure that U.S. persons are compliant with their tax obligations on foreign income.

FATCA's implementation has led to increased transparency and cooperation between foreign financial institutions and the IRS, effectively allowing the United States to track and tax income generated by U.S. citizens outside the country. The rigorous reporting requirements put pressure on foreign banks to comply, thus discouraging tax evasion strategies involving offshore accounts.

The other options do not align with the specific aim of combating tax evasion as directly as FATCA does. The IRS Compliance Act and the Wealth Management Regulation do not exist as formally recognized pieces of legislation, while the Taxpayer Relief Act focuses more on providing tax benefits rather than enforcing tax compliance.