It is also a nation of lawyers, many of whom are employed by the government. No surprise, then, that the Fatca legislation runs to several hundred pages. Here is the abridged version:

Foreign financial institutions will be required to scour their records for signs that customers are American, like a U.S. address or phone number or instructions to transfer funds to a U.S. bank account. For accounts worth more than $1 million, more rigorous search criteria will be required. Anyone flagged in the search will be asked to provide proof of citizenship and/or residence status, and Americans will have to provide a Social Security number.

The Social Security number of each American account holder, along with the account number, year-end balance and details on income paid into the account as interest or dividends and proceeds from security sales, must be turned over to the I.R.S. according to a timetable that places account holders with big balances at the front of the line: by the end of 2014 for those with $1 million bank balances and by the end of 2015 for accounts of $50,000 to $1 million.

There are deadlines and balance thresholds for other types of accounts, like with brokers, money managers and insurance companies, and for accounts held by entities like corporations and partnerships.

If you are wondering why a financial institution would agree to compile this information for an agency in another country, this is where another penalty comes in. Any payment from an American source to a foreign institution that is not complying with Fatca will be subject to 30 percent withholding, so any bank or other firm that has American customers or does American business may be affected.

Fatca does feature some benign elements, especially for financial small fry: Institutions will not have to report accounts worth less than $50,000, and individuals with less than that sum overseas will not have to file the 8938 form. But anyone with $10,000 abroad still must file a Report of Foreign Bank and Financial Accounts, known as an Fbar, each June 30.

Barbara Angus, a principal in Ernst & Young’s U.S. tax department who focuses on international tax, highlights another exception to Fatca that should give a break to many American expatriates: Payments related to retirement plans, either for workers accumulating assets or retirees receiving distributions, are exempt from the reporting requirements. Then there is the one-year enforcement delay, which will forestall headaches for taxpayers. For financial-service companies, however, it is a sign of the enormous task that they are being asked to undertake.

“There are a lot of questions on how each provision needs to be done,” Ms. Angus said. “It’s very important to have certainty before building changes into information-technology systems. A lot of input is needed from institutions to make those work as seamlessly as possible.”