See FACTA. If an overseas bank (say in Australia) open an account for a US citizen, subject to US IRS taxes, then they have US regulations to comply with for no

See FACTA. If an overseas bank (say in Australia) open an account for a US citizen, subject to US IRS taxes, then they have US regulations to comply with for not just that account. FACTA requires an overseas bank to identify US account holders and then report their personal and other details to the IRS, including balances and withdrawals. So now some bank in a foreign country has to not only do due diligence on you and as soon as you say you are a US taxpayer or there are signs you are, it is required to report your account to the IRS, and if it doesn't it's subject to a 30% withholding tax on transfers to it as an institution from the US. Of course, under the rules, it's up to the bank to be careful, but the local tax authority doesn't care, so often there's a "Don't Ask, Don't Tell" sort of attitude.