To address economic woes, Congress seems bursting with legislative proposals that may or may not ever become law, but the Foreign Account Tax Compliance Act of 2009 is one that’s sure to gain traction, according to tax experts.

The bill focuses on finding off-shore accounts that are sheltering income from U.S. tax, a measure already endorsed by President Barrack Obama, who has made clear his objectives to pursue tax revenue through international tax measures. It’s a heads up for individuals who may be hiding income in foreign accounts, but it’s also a potential compliance headache for U.S. entities with foreign operations that may get caught up in the reporting requirements.

“The major provisions are things that basically increase the amount of information reporting about payments to foreign financial institutions,” says Marc Gerson, attorney with the law firm Miller & Chevalier and former tax counsel to the House Ways & Means Committee. “This puts a reporting requirement primarily on non-U.S. financial institutions to be the information provider to the (Internal Revenue Service). If a financial institution doesn’t satisfy certain reporting requirements, a 30-percent withholding is supposed to apply.”

Gerson says the bill contains a number of “hypertechnical provisions,” but the core objective is to require non-U.S. financial institutions to provide information on accounts that are held by U.S. citizens. Kim Majure, another attorney with the same firm, says the bill takes an indirect approach by targeting foreign financial and non-financial lenders rather than taxpayers.

The proposal also repeals tax benefits related to foreign-marketed bearer bonds, says Majure, which would create a great deal of pressure on foreign lending. “If the result is significant capital flight, U.S. companies could get stuck with higher cost of any remaining capital,” she says.