United States

IRS provides significant relief under FATCA

TAX BLOG  | 

Earlier this year, the Treasury Department issued a notice announcing its plan to amend select regulations under the Foreign Account Tax Compliance Act (FATCA). The notice contains four main elements:

  • First, it delays the date by which preexisting account certifications must be reported to the IRS by certain foreign financial institutions (FFIs); the certifications of participating FFIs and Model 2 FFIs are now due July 1, 2018
  • Second, the notice specifies the certification period and due date applicable to registered deemed-compliant FFIs
  • Third, it eliminates the requirement for certain FFIs to report to the IRS gross proceeds paid to accounts held by nonparticipating foreign financial institutions (NFFIs) in the 2015 calendar year
  • Fourth, the notice states the conditions under which a withholding agent may rely on electronically furnished Forms W-8 and W-9 collected by intermediaries and flow-through entities

A withholding agent may rely on these electronically furnished forms to the extent the intermediary or flow-through is a direct or indirect account holder of the withholding agent and the withholding agent obtains a written statement confirming the accuracy of the form’s contents. Taxpayers may rely on the guidance provided in this notice until regulations are issued.

Taxpayers subject to FATCA reporting requirements should carefully consider these changes with their tax advisor in order to understand how the notice may affect their reporting obligations.


Ramon Camacho

Principal

Ramon advises businesses on international tax and capital markets issues, including withholding tax, inbound and outbound investment, and Treasury matters. Contact him at ramon.camacho@rsmus.com.

Areas of focus: International Tax PlanningWashington National Tax