On May 25, 2021, the IRS published an article reminding responsible officers (ROs) of offshore funds, foreign banks, and other participating or Model 2 reporting foreign financial institutions (FFI) that RO Certifications documenting their organizations’ compliance with the Foreign Account Tax Compliance Act (FATCA) for the period ending Dec. 31, 2020 are due on July 1, 2021. The certifications are generally due every three years and are only required for FFIs in jurisdictions (such as Switzerland or Bermuda) that have Model 2 intergovernmental agreements (IGAs) in effect and for FFIs in jurisdictions that have no IGA with the U.S. government for implementation of FATCA.
In general, ROs of FFIs in countries with Model 1 IGAs (such as Cayman Islands an United Kingdom) are not required to submit certifications, but should still review their FATCA message board and respond to the IRS’ request for confirmation that a certification is not required. Interestingly, despite ongoing challenges and business disruptions, the IRS has not granted any additional relief or extended the deadline for ROs of Model 2 Reporting FFIs to submit the required certifications. Therefore, we suggest that FFIs review their processes and controls for complying with FATCA’s due diligence, reporting and withholding requirements as soon as possible to avoid potential risk associated with noncompliance.
To learn more about RSMs Responsible officer certification services, please visit our FATCA landing page.