<![CDATA[MBAF - International Tax]]> <![CDATA[International Tax Advisory - IRS Allows Gain Recognition Agreements (GRA) on Cross-Border Stock Transfers]]>
Alfredo J. De Zayas
Boris Rosen

The IRS has begun to permit U.S.persons to enter into Gain Recognition Agreements (GRA) on cross-border stock transfers of commonly owned corporations. In a GRA, the transferor can eliminate the requirement for it to pay U.S. taxes on its built-up gains from the stock.

The IRS announced that change in Notice 20121-15. It is effective for eligible transactions occurring on or after February 10, 2012.

Prior to that Notice there was a requirement under Section 367 of the U.S. tax code for U.S. persons to recognize the entire built-in gain of a cross-border transferred stock, not just the dividend portion, under certain circumstances. Moreover, under regulations the IRS issued in 2009, the U.S. person could not file a GRA to defer gain recognition.

The recent change could prove beneficial to some U.S. corporations in their stock transfers with foreign subsidiaries since they (U.S. corporations) may be eligible for a GRA.

In a GRA, the transferor is not required to pay U.S. taxes on gains from the transfer of stock unless the transferee disposes of the stock within five years or unless certain other events occur.

In the Notice, the IRS said it is amending Section 367 to provide uniformity to cross-border stock transfers by U.S. persons (independent of the amount of income taken under Section 304) and substantially reduce the complexity and uncertainty of filing a GRA.

The purpose of Section 304 is to prevent the bailout of earnings and profits as disguised sales (i.e. recoupment of basis), while retaining complete control of both the Target Sister Corporation and Buyer Brother Corporation after the purported sale. In such a transaction the Parent Corporation's stock ownership percentage does not diminish after the sale.

Section 367(a) generally requires US persons to recognize gain on certain transfers of stock or other property to foreign corporations as a toll charge before the stock or other appreciated property leaves U.S. taxing jurisdiction. U.S. persons, if they otherwise qualify, are permitted to avoid this toll charge by entering into GRAs with the IRS.

In a Section 304, one of the fictional steps that are deemed to occur is the contribution of stock under Section 351 to a foreign corporation. Under Notice 2012-15, these types of Section 304 transfers (Section 351 contribution) are now subject to Section 367(a) provisions, which but for the GRA would require the U.S. transferors to recognize gain on the difference between the value of the transferred stock and its basis (i.e. as if the U.S. person had sold the stock).

If you would like additional information on Gain Recognition Agreements and other accounting treatments for cross-border stock transfers, do not hesitate to contact our International Tax specialists or call us at 1-800-239-1474.

]]> <![CDATA[International Tax Advisory - Treasury Issues Regulations on NRA Deposits]]>
Raul Incera
Ana del Cerro-Fals

Through the Foreign Account Tax Compliance Act (FATCA), the U.S. Treasury Department (Treasury) has imposed a number of strict compliance initiatives on foreign financial institutions (FFIs).

In an attempt to promote cooperation and reciprocity with respect to certain foreign counterparts, the Treasury issued final regulations on April 19, 2012 regarding the reporting requirements for interest that relates to deposits maintained at U.S. offices of certain financial institutions (i.e. commercial banks, savings institutions, credit unions, securities brokerage firms and insurance companies that pay interest on deposits) and is paid to nonresident alien (NRA) individuals who are residents of countries identified as countries with which the U.S. has in effect an information exchange agreement.

IRS Revenue Procedure 2012-24 has a list of the countries that have such agreements with the United States

These regulations are applicable to payments of interest made on or after January 1, 2013.

Per Treasury: "A jurisdiction's willingness to share information with the IRS to combat offshore tax evasion by U.S. taxpayers depends, in large part, on the ability of the IRS to exchange information that will assist that jurisdiction in combating offshore tax evasion by its own residents. These regulations, by requiring reporting of deposit interest to the IRS, will ensure that the IRS is in a position to exchange such information reciprocally with a treaty partner when it is appropriate to do so."

The Treasury also expects that the regulations will enhance U.S. tax compliance by making it more difficult for U.S. taxpayers with U.S. deposits to falsely claim to be nonresidents in an attempt to avoid U.S. taxation.

Under FATCA, designated foreign financial institutions (FFIs) beginning in 2014 will be required to report to the IRS the account information of any U.S. accountholders, including foreign entities with substantial U.S. ownership.

It is anticipated that the Treasury will issue final FATCA regulations in the summer of 2012.

If you would like additional information regarding the Treasury's reporting requirements on interest paid to certain nonresident alien (NRA) individuals, do not hesitate to contact our International Tax specialists or call us at 1-800-239-1474.

]]> <![CDATA[International Tax Advisory - IRS Issues Proposed Regulations on Implementation of FATCA ]]>
Jack Brister
Manuel Pravia

The U.S. Treasury Department and the IRS on February 8 issued proposed regulations that would implement a phase-in of reporting and withholding obligations for designated foreign financial institutions (FFIs) under the Foreign Account Tax Compliance Act (FATCA).

The proposed regulations lay out a step-by-step process for U.S. account identification, information reporting and withholding requirements for FFIs, other foreign entities and U.S. withholding agents.

In a news release, the IRS said the proposed regulations attempt to reduce the administrative burdens associated with identifying U.S. accounts and reduce the due diligence requirements by permitting FFIs to, where possible, rely on information that they already collect under existing anti-money laundering or "know your customer" rules.

Additionally, the IRS and the Treasury Department expanded the categories of deemed compliant FFIs and adjusted the rules implementation schedule to allow time for resolving local law limitations to which some FFIs may be subject.

FATCA is part of the 2010 Hiring Incentives to Restore Employment Act (HIRE). The FATCA section of that law is on pages 27 through 48.

Unless an FFI signs and complies with a reporting agreement with the IRS by June 30, 2013 any U.S. source income it receives, including gross proceeds from sales of securities, will be subject to a 30 percent withholding tax. For FFIs that do not sign agreements, that withholding will be effective with 2014 tax years.

FATCA defines an FFI as a foreign entity that in its ordinary course of business accepts deposits or holds financial assets for others, or has primary business activity of investing in and trading of financial assets or commodities.

With limited exemptions foreign banks, broker dealers, foreign hedge funds, private equity funds, private investment funds, pension funds, insurance companies, foreign trust companies and foreign trusts are included in the FFI definition.

The IRS is accepting comments on the proposed regulations through April 30, 2012, thus indicating that it will issue final regulations several months after that date.

If you would like additional information on the IRS’s proposed rules on reporting and withholding requirements under FATCA, do not hesitate to contact our International Tax specialists or call us at 1-800-239-1474.

]]> <![CDATA[International Tax Advisory - IRS Reopens Offshore Voluntary Disclosure Program (OVDP)]]>
Miguel Farra
Jeffrey Blinn

The IRS on January 9, 2012 announced that it has reopened its Offshore Voluntary Disclosure Program (OVDP) under which taxpayers can become fully tax compliant for unreported offshore income, accounts, civil law foundations, trusts or entities.

The IRS said the OVDP will be open for an indefinite period until otherwise announced.

The program is similar to the OVDP that the IRS announced on February 8, 2011. Taxpayers had until September 9, 2011 to apply for participation in that program, in which they could become compliant on income for years between 2003 and 2010.

The new program has no set deadline for applications. However, the IRS said it could change the terms of the program at any time.

For the new program, the penalty framework requires individuals to pay 27.5 percent of the highest aggregate balance in foreign bank accounts/entities or value of foreign assets during the eight full tax years prior to the disclosure.

That is up from 25 percent in the 2011 program. Some taxpayers will be eligible for 5 percent or 12.5 percent penalties. These remain the same as in the 2011 program.

Participants must file all original and amended tax returns and include payment for back taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties.

Participants face a 27.5 percent penalty, but taxpayers in limited situations can qualify for a 5 percent penalty. Smaller offshore accounts will face a 12.5 percent penalty. People whose offshore accounts or assets did not surpass $75,000 in any calendar year covered by the new OVDP will qualify for this lower rate.

As under the prior programs, taxpayers who feel that the penalty is disproportionate may opt out, and instead be examined.

The IRS said it will release additional details of the new OVDP within the next month.

On January 9, the IRS also announced that it has collected more than $4.4 billion from its OVDPs of 2009 and 2011.

If you would like additional information on the IRS's new Offshore Voluntary Disclosure Program (OVDP), do not hesitate to contact our International Tax specialists or call us at 1-800-239-1474.

]]> <![CDATA[International Tax Advisory - Reporting Foreign Financial Assets Begins with 2011 Tax Year]]>
Boris Rosen
Jack Brister

The IRS has issued guidance that explains the foreign financial asset reporting requirements under Internal Revenue Code § 6038D for tax years 2011 and forward. These requirements are in addition to the FBAR (form TD 90-22.1) rules under Title 31 of the United States Code.

Prior to the issuance of the guidance on December 21, 2011, those taxpayers would not have been required to start reporting those holdings until the 2012 tax year—when they also would have been required to file reports for 2011.

Designated taxpayers must file Form 8938 (Statement of Specified Foreign Financial Assets) when they file their 2011 tax returns.

Individuals who may have to file Form 8938 are U.S. citizens and residents, nonresidents who elect to file a joint income tax return and certain nonresidents who live in a U.S. territory.

Specified foreign financial assets are:

  • Depository or custodial accounts at foreign financial institutions.
  • To the extent not held in an account at a financial institution, stocks or securities issued by foreign persons, any other financial instrument or contract held for investment that is issued by or has a counterparty that is not a U.S. person and any interest in a foreign entity.

The filing of Form 8938 is required when the total value of specified foreign assets exceeds the following thresholds:

  • For a single person or a married person living in the U.S. who does not file a joint return, more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.
  • For a married couple living in the U.S. and filing a joint return, more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year
  • For a single person or a married person living abroad who does not file a joint return, more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year.
  • For a married couple residing abroad and filing a joint return, more than $400,000 on the last day of the tax year or more than $600,000 at any time during the year.

Failure to file Form 8938 when required could result in a series of fines and penalties.

The requirement to file Form 8938 does not replace or otherwise affect a taxpayer's obligation to file an FBAR (Report of Foreign Bank and Financial Accounts (FBAR).

If you would like additional information on the IRS's requirements on the reporting of foreign financial assets, do not hesitate to contact our International Tax specialists or call us at 1-800-239-1474.

]]> <![CDATA[International Tax Advisory - IRS Provides Guidance on Compliance for U.S. Persons Residing Abroad]]>
Boris Rosen
Jack Brister

After the expiration of the 2009 and 2011 special Offshore Voluntary Disclosure Initiatives (OVDI) it was unclear as to how the U.S. Internal Revenue Service (IRS) would view, and treat, those U.S. persons residing abroad who had not yet met their U.S. tax obligations.

The IRS provided some answers on December 7, 2011 when it published Fact Sheet 2011-13 (FS 2011-13) which provides guidance on this matter. The Fact Sheet basically states that the IRS recognizes that after the above noted voluntary disclosures ended there may still be a large population of dual citizen taxpayers that may have only recently learned of their U.S. tax and Report on Foreign Bank and Financial Accounts (FBAR) obligations.

Such notice will be welcome relief as it clarifies that there is a way to remedy previous failure to file U.S. tax returns and foreign bank account reporting forms without imposition of penalties where the taxpayer owes no U.S. tax after application of the foreign earned income exclusion (FEIE) or foreign tax credit (FTC); or if there is reasonable cause for failure to file.

While the Fact Sheet refers specifically to dual citizens, its rules and guidance apply to any U.S. citizens including dual U.S. citizens.

The guidance states that if a taxpayer did not initially file a return but later files an accurate return pursuant to notice FS 2011-13 which shows no liability after application of the FEIE or FTC, the taxpayer should not be liable for penalties in connection with the previous failure to file.

Where a tax liability exists reasonable cause relief may still be granted. The taxpayer must be able to demonstrate they were not aware of their filing and tax obligations. The IRS will weigh in factors such as a person's:

  • Education
  • Their ability to have reasonably known of their expectation to file
  • History, if any, of compliance
  • Previously assessed penalties (if any)
  • The level of complexity of the compliance issue
  • Time between failure to comply and your subsequent actions to comply
  • Circumstances beyond their control

The recent notice represents an opportunity for U.S. persons residing abroad to submit late FBARs and income tax returns and avoid significant penalties. U.S. persons who believe this reasonable cause procedure may be to their advantage should contact their U.S. tax advisor to determine if they potentially qualify for such relief.

The Fact Sheet also explains that beginning in 2012, U.S. taxpayers who have an interest in certain specified foreign financial assets with an aggregate value exceeding $50,000 will have an obligation to report those assets to the IRS on Form 8938 Statement of Specified Foreign Financial Assets with their individual income tax return.

If you would like additional information on the IRS’s new guidance on compliance requirements for U.S. persons living abroad, do not hesitate to contact our International Tax specialists or call us at 1-800-239-1474.

]]> <![CDATA[International Tax Advisory - IRS Extends Deadline for Offshore Voluntary Disclosure Initiative Requests]]>
Boris Rosen

In a statement it issued on August 26 and further clarified on August 29 the IRS said that due to the potential impact of Hurricane Irene it has extended the due date for its 2011 Offshore Voluntary Disclosure Initiative (OVDI) requests and several other required informational returns from August 31, 2011 until September 9, 2011.

For those taxpayers who have not yet submitted their request and any documents, the IRS said the following actions are necessary by September 9, 2011:

  • Identifying information must be submitted to the Criminal Investigation office. This includes name, address, date of birth, and social security number and as much of the other information requested in the Offshore Voluntary Disclosures Letter as possible. This information must be sent to:

    Offshore Voluntary Disclosure Coordinator
    600 Arch Street, Room 6404
    Philadelphia, PA 19106

  • Send a request for a 90-day extension for submitting the complete voluntary disclosure package of information to the Austin campus. This request must be sent to:

    Internal Revenue Service
    3651 S. I H 35 Stop 4301 AUSC
    Austin, TX 78741
    ATTN: 2011 Offshore Voluntary Disclosure Initiative

The IRS's 2011 OVDI established a framework of penalties for taxpayers who become fully tax compliant for unreported offshore income, accounts, civil law foundations, trusts or entities for years between 2003 and 2010.

The IRS also extended the deadline for filing delinquent Reports on Foreign Bank and Financial Accounts (FBAR) that were due for calendar years prior to 2010 until September 9, 2011.

In addition, the IRS will not impose a penalty for the failure to file the information returns Form 5471 for controlled foreign corporations or Form 3520 for foreign trusts if there are no underreported tax liabilities and the information returns are filed by September 9, 2011.

If you would like additional information on the IRS's extended deadlines on the Offshore Voluntary Disclosure Initiative and on other informational returns, do not hesitate to contact our International Tax Specialists or call us at 1-800-239-1474.

]]> <![CDATA[International Tax Advisory - IRS Gives Signature Filers an Extra Four Months on Pre-2010 FBARs]]>
Miguel Farra
Jeffrey Blinn

The IRS has extended its deadline four months, from June 30, 2011 until November 1, 2011, for U.S. filers of the Form TDF 90-22.1 to report foreign accounts with respect to which they had signature authority but no financial interest during years before 2010. Generally, signature authority in respect of foreign accounts held at any time during the 2010 calendar year still must be reported no later than June 30, 2011.

The IRS on June 16 announced the extension in Notice 2011-54.

U.S. persons are required to file a Report on Foreign Bank and Financial Accounts (FBARs) annually if they have a financial interest in or signature authority over financial accounts, including bank, securities or other types of financial accounts, in a foreign country, if the aggregate value of these financial accounts exceeds $10,000.00 at any time during the calendar year. That report is due by June 30 of the immediately following year.

The latest extension is the third that the IRS has granted for persons with signature only authority on their filing of FBARs for 2009 and earlier years. Therefore, persons having signature authority, but no financial interest, in a foreign financial account now have until November 1, 2011 to file FBARs with respect to those pre-2010 year accounts.

This general relief for signature authority in respect of years prior to 2010 does not limit the extended filing due date of June 30, 2012 for 2010 and prior years for:

  • Officers or employees of banks, financial institutions or publicly traded companies with signature authority, but no financial interest, over certain foreign financial accounts of controlled entities (FinCen Notice 2011-1).
  • Officers or employees of investment advisors registered with the Securities and Exchange Commission who have signature or other authority but no financial interest in certain foreign financial accounts maintained by the investment companies (FinCen Notice 2011-2).

In addition, the extended deadlines described above do not modify the requirements or deadlines of the 2009 Offshore Voluntary Disclosure Program or the 2011 Offshore Voluntary Disclosure Initiative.

If you would like additional information on the IRS’s extension of FBAR requirements for filers with only signature authority, do not hesitate to contact us at 1-888-239-1474.

]]> <![CDATA[International Tax Advisory - IRS Suspends Two HIRE Related Information Reporting Requirements]]>
Miguel Farra
Jack Brister
Jeffrey Blinn

In Notice 2011-55, which it issued on June 21, the IRS suspended until further notice two information reporting requirements that were scheduled to take effect for the 2010 tax year.

One requirement is for U.S. persons who have specified foreign financial assets with a combined total that exceeds $50,000 during the tax year. The other is for shareholders of Passive Foreign Investment Companies (PFIC). The new requirements became effective on March 18, 2010 under the Hiring Incentives to Restore Employment Act of 2010 (HIRE Act).

The IRS said it is suspending the two requirements because it is unlikely that it will release the Forms needed for the filing of that information until after October 15, 2011, the extended filing deadline for 2010 tax returns.

Here are key details of IRS Notice 2011-55:

  • The definition of a specified foreign financial asset is any foreign financial account, foreign company stock, foreign bond, foreign financial contract or similar foreign asset, including a capital or profits interest in a foreign entity.
    HIRE requires U.S. persons who have such assets to disclose them on a new Form 8938. After the IRS releases that Form, those taxpayers will be required to file it for the current and prior year with their current year tax return.
  • The Hire Act expanded the requirements for filing IRS Form 8621. Previously, PFIC shareholders were required to file Form 8621 only when there was an income recognition event or election to be made. Under the change, all shareholders of a PFIC will be required to file a revised version of Form 8621 with their annual tax returns.

Because the revised form is not yet published, shareholders of a PFIC this year only need to File Form 8621 under the prior rules.

If you would like additional information on the IRS’s suspension of information reporting requirements on specified foreign financial assets and for Passive Foreign Investment Companies, do not hesitate to contact us at 1-888-239-1474.

]]> <![CDATA[International Tax Advisory - IRS Issues Proposal for Identification of Accounts Under FATCA]]>
Jack Brister

The IRS has proposed a new process for participating foreign financial institutions (FFIs) to use in identifying U.S. accounts that are subject to the Foreign Account Tax Compliance Act (FATCA) of 2010.

Details are in a Notice that the IRS issued on April 8. The IRS accepted comments through June 7, and will consider them in preparing regulations that it probably will issue this year.

For FFIs, FATCA requires new tax reporting, disclosures and withholding on bank accounts and other financial assets that their U.S. customers hold outside the United States. The requirements are scheduled to become effective on January 1, 2013.

In the recent Notice, the IRS proposed:

  • Introduction of a "private bank account" on which due diligence requirements would be stricter than on individual accounts.
  • Elimination of "monthly or quarterly" terminology from the definition of a U.S. account, and replacing it with "balance or value of the account at the end of a calendar year exceeding $50,000".
  • Requiring the Chief Compliance Officer of an FFI to sign under penalty that the FFI is in compliance with the agreement for due diligence and reporting.
  • Requiring additional documentation where an account would have any indication of a U.S. address such as "care of."

FATCA defines an FFI as a foreign entity that in its ordinary course of business accepts deposits or holds financial assets for others, or has primary business activity of investing in and trading of financial assets or commodities.

Under FATCA, unless an FFI signs and complies with a reporting agreement with the IRS, any U.S. source income it receives on designated accounts will be subject to a 30 percent withholding tax.

If you would like additional information on the IRS’s latest proposal on compliance with FATCA, do not hesitate to contact us at 1-800-239-1474.

]]> <![CDATA[International Tax Advisory - IRS Will Grant Some Extensions on Offshore Disclosure Filings]]>
Miguel Farra
Jeffrey Blinn

The IRS is giving some taxpayers an additional 90 days beyond its previously announced August 31, 2011 deadline to comply with its 2011Offshore Voluntary Disclosure Initiative (OVDI) .

On June 2, the IRS provided details of that extension in an update of its Web site’s section on the OVDI. Under "Frequently Asked Question 25," the IRS said: "A taxpayer may request an extension of the deadline to complete his or her submission if the taxpayer can demonstrate a good faith attempt to fully comply on or before August 31, 2011".

The new IRS document has details on materials that taxpayers must include in those filings for extensions. MBAF tax advisors are available to assist in that process.

The IRS announced its 2011 OVDI on February 8. Under that initiative, taxpayers have until August 31, 2011 to become fully tax compliant for unreported offshore income, accounts, civil law foundations, trusts or entities for years between 2003 and 2010.

On March 1, the IRS announced its penalty framework for taxpayers who make voluntary disclosure requests under the 2011 OVDI.

If you would like additional information on the process for seeking an extension in complying with the IRS’s 2011 OVDI, do not hesitate to contact us at 1-800-239-1474.

]]> <![CDATA[International Tax Advisory - IRS Sets Penalty Framework for Offshore Voluntary Disclosure ]]>
Jack Brister
Miguel Farra

The IRS on March 1 established a penalty framework for taxpayers who make voluntary disclosure requests under its 2011 Offshore Voluntary Disclosure Initiative (2011 OVDI).

In a memorandum it issued to its examiners, the IRS said its position is that the framework will apply to all voluntary disclosures submitted after October 15, 2009. That was the deadline under its first OVDI, which it issued in March 2009.

The new penalty framework is for the 2011 OVDI that the IRS announced on February 8. Under that initiative, taxpayers have until August 31, 2011 to become fully tax compliant for unreported offshore income, accounts, civil law foundations, trusts or entities for years between 2003 and 2010.

On March 1, the IRS said that important aspects of the 2011 OVDI penalty framework include:

  • In most cases it will assess a penalty equal to 25 percent, compared with 20 percent under the 2009 OVDI, of the value of foreign financial accounts/entities subject to taxation. That penalty will be in addition to all taxes and interest due for years between 2003 and 2010.
  • If a taxpayer's total foreign assets were less than $75,000 in each of the years covered, the penalty is 12.5 percent.
  • Under some circumstances, mostly involving minimal contact with an account, the penalty is 5 percent.

If you would like additional information on the IRS's penalty framework under its 2011 OVDI, do not hesitate to contact us at (305) 373-5500 or at (212) 576-1400.

]]> <![CDATA[International Tax Advisory - Foreign Financial Institutions Must Prepare for FATCA Reporting]]>
Jack Brister
Raul Incera

An extremely important issue for foreign financial institutions (FFIs) is the pending U.S. Treasury issuance of Regulations for tax reporting and withholding on bank accounts and other foreign financial assets that their U.S. customers hold outside the United States.

Those disclosures and related reporting are scheduled to become effective January 1, 2013 under the Foreign Account Tax Compliance Act (FATCA), which Congress passed in March 2010. FATCA was included in the Hiring Incentives to Restore Employment Act. The FATCA section of that law is on pages 27 through 48.

The FATCA requirements are part of the effort by Congress and the Obama administration to increase the reporting and collection of taxes on financial assets held by U.S. taxpayers outside the United States.

These requirements essentially mandate any foreign financial institution, with limited exception, that receive U.S. source income on behalf of their clients or their own account to become the equivalent of a Qualified Intermediary and in addition look beyond the direct beneficial owner of an account or investment to the ultimate indirect owners.

It is anticipated that during mid 2011 the U.S. Treasury will issue final rules that will provide guidance regarding the tax reporting provisions of FATCA, and possible external examination requirements. It is important for banks and other institutions that meet the definition of FFI to begin preparations this year in order to ensure compliance.

Unless an FFI signs and complies with a reporting agreement with the IRS, any U.S. source income it receives, including gross proceeds from sales of securities, will be subject to a 30 percent withholding tax.

FATCA defines an FFI as a foreign entity that in its ordinary course of business accepts deposits or holds financial assets for others, or has primary business activity of investing in and trading of financial assets or commodities. With limited exemptions by way of the above noted Treasury Regulations, foreign banks, broker dealers, foreign hedge funds, private equity funds, private investment funds, pension funds, insurance companies, foreign trust companies and foreign trusts are included in the FFI definition.

With certain exceptions, a U.S. account is any account with an FFI in which the account holder is a U.S. person, including those where the holder is a foreign entity in which a U.S. person has a 10 percent or greater interest.

The FFI agreement will require the following:

  • Report U.S. account information
  • Withhold 30 percent for non-compliance to the extent that the FFI may be required to assume withholding tax responsibility.
  • Comply with IRS information requests.
  • Close an account if the U.S. account holder refuses to waive its right to secrecy

The preparation for FATCA will include certain due diligence, education and the development of systems, policies and procedures. The component of most concern is determining whether each account is a U.S, account, and thus subject to FATCA reporting and withholding, or a foreign account that is not under those requirements.

If you would like additional information on the pending requirements under FATCA, do not hesitate to contact us at (305) 373-5500 or at (212) 931-9158.

]]>