IRS Unveils Data Transmission Service for FATCA IGA Reporting

In its revised set of Frequently Asked Questions, the IRS announced a new technical system designed to exchange taxpayer information between the IRS and foreign countries under FATCA. The new process, known as the International Data Exchange Services ("IDES"), will allow the IRS to receive, process, store and manage FATCA data received from various sources to support its compliance activities. Under the Model 1 Intergovernmental Agreement ("IGA"), which has been entered into or "agreed to in substance" by over 90 countries, the tax authorities in the IGA countries (referred to as "Host Country Tax Administrations" or "HCTAs"), must collect tax information from foreign financial institutions resident in their respective countries and report such information to the U.S. IRS. The IDES system will be a key part of that process. IDES will be used to transmit this information as well as requests for information on recalcitrant account holders.

The IRS indicated that integration testing of the new system is planned for late November 2014, with a January 12, 2015 target date for the system to "go live." Additional information on data transmission security, encryption and compatibility with IPv6 and other protocols will be available from the IRS in the near future in IDES Alerts and on the IRS website.

See: Revised FAQ.See also: FATCA Specialty Page (available to Cabinet subscribers only).For more information, please contact Daniel Mulcahy and Mark Howe.