High Audit Risk for Certain FATCA-Related Scenarios

The IRS has identified three situations that are at high risk for a FATCA-related audit. These situations include (i) a withholding agent's failure to properly withhold or correctly perform due diligence, (ii) a foreign financial institution's failure to account for properly, and therefore report, its individual account holders, and (iii) a U.S. account holder's failure to report its accounts properly.

Over the next several months, the IRS also will continue to tailor its enforcement to identify mismatches in the information it receives through the automatic exchange of FATCA-related information, including through its recently launched International Data Exchange Service. Cases that fall within the high-risk scenarios listed above will be examined by existing enforcement teams.

See: FATCA Specialty Page (available to Cabinet subscribers only).