IRS Focuses on FATCA Guidance Needed for 2014 Deadlines

Two IRS officials told a conference in New York City recently that the IRS is focused on preparing and finalizing guidance needed for U.S. withholding agents and foreign financial institutions to meet FATCA obligations that commence on January 1, 2014.Steve Musher, IRS Associate Chief Counsel (International), indicated, for example, that the terms of the foreign financial institution ("FFI") agreement that FFIs in non-Model 1 IGA countries must sign and final versions of registration and reporting forms should be published prior to the time that the FATCA registration portal opens on July 15, 2013. Also, regulations harmonizing the current withholding rules under Chapter 3 of the Internal Revenue Code with FATCA should be issued soon.

Tara Ferris, an attorney with the IRS Chief Counsel (International) office, said the IRS is considering publishing a list of IGA countries that potential registrants may rely upon even before such IGAs are finalized. Musher also said that certain "technical corrections" to the final FATCA regulations that were issued in February 2013 would probably be published soon, with more substantive changes, if any, to follow. Guidance with respect to withholding on gross proceeds and other issues that don't take effect until after 2014 are further back in the pipeline and may ultimately be affected by the ongoing negotiation of IGAs.

Questions on this item may be directed to Dan Mulcahy.