IRS Launches International Data Exchange Service for FATCA Reporting

The IRS announced that the International Data Exchange Service ("IDES") is open for enrollment.

IDES will be used by financial institutions and foreign governments that have entered into Intergovernmental Agreements ("IGAs") under FATCA to send information reports securely to the IRS on financial accounts held by U.S. persons. According to the IRS, IDES is a Web-based application that is used by the sender to encrypt the data and also encrypts the transmission pathway to protect data transfers. Where a jurisdiction has a reciprocal IGA, similar information will be provided to the foreign jurisdiction through IDES by the IRS once it is comfortable that the jurisdiction has the necessary safeguards and infrastructure in place to protect such data.

The IRS also encouraged financial institutions in Model 2 IGA countries that are required to report financial account information directly to the IRS to begin the enrollment process as soon as possible and in advance of their reporting deadline. Model 1 IGA jurisdictions will be notified directly by the IRS when it is time to enroll. All IDES enrollees must obtain a digital certificate, which binds digital information to physical identities and provides data integrity, in order to enroll.

Further information about IDES, including a User Guide, Frequently Asked Questions and a list of approved Certificate Authorities, can be found at the IDES home page.

See: IRS Press Release; Further Information about IDES.See also: FATCA Specialty Page (available to Cabinet subscribers only).