Today the IRS released proposed FATCA regulations which clarify the definition of “Investment Entity,” and eliminate withholding on payments of gross proceeds. Gross Proceeds Withholding Eliminated A withholdable payment is: Any payment of interest (including any original issue discount), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits, and income, if such p

Human Resources (HR) has the power to prevent honest employees from being investigated by the IRS. Helping employees and their children avoid civil and/or criminal IRS investigations is as simple as alerting them to the concept of “Accidental American.” Who Is An Accidental American? “Accidental American” is a phrase used to denote certain individuals who are unaware that they are subject to U.S. tax laws. They may have been born in the U.S. and left as infants. They may h

The IRS Large Business and International division (LB&I) recently announced five new compliance campaigns including a FATCA compliance campaign. What Is LB&I? LB&I is a division within the IRS. It handles tax issues related to corporations, subchapter S corporations, and partnerships with assets greater than $10 million. Its work includes studying compliance issues and suggesting IRS compliance audits covering the following areas: Cross border activities Enterprise activ

FATCA requires U.S. Financial Institutions (USFIs) to withhold 30 percent on U.S. Source Withholdable Payments made to Foreign Financial Institutions (FFIs). When is this enforcement stick applicable? What Is a Withholdable Payment? The term “U.S. Source Withholdable Payment” means payments of interest (including any original issue discount), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annu

On September 11, 2018 Adrian Baron, Chief Business Officer at Loyal Bank Limited, Budapest pleaded guilty for failing to comply with FATCA. Who Is Adrian Baron? 63 year-old UK citizen. Became a St. Vincent and the Grenadines (SVG) citizen after residing in SVG for approximately eight years. Relocated from SVG to Budapest, Hungary in 2015. Former CEO of Loyal Bank and CBO at time of indictment. Business responsibilities included global marketing and sale; public relation

To comply with FATCA regulations, each Sponsored Entity must enter into a written agreement with its Sponsoring Entity. The Sponsoring Entity’s Responsible Officer is required to certify to the IRS that this agreement is in place. Sponsored & Sponsoring Entities Defined A Sponsored Foreign Financial Institution (FFI) is an FFI that is an investment entity or a controlled foreign corporation which has a Sponsoring Entity performing FATCA due diligence, withholding, and report

The IRS implemented its online FATCA certification process and sent out messages to registered financial institutions this week. Check your registered entity accounts in the IRS FATCA portal to see if you received two messages re: Certification of Compliance with the Due Diligence Requirements for Pre-existing Accounts of PFFIs (Including Reporting Model 2 FFIs) Periodic Certification The IRS sent out messages on July 23. The deadline to complete the online certification

In anticipation of the IRS implementing its online FATCA certification process, now is the time to consider internal FATCA sub-certifications. The FATCA regulations do not require a sub-certification process. However, sub-certifications can be a useful part of the internal control process under a Foreign Financial Institution’s (FFI’s) FATCA policies and procedures. RO Delegation FATCA permits a Responsible Officer (RO) to delegate compliance tasks to other personnel. The

The Bahamas announced that its AEOI Portal is now open for CRS and FATCA registration and reporting. The key dates are: Deadline for FATCA and CRS registration is Friday August 3, 2018 at 5 PM. Closing Date for FATCA and CRS reporting is Friday August 31, 2018 at 5 PM. As a reminder 5:00 PM Bahamas time is 5:00 PM New York, 10:00 PM London, and Hong Kong 5:00 AM August 4, 2018 / September 1, 2018. Click for the Bahamas Competent Authority AEOI Portal User Guide which wa

The first round of IRS compliance certifications begins this summer. The current deadline is likely October 2018: 90 days after the IRS deploys the certifications capability on the IRS FATCA Registration Portal. Make sure you do not overlook certifying U.S. Financial Institutions (USFIs) and Foreign Grantor / Non-Grantor Trusts. What Are the Certifications? There are two certifications : Certification of Pre-existing Accounts; and Periodic Certification. For an outlin

The Cayman Islands changed its deadline for CRS and FATCA reporting: Original deadline May 31 Portal closed June 1 - June 14 Portal reopens June 15 New deadline July 31 Portal remains open until August 31 Please note that submissions made after July 31 will be noted and may be subject to compliance reviews by the Cayman Islands tax authority. For assistance, please contact me via my contact page or at elizabeth@elizabethmcmorrowlaw.com .

Singapore released its FATCA reporting nil paper form yesterday. The Inland Revenue Authority of Singapore (IRAS) requires nil reporting under FATCA. IRAS does not provide an online service or separate portal for manual input and reporting of FATCA data. Nil reporting can be accomplished through a paper form rather than through a complex electronic reporting process. 3301 Singapore Financial Institutions (FIs) have received Global Intermediary Identification Numbers (GIINs)

For tax years beginning after 2016, the due date for a U.S. person to file IRS Form 3520 has changed to the fifteenth day of the fourth month following the end of the U.S. person’s tax year. For those following a calendar year, (taking into account the Emancipation Day holiday) the deadline in 2018 is April 17, 2018. IRS Form 3520 U.S. persons engaging in transactions with a foreign grantor trust, such as transfers to, or distributions from the trust must file IRS Form 3520