On October 28, 2024, the U.S. Internal Revenue Service (IRS) issued Notice 2024-78 which allows certain Model 1 Foreign Financial Institutions (FFIs) which have been unable to obtain a U.S. tax identification number (TIN) for their pre-existing accounts that are FATCA reportable accounts to report without U.S. TINS for the years 2025, 2026, and 2027.
FATCA Reporting Data Points
When a Model 1 IGA FFI / FI determines that a client account is reportable under FATCA, the FI must report information related to that account including:
Name
Address
U.S. TIN
Account number (or equivalent)
Account balance or value
Amount paid / credited to account (e.g., interest, dividends, surrender value, redemption payment)
TIN Problems
When FATCA was implemented, many FIs did not have a U.S. TIN for accounts held directly or indirectly (e.g., FATCA Controlling Person) by a U.S. Person. If the FI was unable to obtain the U.S. TIN, then the outcome could be closing a good client’s account and/or the FI becoming a Nonparticipating FFI under FATCA. The IRS decided to permit on a temporary basis for the FIs to report such accounts without the U.S. TIN. Notice 2024-78 continues this temporary permission.
Notice 2024-78
The IRS decided it would be useful to continue to evaluate the IRS TIN Codes used in place of U.S. TINs and other information provided by Model 1 FIs to better understand account characteristics that may make it difficult for a reporting Model 1 FI to obtain and report the required U.S. TINs. The extension of the use of TIN Codes applies only to:
Pre-existing accounts
Model 1 IGA FIs “in an eligible jurisdiction that makes good faith efforts to increase the likelihood that U.S. citizens residing in that jurisdiction will report their U.S. TINs to the FFIs and that takes other steps specified” in the notice
Model 1 IGA FIs that comply with the notice including:
Obtaining and reporting the date of birth of each account holder that is an individual and controlling person whose U.S. TIN is not reported;
Requesting annually from each account holder any missing required U.S. TIN;
Searching annually electronically searchable data maintained by the reporting Model 1 FI for any missing required U.S. TINs;
Reporting an accurate TIN Code for each account that is missing a required U.S. TIN;
Reporting an foreign tax identification number (FTIN) for each specified U.S. person that is missing a required U.S. TIN if the FI’s electronically searchable account information contains an FTIN (or functional equivalent) assigned to a taxpayer by its country of residence; and
Using the AddressFix element discussed in the notice to report the city and country of residence for each specified U.S. person with a missing required U.S. TIN.
Updating FATCA policies and procedures to reflect the FI followed the requirements in the notice.
Maintaining records related to TIN Code compliance until 2031.
For assistance, please contact me via my contact page or at elizabeth@elizabethmcmorrowlaw.com.
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