Global Information Reporting - January 16, 2015

The following are recent developments related to FATCA and other US and non-US Information Reporting requirements. For further information, please contact a member of PwC's Global Information Reporting network.

Recent developments

Updated Publication 515 released

The IRS has released the 2015 revision of Publication 515. The Publication is for withholding agents who pay US source income to non-US persons, including nonresident aliens, foreign corporations, foreign partnerships, foreign trusts, foreign estates, foreign governments and international organizations. It describes the persons responsible for withholding, the types of income subject to withholding and the information return and tax return filing obligations of withholding agents.

Although this revision of Publication 515 is primarily for use in 2015, it also includes information that is relevant for 2014.

For more information, download Publication 515.

New IRS training materials

The IRS released a series of new International Practice Units (IPUs) as part of an effort to train a portion of its domestic examiners to handle international issues.

Two IPUs may be of particular interest to those working in the area of Tax Information Reporting. The presentations include references to the relevant regulations, court cases and other guidance.

  • Overview of FDAP

  • Qualification for Treaty Benefits under the Publicly Traded Test

    For more information, see the complete list of International Practice Units.

    Updated Form W-9

    The IRS released an update to  Form W-9 (Request for Taxpayer Identification Number and Certification). Form W-9 is used to request the taxpayer identification number (TIN) of a U.S. person (including a resident alien) and to request certain certifications and claims for exemption. Withholding agents may also require signed Forms W-9 from U.S. exempt recipients to overcome a presumption of foreign status.

    There were no significant changes made.  Most prominent visually is that there are now numbered lines.  There is also a new note indicating that for a single-member LLC that is disregarded the federal tax classification of the single owner should be checked rather than checking the "LLC" box.   There is an expanded purpose section that lists several information returns that may prompt a payor to ask for a Form W-9.

    The Form W-9 does not have the six-month implementation allowance that applies to Forms W-8. Therefore, the updated Form W-9 should be incorporated into existing onboarding processes as soon as possible.

    The IRS also released new Instructions for the Requester of Form W-9. The instructions address topics including:

  • How Do I Know When To Use Form W-9?

  • Electronic Submission of Forms W-9

  • Substitute Form W-9

  • Payees and Payments Exempt from Backup Withholding

    For more information

  • Download the updated Form W-9

  • Download the Instructions for the Requester of Form W-9

    A number of US information reporting forms and instructions can be accessed in the table that appears at the bottom of this note.

    Extension of joint account option under FATCA

    The IRS announced an extension of time for qualified intermediaries, withholding foreign partnerships, and withholding foreign trusts to apply the requirements of the joint account option to their respective agreements under FATCA. The announcement applies to certain entities that apply to enter into or have entered into the Qualified Intermediary (QI) Agreement published in Revenue Procedure 2014-39 and certain entities that apply to enter into or have entered into the Withholding Foreign Partnership Agreement or Withholding Foreign Trust Agreement, published in Revenue Procedure 2014-47.

    For more information, read IRS Bulletin 2014-48.

    Additional IGAs released

    The text of more Intergovernmental Agreements (IGAs) have been released.  The Treasury IGA web site has 54 signed IGAs posted and lists 58 additional jurisdictions that have reached agreements in substance.

    Follow the links below for more information:

    IRS FATCA International Data Exchange Service (IDES) portal and related updates

    The Internal Revenue Service announced the opening of the IDES for enrollment.  The International Data Exchange Service (IDES) is an electronic delivery point where Financial Institutions (FI) and Host Country Tax Authorities (HCTA) can transmit and exchange FATCA data with the United States. The announcement provides additional information and links to the new IDES portal and other resources.

    A draft version of the IDES User Guide has been posted. The draft discusses data preparation procedures and reporting. IDES will post frequent updates and a final version of the IDES User Guide will be available in early January 2015.

    The IRS has also posted Alert 2015-4 addressing 1) Schema namespace issues; 2) Prohibited characters; and 3) Digital certificate format.

    The IRS released new pages related to the (IDES) and updated others.  The new or updated pages include:

    Updates to IRS FATCA FAQs

    A.FATCA General FAQ

    The IRS has added two questions to the FATCA General FAQ.

    IGA Registration


    Announcement 2014-38 provides that a jurisdiction that is treated as if it has an IGA in effect, but that has not yet signed an IGA, retains such status beyond December 31, 2014, provided that the jurisdiction continues to demonstrate firm resolve to sign the IGA that was agreed in substance.  Given this additional time to sign the IGA, does a reporting Model 1 FFI in such a jurisdiction need to register and obtain a GIIN before January 1, 2015?

    General Compliance


    What is an acceptable self-certification for purposes of the Annex I due diligence procedures for preexisting and new accounts?  Does the self-certification form have to be agreed with the United States? 

    To read the answers, see the IRS General FAQ.

    B.New and updated IRS IDES FAQs

    The IRS has added and / or updated several questions on the FATCA International Data Exchange Service (IDES) FAQ.

    General Questions


     How can HCTA and FFI obtain information as to system development progress and status? (Updated 01-05-2015)


    What types of technical support will be present during integration testing? How will the HCTAs and FFIs report issues with integration testing back to the IRS? (Updated 01-05-2015)

    Data Format and Structure


    When will a template pertaining to the request for information on recalcitrant accounts be provided? (Updated 01-05-2015)

    When will sample XML files related to FATCA submissions be available? (Added 01-05-2015)


    What is the format for sending metadata for file transfers to IDES (e.g., indicate a specific sender / receiver)? (Updated 01-05-2015)


    If an individual has only received certain payment types, should the other payment types be listed with a zero amount or should they be omitted from the report for that individual? (Added 01-05-2015)


    What is the procedure for FFIs and HCTAs to verify test data prior to the launch of IDES? (Added 01-05-2015)


    Can an HCTA create it's own standard numbering format for the MessageRefID in the 8966 XML Schema for its financial institutions to use? (Added 01-05-2015)


    Are there any characters that pose a security threat and should be avoided in submitted XML documents? (Added 01-14-2015)


    Are there any characters that pose a security threat and should be avoided in submitted XML documents?


    Are there any other characters where the IRS recommends replacement with XML entity references?


     Is there any element-specific XML guidance?

    Data Transmission


    What are the procedures for sending files to IDES and/or ICMM systems? (Updated 01-5-2015)


    What are the procedures for sending metadata for files to IDES? (Updated 01-5-2015)


    Will requests from the IRS for information on recalcitrant accounts be transmitted via email? (Updated 01-5-2015)


    What is the procedure for sending corrected and/or amended data to receiving HCTA? Will the resubmission need to include only the corrected / amended entries or will the entire report need to be resubmitted?

    Data Encryption and Security


    How will passwords and keys be controlled for data transmission? (Updated 01-05-2015)


    Who is responsible for data transmission security via encryption? (Updated 01-05-2015)


    What are the requirements for digital certificates? (Updated 01-05-2015)


    Can the AES 256 key be re-used for subsequent data transmissions or does the key have to be different each time? (Added 01-05-2015)

    To read the answers, see the FATCA IDES Technical FAQs.