This Newsbrief describes key changes contained in the technical correction and provides observations.
The Internal Revenue Service (IRS) on September 10 issued correcting amendments to the final Foreign Account Tax Compliance Act (FATCA) regulations released in January. The amendments clarify and correct various provisions and according to the release, their purpose is three-fold: (i) correct several citations and cross references, (ii) modify the regulatory language to clarify the relevant provisions to meet their intended purposes; and (iii) ensure that the rules in the final FATCA regulations are coordinated with rules in other relevant regulations, such as those under Chapters 3 and 61 of the Internal Revenue Code.
These amendments should be read in context with the current regulations. According to the release, the effective date of the corrections is September 10, the date of publication in the federal register. The release also references an applicability date as of January 28, 2013. From a practical perspective, these corrections should be viewed as if they were promulgated at the time the final regulations were released.
As is typical, many of the correcting amendments are grammatical in nature. However, some clarifications are more technical – they either formally ‘connect the dots’ in the regulatory language or make minor substantive changes to the rules themselves. As a result, the corrections should be reviewed by stakeholders to determine their impact, if at all, on their compliance plan and previously completed analyses.