IRS releases updated QI agreement providing guidance for QIs under FATCA and Chapter 3

July 2014

On June 27 2014, the Internal Revenue Service released Revenue Procedure 2014-39 which provides guidance on the reporting, withholding, account documentation and registration requirements for a non-US intermediary entering into or renewing a qualified intermediary (QI) agreement.

The issuance of a new QI agreement has been anticipated, and the majority of the changes from the existing QI agreement reflect the documentation, reporting and withholding requirements set forth under the provisions of FATCA. The new QI agreement coordinates account documentation, withholding, and reporting requirements with those under FATCA. Finally, as expected, the external audit procedures in the previous QI agreement have been replaced by a responsible officer concept which requires periodic compliance certifications and mandatory periodic reviews by an internal compliance program.