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Notable notes – June 6 IRS points on FATCA

Key points on the FATCA registration process for Foreign Financial Institutions (FFIs)

  • FFIs will register through an online registration system and enter an agreement (a certification, if a Deemed-Compliant FFI) to complete registration
  • Each FFI must select a FATCA Responsible Officer (RO)
    • This individual will be identified in the FATCA registration system
    • In a typical case, the RO will be the individual to sign the FFI agreement
  • The RO may select Points of Contact (POCs) to help complete all aspects of the registration process except signing
    • It is anticipated POCs may include certain third-party individuals, both local and US
  • It is anticipated that there will be power of attorney procedures allowing the RO to delegate full FATCA registration duties (including signing) to another in-house individual
    • This individual will be identified in the registration system as the FFI’s Authorized Third Party (ATP)
  • If it proves unworkable for the Responsible Officer (RO) or another in-house individual to register the FFI, it is anticipated there will be power of attorney procedures allowing the RO to delegate full FATCA registration duties to certain U.S.-licensed tax professionals that are subject to our regulatory jurisdiction
    • This individual will be identified as the FFI’s Authorized Third Party (ATP)
  • FATCA registration is a user maintained account – it can be edited or modified by the user
  • There is an affirmative statement in the registration process that the person signing has the authority to act for the FFI
  • Positive ID verification will be required for the single individual who will sign the agreement/certification on behalf of the FFI (i.e., for the RO or ATP)
  • IRS will vigorously monitor the account creation and FATCA registration process
Role Description
Responsible Officer (RO) Individual Officer of the FFI in a position to register and sign the FFI agreement
Point of Contact (POC)
  • Listed individuals selected by RO (or Authorized Third Party, if applicable) help complete registration (cannot sign)
  • Must have one in-house POC and also may designate certain qualified local or U.S third parties
  • Authorized to receive FFI’s otherwise confidential tax information to assist in carrying out any necessary or appropriate actions (aside from signing agreement/certification), or in responding to any IRS communication, relating to the FFI’s compliance with FATCA
Authorized Third Party (ATP) Only certain in-house individuals and certain types of U.S.-licensed tax professionals will be eligible to be designated by the RO to perform all registration duties, including signing the FFI agreement /certification (standards still under development)

ID Verification for Registering FFIs

  • Positive ID verification is required for the individual who will sign the FFI agreement/certification
  • The process of identity verification can be done electronically or by paper
    • Electronic: The Responsible Officer (RO) may provide his/her SSN or ITIN in the registration system
    • Paper: The RO may provide Form 8956 and appropriate documentation
    • Process still being developed for Authorized Third Parties (ATPs)
  • A FATCA Individual Identification Number (FIIN) will be issued to the RO or ATP once his/her identity is verified
  • The FIIN is then used by the individual who will sign the FFI agreement/certification

After the agreement/certification is signed and submitted, the FFI receives approval

  • For a single FFI, after signing the agreement/certification, the FFI will be notified when it is approved by the IRS and will receive an FFI EIN
    • The exception is a limited FFI. Even if part of an affiliated group, a limited FFI will not receive an FFI EIN
  • For an Expanded Affiliated Group (Lead and members), each registering FFI in the group must sign an agreement/certification
    • After each FFI in the group has signed its agreement/certification, the group will be approved and each FFI that is not a Limited FFI will receive an FFI EIN
  • Participating FFIs and Registered-Deemed Compliant FFIs will be placed on a publicly available FFI list

To prepare for registration, an FFI must first decide its FATCA classification and whether it must register

  • Participating FFI; or
  • Limited FFI; or
  • Deemed-Compliant FFI
    • Not all Deemed-Compliant FFIs are required to register
  • This classification will affect the obligations of the FFI
  • The specific definitions of types of FFI are contained in the proposed FATCA regulations; these definitions may be subject to change in the final regulations

FFIs will need to collect several key pieces of information in preparation for the registration process

  • Designate Responsible Officer (RO)
    • Obtain RO Information: Name, Title, Address, Phone Number, Email Address; and
      • SSN and/or ITIN (if applicable)
      • A separate application for a FATCA Individual Identification Number (FIIN), Form 8956, if RO does not have an SSN or ITIN
  • Designate Point of Contact (POC), if different from RO
    • Obtain POC Information: Name, Title, Address, Phone Number, Email Address
    • There can be up to five POCs for each FFI
  • Obtain FFI Information
    • Types of Accounts Maintained by FFI
    • Mailing address and physical address of FFI
    • Date and Country of FFI Incorporation or Organization
    • FFI Country of Residence for Tax Purposes
    • Identify countries in which the FFI has branches, if applicable
    • Collect QI/WP/WT information, including renewal
  • Lead FFIs will need to list all registering members of Expanded Affiliate Group

 

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