IRS Loosens Deadline for Banks to Document Foreign Status Under FATCA

Oct. 10 — Withholding agents and foreign financial institutions will be given extra time to comply with requirements for determining an account holder’s foreign status, the IRS said.

The Internal Revenue Service, in Notice 2014-59 issued Oct. 10, said withholding agents, foreign financial institutions and payers have until Jan. 1, 2015, to apply new entity account procedures required by the Foreign Account Tax Compliance Act.

Previous guidance issued in Notice 2014-33 didn’t address new accounts opened on or after July 1, 2014, and before Jan. 1, 2015, the IRS said (86 DTR G-4, 5/5/14)

The IRS’s action allows FFIs, withholding agents and other payers to treat such accounts as pre-existing for purposes of FATCA, and also provides circumstances under which a withholding agent or other payers may rely on documentary evidence other than a withholding certificate to document the foreign status of a payee under FATCA.