Internal Revenue Service (IRS), Treasury.
Final and temporary regulations.
This document contains final and temporary regulations under chapter 4 of Subtitle A (sections 1471 through 1474) of the Internal Revenue Code of 1986 (Code) regarding information reporting by foreign financial institutions (FFIs) with respect to U.S. accounts and withholding on certain payments to FFIs and other foreign entities. These regulations affect persons making certain U.S.-related payments to FFIs and other foreign entities and payments by FFIs to other persons. The text of the temporary regulations also serves as the text of the proposed regulations set forth in a cross-reference notice of proposed rulemaking (REG–130967–13) published in the Proposed Rules section in this issue of the
Tara Ferris, Nancy Lee, Michael Kaercher, or Kamela Nelan at (202) 317–6942 (not a toll-free number).
This document contains amendments to the Income Tax Regulations (CFR part 1) under sections 1471 through 1474 of the Code (commonly known as the Foreign Account Tax Compliance Act, or FATCA). On March 18, 2010, the Hiring Incentives to Restore Employment Act of 2010, Public Law 111–147 (the HIRE Act), added chapter 4 of Subtitle A (chapter 4), comprised of sections 1471 through 1474, to the Code. Chapter 4 generally requires U.S. withholding agents to withhold tax on certain payments to foreign financial institutions (FFIs) that do not agree to report certain information to the Internal Revenue Service (IRS) regarding their U.S. accounts, and on certain payments to certain nonfinancial foreign entities (NFFEs) that do not provide information on their substantial United States owners (substantial U.S. owners) to withholding agents. On January 28, 2013, final regulations (TD 9610) under chapter 4 were published in the
Following publication of the final regulations, the Treasury Department and the IRS also issued additional guidance under chapter 4. Notice 2013–43 (2013–31 I.R.B. 113) previews the revised timelines for implementation of the FATCA requirements (which are adopted by these temporary regulations) and provides additional guidance concerning the treatment of FFIs located in jurisdictions that have signed intergovernmental agreements for the implementation of FATCA (IGAs) but have not yet brought those IGAs into force. In particular, Notice 2013–43 clarifies that a jurisdiction is treated as having in effect an IGA if the jurisdiction is listed on the Treasury Web site as a jurisdiction that is treated as having an IGA in effect. In general, the Treasury Department and the IRS intend to include on this list jurisdictions that have signed but have not yet brought into force an IGA. The list of jurisdictions that are treated as having an IGA in effect is available at the following address:
Chapter 4 grants the Secretary of the Treasury broad regulatory authority to prescribe rules and procedures relating to the diligence, reporting and withholding obligations under FATCA. The Treasury Department and the IRS exercised this authority by publishing final regulations that provide specific operational guidelines for implementing FATCA in a manner consistent with its policy objectives. As described in the preamble to the final regulations, the final regulations implement the statute based on a risk-based approach that is intended to address policy considerations, eliminate unnecessary burdens, and to the extent possible, build on existing practices and obligations.
Following publication of the final regulations, the Treasury Department and the IRS received unsolicited comments suggesting changes to or requesting clarification of certain rules in the final regulations. As a result of these comments, the Treasury Department and the IRS have continued to work with affected parties to develop rules that achieve an appropriate balance between fulfilling the important policy objectives of chapter 4 and minimizing the burdens imposed on stakeholders. As part of this process, the Treasury Department and the IRS have carefully considered comments received in response to the final regulations and have met with stakeholders. While many of these comments reiterate comments that were received and considered prior to the publication of the final regulations or suggest changes to the final regulations that are outside the scope of these temporary regulations, a number of comments proposed changes to the final regulations that the Treasury Department and the IRS believe warrant inclusion in these temporary regulations. The Treasury Department and the IRS will accept comments and engage with interested stakeholders in connection with finalizing these temporary regulations.
In response to comments and after further consideration, these temporary regulations revise and further clarify the final regulations. To this end, these temporary regulations take into account helpful comments received and provide additional detail and certainty regarding the scope of obligations imposed under chapter 4. In addition, these temporary regulations reflect changes made to the final regulations to coordinate the chapter 4 regulations with the temporary regulations published under chapters 3 and 61 and section 3406 of the Code. Additionally, these temporary regulations contain modifications to the final regulations to further harmonize them with the IGAs. Several of the changes made by these temporary regulations were previewed in Notice 2013–69, the draft FFI agreement, and
The following sections provide a discussion of the additions and modifications made by the temporary regulations to the final regulations. To facilitate this discussion, the defined terms set forth in the temporary regulations are used throughout.
To address comments received and to provide further clarification, these temporary regulations modify certain definitions contained in the final regulations.
Comments requested an election providing NFFEs with the ability to report information about their substantial U.S. owners directly to the IRS rather than to withholding agents. In response to these comments and as previewed in Notice 2013–69, these temporary regulations provide certain NFFEs with elections to be treated as direct reporting NFFEs or sponsored direct reporting NFFEs. A NFFE that is treated as a direct reporting NFFE or sponsored direct reporting NFFE shall be treated as an excepted NFFE. Accordingly, definitions have been added for a direct reporting NFFE and a sponsored direct reporting NFFE, and the definition of a sponsoring entity has been modified. Conforming changes have also been made throughout these temporary regulations to implement these changes.
These temporary regulations modify the definition of excepted NFFE such that excepted NFFEs include, among other things, a direct reporting NFFE and a sponsored direct reporting NFFE. In addition, to correct an oversight, the definition of excepted NFFE under these temporary regulations is further expanded to include a NFFE that is a qualified intermediary (QI), withholding foreign partnership (WP) or withholding foreign trust (WT).
In response to comments stating that the definition of offshore obligation in the final regulations is unclear, and in order to harmonize chapters 4 and 61, these temporary regulations define offshore obligation by cross-reference to § 1.6049–5(c)(1) (which now uses the term
These temporary regulations make a clarifying change to the definition of pre-FATCA Form W–8. The final regulations define pre-FATCA Form W–8 as certain Forms W–8 that do not contain chapter 4 statuses. However, the chapter 4 status of a non-U.S. individual filing a Form W–8 is the same as his or her chapter 3 status. Therefore, the definition in the final regulations could be interpreted to mean that any Form W–8 previously submitted by a non-U.S. individual could not be treated as a pre-FATCA Form W–8. These temporary regulations modify the definition of pre-FATCA Form W–8 to avoid this result.
The final regulations define the term
The final regulations treat a foreign insurance company that is not licensed to do business in any State and makes an election under section 953(d) as a foreign person. Comments requested that a foreign insurance company that has made an election under section 953(d) be treated as a U.S. person. A foreign insurance company that has made an election under section 953(d) is required to report on its U.S. income tax return the U.S. persons that own a direct or indirect interest in it. As previewed in Notice 2013–69, and in light of the existing reporting requirements applicable to these entities, the temporary regulations modify the definition of U.S. person to include a foreign insurance company that has made an election under section 953(d) and that either is not a specified insurance company or is a specified insurance company that is licensed to do business in any State. In such cases, the foreign insurance company will be required to continue to report on its owners in accordance with its election under section 953(d). A foreign insurance company that has made an election under section 953(d) and that is a specified insurance company that is not licensed to do business in any State will continue to be treated as a foreign person for purposes of chapter 4.
In response to comments requesting clarification and in order to coordinate the definitions in the final regulations with the definitions in chapters 3 and 61 and the FFI agreement, these temporary regulations add definitions of backup withholding, branch, chapter 4 withholding rate pool, exempt recipient, IGA, non-exempt recipient, reportable payment, and reporting Model 2 FFI and modify the definition of a U.S. branch treated as a U.S. person. In addition, the definitions of financial institution, limited branch, limited FFI, and substantial U.S. owner are modified to ensure coordination between the FFI agreement and these temporary regulations.
These temporary regulations modify the definition of nonreporting IGA FFI to include (in addition to an FFI that is identified or treated as a nonreporting financial institution pursuant to a Model 1 or Model 2 IGA that is not a registered deemed-compliant FFI) an FFI that is a resident of, located in, or established in a Model 1 or Model 2 IGA jurisdiction, as the context requires, and that meets the requirements for certified deemed-compliant FFI status under the temporary regulations. Certain definitions (including the definition of retirement plan under § 1.1471–6(f)) are also modified to further harmonize these temporary regulations and the IGAs.
Comments indicated that outstanding life insurance contracts often contain a provision permitting the substitution of an insured and, as a result, cannot be a grandfathered obligation under the final regulations. Because such provisions are prevalent in existing life insurance contracts, the Treasury Department and the IRS have determined that life insurance contracts that have such a provision should be eligible for grandfathered status until the provision is invoked, but that any change or substitution of the insured under the contract should be treated as a material modification such that grandfathered status would no longer apply. These temporary regulations modify the final regulations accordingly.
The final regulations provide that a withholding agent is required to treat a modification of an obligation as material if the withholding agent knows or has reason to know that a material modification has occurred. The Treasury Department and the IRS received comments stating that it is difficult for a withholding agent to determine whether there has been a material modification of a grandfathered obligation absent a disclosure from the issuer of the obligation, and therefore that the receipt of such a disclosure should be the only instance in which a withholding agent is required to treat a modification of an obligation as material. In response to these comments, the temporary regulations modify the final regulations to provide that a withholding agent, other than the issuer of the obligation (or an agent of the issuer), is required to treat a modification of an obligation as material only if the withholding agent has actual knowledge that a material modification has occurred. One example of an event that will cause a withholding agent to have actual knowledge of a material modification is if the withholding agent receives a disclosure indicating that there has been or will be a material modification to the obligation.
Comments requested that, in cases in which a withholding agent makes a withholdable payment to a U.S. insurance broker that is acting as an intermediary for or agent of a foreign insurer, the withholding agent be allowed to treat the U.S. insurance broker as the payee unless the withholding agent has reason to know that the U.S. insurance broker will not satisfy its withholding obligations. These temporary regulations modify the final regulations to adopt this comment.
A payment made to a U.S. branch of a participating FFI or a registered deemed-compliant FFI may be treated as a payment made to a U.S. person if the branch is treated as a U.S. person for purposes of withholding under chapter 4. The final regulations inadvertently omit a cross-reference to the regulations containing the requirements of U.S. branches to report information regarding certain U.S. owners of owner-documented FFIs and passive NFFEs. These temporary regulations add a cross-reference to § 1.1474–1(i)(1) and (2).
In order to harmonize the rules in chapter 4 with those in chapters 3 and 61, these temporary regulations clarify that, with respect to a withholding agent's determination of whether a payment is made to a QI, WP, or WT, a Form W–8IMY, “Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding,” provided by such entity must contain the entity's QI–EIN, WP–EIN, or WT–EIN (as applicable). In addition, QIs, WPs, and WTs that have a GIIN must provide both a QI–EIN, QP–EIN, or WT–EIN and the GIIN to a withholding agent on the Form W–8IMY.
These temporary regulations clarify that, when a participating FFI or a registered deemed-compliant FFI has a branch (including a disregarded entity of the FFI) that both acts as an intermediary and is located outside of the FFI's country of residence, the GIIN of the branch (or disregarded entity) must be disclosed on the withholding certificate. This change provides more detail on the use of GIINs issued to branches or disregarded entities of an FFI and that are used, in part, to identify an FFI to withholding agents.
Comments requested additional clarification to the final regulations concerning the requirements of an FFI withholding statement, specifically with regard to the use of a chapter 4 withholding rate pool identified on an FFI withholding statement to allocate a withholdable payment (or portion of a withholdable payment) to persons included within the chapter 4 withholding rate pool. Some of these clarifications have already been previewed in the draft FFI agreement, published in Notice 2013–69, and the final FFI agreement, published in Rev. Proc. 2014–13. These temporary regulations provide further clarification of FFI withholding statement requirements, including rules on when a chapter 4 withholding rate pool may be used by an FFI to allocate withholdable payments to a class of persons within a particular type of chapter 4 withholding rate pool. For example, if a participating FFI (including a reporting Model 2 FFI) that is a non-U.S. payor receives a withholdable payment on behalf of an account holder of a U.S. account, the participating FFI may include the account holder in a chapter 4 withholding rate pool of U.S. payees provided on an FFI withholding statement to the withholding agent to allocate the payment (or portion thereof) to the U.S. payee pool when the participating FFI reports the account holder under § 1.1471–4(d)(3) (Form
Additionally, reporting Model 1 FFIs and reporting Model 2 FFIs (without regard to whether such FFIs are U.S. or non-U.S. payors) may include certain recalcitrant account holders in a chapter 4 withholding rate pool of U.S. payees when such payments are not subject to withholding under chapters 3 or 4 or to backup withholding under section 3406 (for example, presumed U.S. non-exempt recipients). This rule was added to provide coordination between the various reporting regimes. For example, a reporting Model 2 FFI may include an account holder of a non-consenting U.S. account in a chapter 4 withholding rate pool of U.S. payees with respect to a withholdable payment that is not subject to withholding under chapters 3 or 4 or to backup withholding under section 3406 when the FFI reports the account holder as described in § 1.1471–4(d)(6) for the year in which the payment is made.
Finally, in order to clarify potential ambiguities, and as previewed in the draft and final FFI agreement, these temporary regulations provide that an FFI withholding statement should indicate the portion of the payment allocated to a pool of recalcitrant account holders that hold dormant accounts for which the FFI (and not the withholding agent) will withhold in escrow under the procedures described in § 1.1471–4(b)(6). Additionally, a participating FFI that elects to apply backup withholding under § 1.1471–4(b)(3)(iii) to a withholdable payment that is also a reportable payment (as described under chapter 61) must also indicate the portion of the payment allocated to each recalcitrant account holder subject to backup withholding under section 3406 and report such payment to the IRS on Form 1099. A participating FFI will not be able to make the election to backup withhold under § 1.1471–4(b)(3)(iii) unless it is able to report on the payment and tax withheld consistent with the rules under chapter 61 and section 3406.
An intermediary providing a withholding certificate for a withholdable payment under chapter 4 may also need to provide information under chapter 3 or chapter 61 if those chapters also apply to the payment the intermediary receives. These temporary regulations modify the final regulations to coordinate with chapters 3 and 61 by providing cross-references to the regulations under those chapters to clarify the information required to be included on a withholding statement when a withholdable payment is also reportable under chapters 3 or 61.
Under chapter 4, withholding certificates are valid for three years, unless an exception permits indefinite validity (until a change in circumstances occurs). Beneficial owner withholding certificates provided by certain entities qualify for indefinite validity if the certificate is furnished with documentary evidence establishing the entity's foreign status. Comments requested that section 501(c) entities be excluded from the requirement to furnish documentary evidence of foreign status as it is an undue burden on such entities. The Treasury Department and the IRS agree that it is appropriate to exclude these entities from the requirement to furnish documentary evidence of foreign status. In response to these comments and to coordinate with the rules under chapter 3, these temporary regulations cross-reference the rules for indefinite validity of withholding certificates for section 501(c) entities in § 1.1441–1(e)(4)(ii)(B).
The final regulations provide that a withholding agent may accept withholding certificates, written statements, and documentary evidence supporting a payee's claim of chapter 4 status electronically if the agent is able to verify the identity of the sender as the person named on the form. Comments requested that the verification rules be modified or eliminated to reduce the burden on the withholding agent. The Treasury Department and the IRS agree with the comments, but have determined that the electronic transmission requirements under chapter 4 should match those to be revised under chapter 3 in consideration of these comments. Therefore, these temporary regulations modify the final regulations by cross-referencing the electronic submission rules in § 1.1441–1(e)(4)(iv)(C) which have been modified to adopt the change in a separate regulations package. These temporary regulations also make similar conforming changes to the final regulations with respect to requirements for an intermediary to electronically submit a withholding statement with a withholding certificate to a withholding agent.
In general, a withholding agent may substitute its own form for an official Form W–8 if the substitute form contains provisions that are substantially similar to the official form. The final regulations provide that if a substitute form is used in place of a W–8BEN for individuals, the form must contain, among other things, the individual's city and country of birth. The Treasury Department and the IRS received comments indicating that the inclusion of city of birth on this form would impose an undue burden on withholding agents. In response to comments, these temporary regulations remove the city of birth requirement. After further consideration, however, the temporary regulations require that the substitute form must contain the individual's date of birth, without regard to whether a foreign tax identification number is provided.
The Treasury Department and the IRS received comments requesting that, for preexisting accounts, a withholding agent be allowed to rely on documentation held at a branch of the withholding agent or a branch of another expanded affiliated group member even if the withholding agent does not treat the accounts as consolidated obligations. The comments
The final regulations generally allow the withholding agent to rely on a pre-FATCA Form W–8 for international organizations. In order to clarify a potential ambiguity and to conform with chapter 3, these temporary regulations provide that reliance on a pre-FATCA Form W–8 is limited to international organizations as defined under chapter 3 and under section 7701(a)(18).
Under chapter 4, a withholding agent must treat certain payees as U.S. persons. In order to clarify a potential ambiguity, these temporary regulations provide that foreign branches of U.S. persons and FFIs that have elected to be treated as U.S. persons under section 953(d) (despite the fact that such FFIs may not be U.S. persons for other purposes of chapter 4) should be treated as U.S. persons by a withholding agent if the withholding agent has a valid Form W–9, “
The final regulations provide that a withholding agent (other than a participating FFI or registered deemed-compliant FFI) that makes a payment with respect to a preexisting obligation may treat a payee as a U.S. person if it previously reviewed a Form W–9 or other documentation that established that the payee is a U.S. person and established that the payee is an exempt recipient for purposes of chapter 61. Comments from U.S. withholding agents indicated that the burden of documenting such payees that have previously been classified as U.S. persons is both significant and disproportionate to the benefits of obtaining documentation of U.S. status. In response to these comments, these temporary regulations modify the final regulations to allow withholding agents (other than a participating FFI or registered deemed-compliant FFI) to treat the payee of a payment with respect to a preexisting obligation as a U.S. person if the withholding agent has previously classified the payee as a U.S. person for purposes of chapters 3 or 61 and established (through documentation or the application of the rules in § 1.6049–4(c)(1)(ii)) that the payee is an exempt recipient for purposes of chapter 61.
The final regulations generally provide that a withholding agent may only treat a payee as a participating FFI or registered deemed-compliant FFI if the withholding agent receives an appropriate withholding certificate and a GIIN. The final regulations also provide a transitional rule for when withholding agents may treat payments made prior to January 1, 2017, with respect to a preexisting obligation, as made to a payee that is a participating FFI or registered deemed-compliant FFI. Under this rule the payee only needs to provide the withholding agent with its GIIN (which the withholding agent must verify) and indicate whether the FFI is a participating FFI or a registered deemed-compliant FFI. After further consideration and to coordinate with the rules under chapters 3 and 61, these temporary regulations modify the final regulations to provide that in such cases the payee must also have provided the withholding agent with a pre-FATCA Form W–8, as payees that receive U.S. source FDAP income would have already been required to provide a withholding certificate to a withholding agent. These temporary regulations further clarify the final regulations such that, when a participating FFI or a registered deemed-compliant FFI has a branch (including a disregarded entity of the FFI) that is located outside of the FFI's country of residence and receives the payment, the GIIN of the branch (or disregarded entity) must be disclosed on the withholding certificate.
These temporary regulations provide that direct reporting NFFEs and sponsored direct reporting NFFEs qualify as excepted NFFEs. Consistent with this change, these temporary regulations add to the final regulations identification rules with respect to direct reporting NFFEs and sponsored direct reporting NFFEs. Additionally, under the final regulations, a financial institution does not include certain foreign entities that are considered excepted inter-affiliate FFIs. One of the requirements for such an entity is that it does not receive payments from, or hold an account with, a withholding agent other than a member of its expanded affiliated group. Comments requested that such entities be permitted to hold bank accounts with certain non-U.S. persons outside of the expanded affiliated group. The temporary regulations modify the final regulations with respect to an excepted inter-affiliate FFI to allow such FFIs to hold depository accounts to pay for expenses in the country in which the FFI is operating and that are maintained within the same country. Accordingly, conforming changes have also been made by these temporary regulations to add identification rules with respect to an excepted inter-affiliate FFI. An identification rule was not necessary under the final regulations because an excepted inter-affiliate FFI was not allowed to hold an account with a withholding agent other than a member of its expanded affiliated group.
The final regulations provide that, under certain circumstances, a withholding agent has reason to know that a payee is not a financial institution. To clarify a potential ambiguity, these temporary regulations provide that a withholding agent has reason to know that a withholdable payment is being made to a limited branch of a participating or registered deemed-compliant FFI when it is directed to make payment to an address of the FFI in a jurisdiction other than the address of the participating FFI or registered deemed-compliant FFI (or branch of such FFI) that is identified as
Under chapter 4, a withholding agent may not rely on an FFI's claim of chapter 4 status if the withholding agent has reason to know that such claim is unreliable or incorrect. Under the final regulations, the withholding agent is required to review information used to satisfy AML due diligence requirements in determining whether a claim of chapter 4 status was unreliable or incorrect. In response to comments, these temporary regulations modify the final regulations such that when a withholding agent has classified a person by business type for AML due diligence or another regulatory purpose (other than for a tax purpose) that requires the withholding agent to periodically monitor or update the classification, the withholding agent will have reason to know that information contained in its account files conflicts with the person's claim of chapter 4 status only if the classification recorded by the withholding agent is inconsistent with the chapter 4 status claimed. Comments also requested additional time to review the information collected for AML due diligence because it is typically gathered and stored by a different department or division of the withholding agent and is not linked to the customers' account files. These temporary regulations adopt this comment and allow 30 days to review information collected for AML due diligence for new accounts.
The final regulations also provide due diligence requirements with respect to U.S. indicia of account holders for payments made with respect to preexisting obligations. After further consideration, the temporary regulations modify these provisions such that the U.S. indicia-based due diligence requirements generally do not apply to a withholding agent that has previously documented an account for purposes of chapter 3 or chapter 61. However, under the temporary regulations, a withholding agent that applies the limits on reason to know described in chapter 3 or chapter 61 must review for U.S. indicia any additional documentation upon which the withholding agent is relying to determine the chapter 4 status of the person. A cross-reference in § 1.1471–3(e)(4)(viii)(A)(
The Treasury Department and the IRS intend for the chapter 4 presumption rules for determining the status of a person as an individual or an entity and as U.S. or foreign to be identical to the presumption rules in chapters 3 and 61. To ensure coordination of these rules, these temporary regulations modify the final regulations by cross-referencing the presumption rules under chapter 3, rather than restating the rules in detail. This change ensures coordination between the presumption rules in chapter 3 and chapter 4 in the event that the chapter 3 presumption rules are modified.
As announced in Notice 2013–69, these temporary regulations modify the final regulations to coordinate withholding under chapter 4 and backup withholding under section 3406. Under § 1.1474–6(f), a participating FFI that makes a withholdable payment that is also a reportable payment to a recalcitrant account holder is not required to apply backup withholding under section 3406 if it withholds on the payment under chapter 4. A reportable payment that is not subject to withholding under chapter 4 remains subject to backup withholding under section 3406. Additionally, these temporary regulations provide under § 1.1471–4(b)(3)(iii) that a participating FFI may satisfy its chapter 4 withholding obligations for a withholdable payment that is a reportable payment made to a recalcitrant account holder that is a U.S. non-exempt recipient subject to backup withholding if the participating FFI elects for backup withholding under section 3406 to apply (rather than withholding under chapter 4 with regard to such payees). A participating FFI will not be able to make the election to backup withhold under § 1.1471–4(b)(3)(iii) unless it is able to report on the payment and tax withheld consistent with the rules under chapter 61 and section 3406.
With respect to dormant accounts of recalcitrant account holders, the final regulations permit a participating FFI to escrow amounts withheld under chapter 4 rather than deposit such amounts with the IRS. To coordinate with the chapter 3 and 61 regulations which would have required such amounts to be withheld upon, the temporary regulations limit this allowance to amounts not otherwise subject to withholding under chapter 3 or backup withholding under section 3406. In addition, a participating FFI may not delegate its responsibility to escrow the withheld tax to the withholding agent from which it receives the payment. These modifications are intended to harmonize the treatment of such escrowed amounts under chapters 3 and 4 and are consistent with the provisions of the FFI agreement.
The final regulations provide a cure for standing instructions to pay amounts to an account maintained in the United States for an account holder that differs from the cure provided under chapter 3. These temporary regulations modify the final regulations to provide an option to follow the chapter 3 rules by adding a cross-reference to § 1.1441–7(b)(12).
The final regulations provide that a participating FFI that has previously established an account holder's status as foreign in order to fulfill its reporting obligations as a U.S. payor under chapter 61 is not required to perform an electronic search or enhanced review. Comments requested that this exception be extended to the identification and documentation performed by an agent of a participating FFI that is a U.S. payor. To address these comments and to further coordinate between the IGAs and the regulations, these temporary regulations modify the final regulations to adopt this comment.
Section 1.1471–4(d)(2)(ii)(B) provides a special reporting rule for participating FFIs that maintain an account held by a territory financial institution acting as an intermediary. If such territory financial institution agrees to be treated as a U.S. person, the participating FFI is not required to report under § 1.1471–4 with respect to the account holders of the territory financial institution because such entities will report directly to the IRS. However, if the territory financial institution does not agree to be treated as a U.S. person, the final regulations require the participating FFI to report under § 1.1471–4 with respect to each account holder of the territory financial institution that receives a withholdable payment (or portion thereof) and that is a specified U.S. person or substantial U.S. owner of a foreign entity (indirect account holders). The final regulations are ambiguous about how a participating FFI could report on these indirect account holders. To provide more clarity with respect to the reporting requirements and to provide additional flexibility, the temporary regulations give participating FFIs the option of reporting on these indirect account holders on either Form 8966 or Form 1099. Additionally, these temporary regulations clarify the scope of information that must be reported by a participating FFI on Form 8966 or Form 1099 with respect to account holders of a territory financial institution that has not elected to be treated as a U.S. person.
The final regulations provide that a participating FFI may elect to comply with its obligation to report under § 1.1471–4(d)(3) or § 1.1471–4(d)(5) on a branch-by-branch basis. After further consideration, the temporary regulations provide that a participating FFI may report under § 1.1471–4(d)(3) or § 1.1471–4(d)(5) with respect to all of the participating FFI's U.S. accounts and recalcitrant accounts, or separately with respect to any clearly identified group of accounts (such as by line of business or the location of where the account is maintained). Consistent with the final regulations, a participating FFI must include the GIIN assigned to the participating FFI or its branch (including a disregarded entity of the FFI), as applicable, to identify the jurisdiction of the FFI or branch (or disregarded entity) that maintains the accounts subject to reporting.
The final regulations provide transitional reporting requirements for a participating FFI or registered deemed-compliant FFI making a payment of a foreign reportable amount to a nonparticipating FFI. Under § 1.1474–1(d)(4)(iii)(C) of the final regulations, a participating FFI is required to report the aggregate amount of foreign reportable amounts paid to each payee that is a nonparticipating FFI, even when such payments are not associated with a financial account. The final regulations define foreign reportable amount as a payment of FDAP income that would be a withholdable payment if paid by a U.S. person. Comments requested changes and clarification with respect to the transitional rule because it was unclear regarding the scope of payments subject to reporting and because of the cost of modifying systems to comply with this reporting rule. These temporary regulations continue to provide transitional reporting rules, but, consistent with Notice 2013–69, modify it to address these comments. First, the temporary regulations clarify that reporting will be required only with respect to nonparticipating FFIs that maintain an account with the participating FFI. Second, these temporary regulations modify the definition of foreign reportable amount to mean foreign source payments as described in § 1.1471–4(d)(4)(iv) paid to or with respect to each such account. Third, the temporary regulations provide that instead of reporting only foreign reportable amounts paid to such nonparticipating FFIs, a participating FFI may report all payments made with respect to the account (not only foreign reportable amounts). Fourth, the temporary regulations provide that, when a participating FFI is prohibited under domestic law from reporting on a specific payee basis without consent from the nonparticipating FFI and the participating FFI has been unable to obtain such consent, it may report the aggregate number of accounts held by all such non-consenting nonparticipating FFIs and the aggregate amount of foreign reportable amounts paid with respect to such accounts. These temporary regulations also modify the final regulations to provide that the information required under the transitional reporting rule will be provided on Form 8966, not Form 1042–S, “Foreign Person's U.S. Source Income Subject to Withholding,” and accordingly move the transitional rule to § 1.1471–4(d)(2)(ii)(F) and delete a residual paragraph in § 1.1474–1(d)(3)(iii) and renumber (d)(3)(iv) through (d)(3)(x). These changes were previously announced in Notice 2013–69 and are also included in the final FFI agreement. Finally, the temporary regulations require participating FFIs to retain account statements for accounts maintained for such nonparticipating FFIs.
The final regulations provide that a participating FFI that is a U.S. payor (other than a U.S. branch) is treated as satisfying its chapter 4 reporting obligations with respect to accounts that it is required to treat as U.S. accounts or accounts held by owner-documented FFIs if it reports the information required under chapter 61 and the information described under § 1.1471–4(d)(5)(ii) (requiring additional information on accounts held by specified U.S. persons, U.S. owned foreign entities that are NFFEs, and owner-documented FFIs). In response to comments, the temporary regulations modify the final regulations to allow a participating FFI that is a U.S. payor to satisfy its chapter 4 reporting obligations with respect to its U.S. accounts or accounts held by owner-documented FFIs either by reporting the information described in chapter 61 and § 1.1471–4(d)(5)(ii) or (iii) (the information reporting would be made on Form 1099 for U.S. accounts that are not U.S. owned NFFEs), as provided in the final regulations, or by reporting the information described in § 1.1471–4(d)(3)(ii), (d)(3)(iii) or (d)(3)(iv) (the information reporting would be made on Form 8966). A participating FFI that reports the information described in § 1.1471–4(d)(3)(ii), (d)(3)(iii) or (d)(3)(iv) and that is required to report payments under chapter 61 is not relieved of that obligation.
The final regulations do not include a rule for reporting by a U.S. branch of a registered deemed-compliant FFI or limited FFI that is not treated as a U.S. person. To correct this oversight, these temporary regulations add new § 1.1471–4(d)(2)(iii)(C) to provide that such a U.S. branch is treated as having satisfied its reporting requirements under chapter 4 if it reports the information required under chapter 61 with respect to account holders of accounts that the U.S. branch is required to treat as U.S. accounts or accounts held by owner-documented FFIs.
In response to comments, the temporary regulations modify the final regulations to provide an automatic 90-day extension of time in which to file Form 8966 with respect to recalcitrant account holders. An additional 90-day hardship extension may be provided in certain circumstances. These revisions are consistent with the extensions of time already permitted for filing Form 8966 with respect to U.S. accounts.
In response to comments and in order to address a potential ambiguity in the final regulations about whether a disregarded entity that is owned by an FFI is treated as a branch of an FFI, these temporary regulations clarify that the term branch with respect to an FFI includes an entity that is disregarded as an entity separate from the FFI. This clarification was previewed in the draft FFI agreement which was published in Notice 2013–69. These temporary regulations make additional changes throughout the final regulations to further clarify the treatment of a disregarded entity when such an entity is treated as a branch of an FFI. For example, the GIIN verification procedures that apply with respect to a branch of an FFI also apply with respect to a disregarded entity that is owned by an FFI. Additionally, a disregarded entity that is owned by an FFI may be treated as a limited branch if the disregarded entity is unable to comply with the terms of an FFI agreement with respect to accounts that it maintains, and the reason to know standards that apply to withholdable payments made to a branch of a participating or registered deemed-compliant FFI also apply to withholdable payments made to a disregarded entity that is owned by such an FFI.
The final regulations require that, in general, each FFI within an expanded affiliated group must be either a participating FFI or a registered deemed-compliant FFI. Comments noted that some FFIs within an expanded affiliated group will have the status of an exempt beneficial owner and requested that the regulations be modified to allow for such FFIs to be excluded from this requirement. The temporary regulations modify the final regulations to adopt this comment.
The final regulations allow the IRS to request additional information in its review of Form 8966. The temporary regulations further allow the IRS to request additional information to determine an FFI's compliance with the applicable FFI agreement and to assist the IRS with its review of account holder compliance with tax reporting requirements.
The final regulations define events of default under an FFI agreement. This definition includes the failure to significantly reduce, over a period of time, the number of recalcitrant account holders and payees that are nonparticipating FFIs. Comments were made that this language was ambiguous and could imply an event of default, for example, even in circumstances in which an FFI consistently complies with the regulatory due diligence procedures. Accordingly, in response to the comments, these temporary regulations modify the final regulations to provide that this event of default consists of a failure to significantly reduce, over a period of time, the number of account holders or payees that the participating FFI is required to treat as recalcitrant account holders or nonparticipating FFIs as a result of the participating FFI failing to comply with the due diligence procedures for the identification and documentation of account holders and payees.
The definition of account holder in the final regulations does not treat a grantor trust as an account holder to the extent that the grantor is treated as owning the trust or all the assets in the trust under sections 671 through 679, regardless of whether the grantor is a U.S. or foreign person. If such grantor is a foreign person and the beneficiary of the trust is a U.S. person, the grantor is treated as the account holder and consequently, the account is a non-U.S. account and no beneficiary that is a specified U.S. person is treated as having an interest in the portion of the trust owned by the grantor. Therefore, the specified U.S. person is not an account holder and would not be reported even though such U.S. person might be a substantial U.S. owner of the foreign grantor trust. Further, for purposes of determining whether a foreign grantor trust has a substantial U.S. owner (and is a U.S. account), the final regulations provide that a substantial U.S. owner is any specified U.S. person treated as owning any portion of the grantor trust under sections 671 through 679, and a trust owned only by U.S. grantors is not treated as having a beneficiary that is a specified U.S. person. Thus, in contrast to the account holder rule, the test for determining a substantial U.S. owner of a trust is made without regard to the treatment of the settlor of the trust as a foreign grantor under sections 671 through 679. In response to requests for further clarification, these temporary regulations remove the grantor trust rule in the definition of account holder in the final regulations so that the general rule for treating an entity as an account holder will apply to treat a grantor trust as the account holder. Accordingly, a grantor trust that holds an account must provide documentation of its chapter 4 status as a FFI or NFFE. This change harmonizes the treatment of a grantor trust as an account holder for purposes of the chapter 4 withholding provisions with the provisions in chapters 3 and 61, which treat a grantor trust, rather than the grantor, as the payee.
While financial accounts generally include equity or debt interests (other than regularly traded interests) in investment entities, financial accounts include only certain enumerated categories of interests in holding companies, treasury centers, and other
Comments have suggested that these provisions are overbroad because it is questionable whether the value of, or return earned on, a debt or equity interest is determined primarily by reference to assets of a U.S. person solely because the debt or equity interest is secured by such assets. In response to these comments, these temporary regulations modify the final regulations by eliminating the secured equity or debt provisions. The facts and circumstances may nonetheless lead to a conclusion that the value of a secured equity or debt interest is determined, directly or indirectly, primarily by reference to assets giving rise to withholdable payments (for example, when the amount payable as interest on, or upon redemption or retirement of, a debt interest is determined primarily by reference to the assets securing the debt interest).
In addition, the final regulations provide that a debt interest is considered to have a value determined, directly or indirectly, primarily by reference to assets that give rise to withholdable payments if amounts payable as interest on, or upon redemption or retirement of, the debt are determined primarily by reference to the profits or assets of a U.S. person. This provision inadvertently did not address whether debt interests with amounts payable by reference to equity interests in a U.S. person are debt interests whose return or value is determined primarily by reference to assets that give rise (or could give rise) to withholdable payments. To correct this omission, the temporary regulations modify the final regulations to include a reference to equity interests in, as well as profits and assets of, a U.S. person.
The final regulations provide that the definition of financial institution includes a holding company or treasury center that is part of an expanded affiliated group that includes a depository institution, custodial institution, insurance company, or investment entity. Comments noted that the definition, with respect to an insurance company, should be limited to a specified insurance company which is itself a financial institution. These temporary regulations correct the final regulations to treat a holding company or treasury center as a financial institution if it is part of an expanded affiliated group that includes a specified insurance company.
The final regulations provide that an entity is a custodial institution if at least 20 percent of the entity's gross income is attributable to holding financial assets for others and related financial services. The final regulations define income attributable to holding financial assets to include, among other things, fees for providing financial advice. As a result, an entity could qualify as a custodial institution under the final regulations even if the entity's sole business is to provide financial advice to clients and it does not conduct any activities as a custodian or broker. Comments indicated that this definition is overly broad and could cause entities that do not hold financial assets and therefore have no financial accounts to be treated as custodial institutions. In response, these temporary regulations modify the final regulations to define income attributable to holding financial assets to include fees for providing financial advice with respect to financial assets held in (or to be held in) custody by the entity.
The final regulations generally provide that an investment entity includes an entity whose gross income is primarily attributable to investing, reinvesting, or trading in financial assets and that is managed by another entity that primarily conducts as a business certain investment-related activities. Examples 7 and 8 in § 1.1471–5(e)(4)(v) are clarified such that a foreign introducing broker does not manage an entity if it does not have discretionary authority to manage its clients' assets. However, even though these facts have been added to Examples 7 and 8, the results in Examples 7 and 8 remain the same. In Example 7, even when the introducing broker has discretionary authority to act unilaterally on its client's behalf with respect to its client's investments, because the introducing broker is an individual, the entity that she manages would not be treated as an investment entity under § 1.1471–5(e)(4)(i)(B). By comparison, because the introducing broker in Example 8 is an entity that primarily conducts as a business certain investment related activities, the entity managed by the introducing broker would be treated as an investment entity under § 1.1471–5(e)(4)(i)(B).
The final regulations provide that a holding company, treasury center, or captive finance company will not qualify as an excepted nonfinancial group entity if, among other things, it is formed in connection with or availed of certain arrangements or investment vehicles. Comments requested additional guidance on what it means to be “formed in connection with or availed of.” The temporary regulations modify the final regulations such that any entity that existed at least six months prior to its acquisition by an arrangement or investment vehicle and which, prior to the acquisition, regularly conducted activities in the ordinary course of business will not be considered to be formed in connection with or availed of such an arrangement or investment vehicle, in the absence of other facts suggesting the existence of an investment strategy.
For purposes of determining whether an expanded affiliated group is a nonfinancial group, the final regulations provide an income test for the three-year period preceding the year for which the determination is made. Comments requested: (i) That this exclusion also be applicable if the expanded affiliated group has been in existence for less than three years and (ii) that a group would qualify if it meets the income test over an average of three years (rather than having to meet the test in each of the
In order to provide further clarification when determining the percentage of income or assets of the group that produce or are held for the production of passive income, these temporary regulations also modify the final regulations by excluding transactions between members of the expanded affiliated group. In addition, these temporary regulations provide guidance on measuring the value of such assets.
Comments requested that, for purposes of determining if a holding company is part of an excepted nonfinancial group, a trust or partnership that owns all the stock of a common parent corporation of an expanded affiliated group be eligible for treatment as a holding company and member of an excepted nonfinancial group. Otherwise, such entities are not treated as part of the expanded affiliated group and cannot qualify for such exception. These temporary regulations modify the final regulations to allow a partnership or other non-corporate entity to be treated as a holding company (and therefore as a potential member of an excepted nonfinancial group) if substantially all the activities of such partnership (or other entity) consist of holding more than 50 percent of the voting power and value of the stock of one or more common parent corporation(s) of one or more expanded affiliated group(s). If a partnership or other non-corporate entity owns more than 50 percent of the voting power and value of the stock of two or more corporations and each such corporation has its own subsidiaries such that it is the common parent corporation of an expanded affiliated group, each common parent corporation's expanded affiliated group will be treated as a separate such group for purposes of applying the rules of this section unless the non-corporate entity is treated as the common parent entity of the entire expanded affiliated group in accordance with § 1.1471–5(i)(10).
Comments were received that the definition of a treasury center in the final regulations is too narrow in that an entity that manages working capital but does not otherwise invest or trade may not satisfy this definition. For example, a group's cash pooling entity may be in a net deficit position and therefore may not be considered to be investing or trading in financial assets. In addition, with respect to the financing activities of such a vehicle, the final regulations could be read to limit situations in which an entity that is itself equity funded can qualify as a treasury center. In response to these comments, the temporary regulations modify the final regulations to clarify that an entity that manages the working capital of an expanded affiliated group (or any member thereof) will not cease to qualify as a treasury center solely because it has no investments and does not trade in financial assets. Further, the temporary regulations clarify that equity-funded affiliates may qualify as treasury centers.
Under the final regulations, a financial institution does not include certain foreign entities that are considered excepted inter-affiliate FFIs. One of the requirements for such an entity is that it does not receive payments from, or hold an account with, a withholding agent other than a member of its expanded affiliated group. Comments requested that such entities be permitted to hold bank accounts with certain non-U.S. persons outside of the expanded affiliated group. The temporary regulations modify the final regulations to allow such entities to hold depository accounts maintained in the country in which the entity is operating to pay for expenses in that same country.
Under chapter 4, interests in a restricted fund that are not issued directly by the fund can only be sold through distributors that are participating FFIs, registered deemed-compliant FFIs, nonregistering local banks, or restricted distributors. In response to comments, even though these temporary regulations do not eliminate the requirement of the restricted fund to terminate its agreement with any distributor that has a change in status that causes it to no longer qualify to be a distributor and redeem or transfer all debt and equity interests of the FFI issued through that distributor, these temporary regulations do remove the requirement that the restricted fund certify to the IRS.
Comments were received that an FFI that issues credit cards may form a separate entity that services the credit cards. Under the final regulations, such an entity could be an FFI, but would not be treated as a registered deemed-compliant FFI because it is not an issuer of credit cards, even though such FFI would otherwise qualify for registered deemed-compliant FFI status. Pursuant to these comments, the temporary regulations expand the registered deemed-compliant FFI category to include qualified credit card servicers.
Under the final regulations, an FFI remains liable for its withholding and reporting obligations under chapter 4 even if a sponsoring entity performs these responsibilities on behalf of such FFI. In response to comments, these temporary regulations modify the final regulations to clarify that a sponsoring entity will not be jointly and severally liable for the sponsored FFI's obligations unless the sponsoring entity is also a withholding agent that is separately liable for such obligations.
The final regulations provide that, in order to be treated as a nonregistering local bank, an FFI's business must consist primarily of receiving deposits from and making loans to unrelated retail customers. Comments noted that the final regulations do not provide a definition of unrelated for this and other purposes. In addition, it may be unclear how the final regulations would apply to a member-owner of a credit union or similar cooperative credit organization. In order to address these concerns, and consistent with the IGAs, these temporary regulations modify the final regulations such that a credit union or similar cooperative credit organization will be eligible for treatment as a nonregistering local bank if its business consists primarily of receiving deposits from and making loans to members, provided that no such member has a greater than five percent interest in such credit union or cooperative credit organization. For purposes of
Comments were received stating that most securitization investment vehicles could not meet the requirements in the final regulations for a limited life debt investment entity (LLDIE) to be treated as certified deemed-compliant FFIs. To accommodate industry practices and expand the types of securitization vehicles that will qualify as a LLDIE, these temporary regulations make a number of significant changes to the definition of LLDIE in the final regulations. These changes include: (i) Removing the requirement that a LLDIE's organizational documents cannot be amended without the consent of all of its investors; (ii) clarifying that a LLDIE issues debt or equity interests under a trust indenture or similar agreement; (iii) extending the category so that it applies to a LLDIE that issued all of its interests on or before January 17, 2013 (for example, the date that the final regulations were filed); (iv) allowing a LLDIE to be treated as a certified deemed-compliant FFI until the LLDIE liquidates or terminates; (v) removing the requirement that investors be unrelated to each other; and (vi) expanding the types of assets that the entity can hold and still qualify as a LLDIE.
In response to comments, and to coordinate with the IGAs, these temporary regulations add certain investment advisors and investment managers that do not maintain financial accounts as entities eligible for treatment as certified deemed-compliant FFIs. Accordingly, these temporary regulations also add identification rules with respect to such investment advisors and investment managers.
Certain provisions in the final regulations (such as §§ 1.1471–3(c)(9)(ii)(B); 1.1471–5(f)(2)(i)(B); 1,1471–5(f)(4)(i); and 1.1471–5(i)(6)(i)) use the term
Comments requested that a LLDIE not be considered a member of an expanded affiliated group as a result of any member of such expanded affiliated group owning interests in such entity. These comments indicated that because interests in these entities are generally held through a clearing organization, these entities often would not be able to determine the identity of their investors. In addition, comments noted the burden of monitoring ownership changes for the purpose of determining when to include or exclude a LLDIE as a member of an expanded affiliated group, and the potential adverse consequences to the rest of the group in the event that any such entity is not properly included. Comments also stated that the definition of expanded affiliated group in the final regulations presents challenges with respect to non-corporate entities that are within a chain of commonly controlled corporations. For example, the final regulations do not clearly indicate whether constructive ownership rules apply to determine whether a non-corporate entity is controlled by a member of the group. In response to these comments, these temporary regulations modify the definition of expanded affiliated group to exclude from the group pre-existing LLDIEs (for example, a LLDIE that issued all of its interests, and was in existence, on or before January 17, 2013) and clarify the ownership rules applicable to corporate and non-corporate members of the group. These temporary regulations also permit (but do not require) a non-corporate entity to be treated as the common parent entity of the expanded affiliated group.
Comments were received stating that the functions of a foreign central bank of issue may be performed by an institution other than a bank. In response to these comments and in order to coordinate the regulations with the IGAs, these temporary regulations modify the final regulations to include an institution performing such functions within the definition of a foreign central bank of issue. In addition, comments stated that a foreign central bank of issue may earn income from cash as well as securities. Accordingly, the temporary regulations allow a foreign central bank of issue to be a beneficial owner with respect to income earned on cash.
Comments also stated that some foreign central banks maintain depository accounts solely for their employees. These comments requested that such employee-only accounts not be treated as accounts held in connection with commercial activities. The Treasury Department and the IRS believe there is a low risk of tax evasion with respect to such employee accounts, and that the burden on central banks to register as an FFI for these activities and provide documentation as intermediaries would be disproportionately high. Therefore, the temporary regulations modify the final regulations to exclude maintaining such accounts from the definition of commercial activities.
Comments noted that fiscal year financial statements may not be used in determining whether an entity is an active NFFE. These comments noted that preparing calendar year financial statements for entities using non-calendar fiscal years would cause significant burdens without commensurate benefits. Therefore, these comments suggested that an entity be able to use either its calendar or fiscal year in analyzing whether the entity meets the active NFFE test. Comments further suggested that an entity be allowed to use financial statements based on foreign accounting principles. These comments have been adopted and these temporary regulations modify the final regulations accordingly.
After further consideration, these temporary regulations provide that QIs, WPs, and WTs are treated as excepted NFFEs.
These temporary regulations provide that excepted NFFE includes a NFFE that is a direct reporting NFFE or sponsored direct reporting NFFE. A direct reporting NFFE is a NFFE that elects to report on Form 8966 directly to the IRS certain information about its
In addition, these temporary regulations modify the final regulations such that an entity may act as a sponsor for one or more direct reporting NFFEs. A sponsoring entity will report on Form 8966 directly to the IRS (on the sponsored direct reporting NFFE's behalf) information about each sponsored direct reporting NFFE's direct or indirect substantial U.S. owners. These changes were previously announced in Notice 2013–69 and were made in response to comments.
Under the final regulations, income that is otherwise described as U.S. source FDAP income does not include interest accrued on the date of a sale or exchange of an interest bearing debt obligation if the sale occurs between two interest payment dates. In order to harmonize this rule with the rules in chapter 3, these temporary regulations provide that this type of interest is not excluded from U.S. source FDAP income or gross proceeds if the sale or exchange is part of a plan described in the anti-abuse rule under § 1.1441–3(b)(2)(ii).
The final regulations provide an exclusion from the definition of withholdable payments for certain non-intermediated offshore payments of U.S. source FDAP income prior to 2017. The Treasury Department and the IRS intended to provide that the exclusion does not apply to debt or equity issued by a U.S. person in order to prevent U.S. persons from exploiting this exception by issuing debt or equity interests through a foreign branch. To clarify the issue, these temporary regulations modify the final regulations such that the exclusion does not apply to payments made with respect to debt or equity issued by a U.S. person (excluding a deposit account maintained by a foreign branch of a U.S. financial institution).
Comments indicated that because the defined term
Because the final regulations treat insurance brokers as intermediaries, the transitional rule for offshore payments of U.S. source FDAP income under the final regulations does not apply to insurance and reinsurance premiums paid to foreign insurance companies by non-U.S. insurance brokers. Comments were received stating that the transitional rule should apply to such premiums, because it applies to insurance premiums paid directly by the insured. These temporary regulations provide a transitional rule such that, for purposes of the exception for offshore payments, an intermediary does not include a person acting as an insurance broker with respect to premiums.
Comments requested relief from withholding on payments made by a secured party with respect to collateral securing one or more transactions under a collateral arrangement between the secured party and the counterparty. Comments indicated that general industry practice is to commingle collateral from all counterparties in a single account held by the secured party and that this practice does not permit the identification of collateral to a particular counterparty. As a result, a secured party is currently unable to determine whether it is acting as an intermediary or a principal with respect to some or all of the payments made to the counterparty based upon the secured party's right under a collateral arrangement to sell or loan the collateral to a third party. To allow the industry time to develop the systems necessary to make this determination, these temporary regulations add a transitional rule so that withholding on such payments will begin on January 1, 2017, provided that only a commercially reasonable amount of collateral is held by the secured party as part of the collateral arrangement.
The final regulations define a substantial U.S. owner to include a specified U.S. person that owns, directly or indirectly, more than 10 percent of a foreign corporation, partnership, or trust. Ownership is determined by aggregating interests held by related persons, applying certain provisions of the regulations under section 267 to determine whether such persons are related. These temporary regulations clarify that a person must have direct or indirect ownership in the entity before the aggregation rules apply, such that a substantial U.S. owner does not include an individual with no ownership interest other than an interest attributed to him from a related person.
The final regulations provide a general statement that a withholding agent needs to file a Form 1042–S to report a chapter 4 reportable amount,
The final regulations also provide that a recipient copy of the Form 1042–S may include more than one type of income, which would thus display information differently than the copy filed with the IRS. For refund purposes, it is important for the IRS to match the recipient copy of the Form 1042–S to the copy filed with the IRS. As previewed in the draft Form 1042–S instructions released on November 1, 2013, and to coordinate with the regulations under chapter 3, these temporary regulations remove the allowance for withholding agents to include more than one type of income or other payment on the copy of the Form 1042–S furnished to the recipient.
However, to allow sufficient time for withholding agents to adapt to this change to the final regulations, a withholding agent will be permitted to include more than one type of income or other payment on the recipient copy of the Form 1042–S for calendar year 2014. Starting with calendar year 2015, the Form 1042–S and accompanying instructions will require a separate Form 1042–S for each type of income or other payment.
For Form 1042–S reporting, the final regulations provide that an excepted NFFE that is not acting as an agent or intermediary with respect to the payment is the recipient of the payment in question. However, if such entity is a flow-through entity, it is not treated as a recipient on the Form 1042–S for chapter 3 purposes. In order to have a consistent definition of recipient for chapters 3 and 4 reporting purposes (because reporting for both chapters is performed on a single Form 1042–S), these temporary regulations modify the final regulations by providing that an excepted or passive NFFE that is a flow-through entity is not treated as a recipient. Also, the final regulations have been modified to remove the provision indicating that a participating FFI or registered deemed-compliant FFI is not a recipient when it fails to provide information to the withholding agent regarding its reporting pools, which is reflected on Form 1042–S. These temporary regulations further remove the references to a participating FFI, registered deemed-compliant FFI, and U.S. branch that is not treated as a U.S. person from the definition of persons that are not recipients.
These temporary regulations make a correction to the definition of the term
Consistent with changes made by these temporary regulations to clarify the chapter 4 withholding rate pools, the final regulations are modified to clarify that a withholding agent that receives an FFI withholding statement from a participating FFI or registered deemed-compliant FFI [must report with respect to each such pool identified on the FFI withholding statement] on a separate Form 1042–S issued to the participating FFI, registered deemed-compliant FFI, or QI (as applicable) as the recipient with respect to each such pool identified on an FFI withholding statement.
These temporary regulations add a coordination rule for instances in which a participating FFI withholds under chapter 4 on a payment made to a recalcitrant account holder that is a U.S. non-exempt recipient, and such payment is also a reportable amount subject to backup withholding. The rule is applicable to cases in which the participating FFI does not elect to withhold on the payment under section 3406.
Regulations describing the verification requirements of sponsoring entities will be proposed and issued separately from these temporary regulations. Under the proposed regulations, a sponsoring entity will be required to make two separate compliance certifications: one on behalf of its sponsored FFI or sponsored direct reporting NFFE with respect to the sponsored FFI's compliance with the requirements of an FFI agreement or the sponsored direct reporting NFFE's election to be treated as a direct reporting NFFE (as applicable), and a second certification on the sponsoring entity's own behalf with respect to its compliance with the requirements of its status as a sponsoring entity. In addition, the verification requirements in the proposed regulations will allow the IRS to request additional information from a sponsoring entity, such as regarding the information reported on the forms filed with the IRS with respect to a sponsored FFI or sponsored direct reporting NFFE in order to review such entities' compliance with the requirements for maintaining their status as a sponsored FFI or sponsored direct reporting NFFE, and to assist the IRS with its review of account holder or substantial U.S. owner compliance with tax reporting requirements.
Several changes made by these temporary regulations are not reflected in and may be inconsistent with certain provisions in the FFI agreement. As a result, the Treasury Department and the IRS intend to publish a revenue procedure revising the FFI agreement to conform to these regulations. For instance, the rules regarding an optional escrow by a participating FFI of tax withheld on withholdable payments to dormant accounts held by recalcitrant account holders are modified in these temporary regulations. The FFI agreement will be revised to reflect that the tax withheld in escrow becomes due 90 days after the date that the account ceases to be a dormant account, rather than the date that is the earlier of 90 days or the end of the calendar year following the date that the account ceases to be a dormant account.
In addition, cross references to the temporary regulations under chapters 3, 4, and 61 will be updated to reflect changes to the numbering of various sections of those temporary regulations after the date of publication of the revenue procedure containing the FFI agreement. For example, cross references in the FFI agreement to terms defined in the chapter 4 temporary regulations will be modified to reflect the addition of the term reporting Model 2 FFI and the renumbering of subsequent sections in § 1.1471–1(b). In addition, an incorrect citation to § 1.6049–4(b)(6) will be removed.
The FFI agreement will also be revised to reflect a change to the reporting requirements by participating FFIs that elect to backup withhold under section 3406 rather than to withhold under chapter 4 on a withholdable payment that is a
It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13653. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. Chapter 5) does not apply to these regulations.
The collection of information in these temporary regulations is contained in a number of provisions including §§ 1.1471–3, 1.1471–4, 1.1472–1, 1.1474–1, and 1.1474–6. In addition, these temporary regulations amend a number of collections of information set out in TD 9610. The IRS intends that the information collection requirements of these temporary regulations will be satisfied by filing Forms 8957, 8966, the W–8 series of forms, W–9, 1042, 1042–S, the 1099 series of forms, as well as income tax returns (for example, Forms 1040 and 1120F) and Form 843 relating to refunds. As a result, for purposes of the Paperwork Reduction Act (44 U.S.C. 3507), the reporting burden associated with the collection of information in these temporary regulations will be reflected in the information collection burden and OMB control number of the appropriate IRS form.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.
Books and records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 104–4, requires that an agency prepare a costs and benefits analysis and a budgetary impact statement before promulgating a rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 205 of the Unfunded Mandates Reform Act requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. The Treasury Department and the IRS have determined that there is no federal mandate imposed by this rulemaking that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year.
For the applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6), please refer to the Special Analyses section of the preamble to the cross-referenced notice of proposed rulemaking published in the Proposed Rules section in this issue of the
The principal authors of these regulations are Tara Ferris, Nancy Lee, Michael Kaercher, and Kamela Nelan of the Office of Associate Chief Counsel (International). However, other personnel from the IRS and the Treasury Department participated in the development of these regulations.
Income taxes, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 1 is amended as follows:
26 U.S.C. 7805 * * *
Section 1.1471–1 is also issued under 26 U.S.C. 1471.
Section 1.1471–2 is also issued under 26 U.S.C. 1471.
Section 1.1471–3 is also issued under 26 U.S.C. 1471.
Section 1.1471–4 is also issued under 26 U.S.C. 1471.
Section 1.1471–5 is also issued under 26 U.S.C. 1471.
Section 1.1471–6 is also issued under 26 U.S.C. 1471.
Section 1.1472–1 is also issued under 26 U.S.C. 1472.
Section 1.1471–3 is also issued under 26 U.S.C. 1473.
Section 1.1474–1 is also issued under 26 U.S.C. 1474.
Section 1.1474–6 is also issued under 26 U.S.C. 1474.
The revisions and additions read as follows:
(b) * * *
(7) [Reserved]. For further guidance, see § 1.1471–1T(b)(7).
(10) [Reserved]. For further guidance, see § 1.1471–1T(b)(10).
(20) [Reserved]. For further guidance, see § 1.1471–1T(b)(20).
(23) [Reserved]. For further guidance, see § 1.1471–1T(b)(23).
(31) [Reserved]. For further guidance, see § 1.1471–1T(b)(31).
(35) [Reserved]. For further guidance, see § 1.1471–1T(b)(35).
(41) [Reserved]. For further guidance, see § 1.1471–1T(b)(41).
(43) [Reserved]. For further guidance, see § 1.1471–1T(b)(43).
(48) [Reserved]. For further guidance, see § 1.1471–1T(b)(48).
(50) [Reserved]. For further guidance, see § 1.1471–1T(b)(50).
(67) [Reserved]. For further guidance, see § 1.1471–1T(b)(67).
(76) [Reserved]. For further guidance, see § 1.1471–1T(b)(76).
(77) [Reserved]. For further guidance, see § 1.1471–1T(b)(77).
(81) [Reserved]. For further guidance, see § 1.1471–1T(b)(81).
(83) [Reserved]. For further guidance, see § 1.1471–1T(b)(83).
(88) [Reserved]. For further guidance, see § 1.1471–1T(b)(88).
(91) [Reserved]. For further guidance, see § 1.1471–1T(b)(91).
(98) [Reserved]. For further guidance, see § 1.1471–1T(b)(98).
(100) [Reserved]. For further guidance, see § 1.1471–1T(b)(100).
(104) * * *
(i) [Reserved]. For further guidance, see § 1.1471–1T(b)(104)(i).
(ii) * * *
(A) [Reserved]. For further guidance, see § 1.1471–1T(b)(104)(ii)(A).
(B) [Reserved]. For further guidance, see § 1.1471–1T(b)(104)(ii)(B).
(C) [Reserved]. For further guidance, see § 1.1471–1T(b)(104)(ii)(C).
(105) [Reserved]. For further guidance, see § 1.1471–1T(b)(105).
(113) [Reserved]. For further guidance, see § 1.1471–1T(b)(113).
(115) [Reserved]. For further guidance, see § 1.1471–1T(b)(115).
(123) [Reserved]. For further guidance, see § 1.1471–1T(b)(123).
(124) [Reserved]. For further guidance, see § 1.1471–1T(b)(124).
(125) [Reserved]. For further guidance, see § 1.1471–1T(b)(125).
(128) [Reserved]. For further guidance, see § 1.1471–1T(b)(128).
(135) [Reserved]. For further guidance, see § 1.1471–1T(b)(135).
(141) [Reserved]. For further guidance, see § 1.1471–1T(b)(141).
(a) [Reserved]. For further guidance, see § 1.1471–1(a).
(b) [Reserved]. For further guidance, see § 1.1471–1(b).
(1) through (6) [Reserved]. For further guidance, see § 1.1471–1(b)(1) through (6).
(7)
(8) [Reserved]. For further guidance, see § 1.1471–1(b)(8).
(9) [Reserved]. For further guidance, see § 1.1471–1(b)(9).
(10)
(11) through (19) [Reserved]. For further guidance, see § 1.1471–1(b)(11) through (19).
(20)
(21) through (22) [Reserved]. For further guidance, see § 1.1471–1(b)(21) through (22).
(23)
(24) through (30) [Reserved]. For further guidance, see § 1.1471–1(b)(24) through (30).
(31)
(32) through (34) [Reserved]. For further guidance, see § 1.1471–1(b)(32) through (34).
(35)
(36) through (40) [Reserved]. For further guidance, see § 1.1471–1(b)(36) through (40).
(41)
(42) [Reserved]. For further guidance, see § 1.1471–1(b)(42).
(43)
(44) through (47) [Reserved]. For further guidance, see § 1.1471–1(b)(44) through (47).
(48)
(49) [Reserved]. For further guidance, see § 1.1471–1(b)(49).
(50)
(51) through (66) [Reserved]. For further guidance, see § 1.1471–1(b)(51) through (66).
(67)
(68) through (75) [Reserved]. For further guidance, see § 1.1471–1(b)(68) through (75).
(76)
(77)
(78) through (80) [Reserved]. For further guidance, see § 1.1471–1(b)(78) through (80).
(81)
(82) [Reserved]. For further guidance, see § 1.1471–1(b)(82).
(83)
(84) through (87) [Reserved]. For further guidance, see § 1.1471–1(b)(84) through (87).
(88)
(89) through (90) [Reserved]. For further guidance, see § 1.1471–1(b)(89) through (90).
(91)
(92) through (97) [Reserved]. For further guidance, see § 1.1471–1(b)(92) through (97).
(98)
(99) [Reserved]. For further guidance, see § 1.1471–1(b)(99).
(100)
(101) through (103) [Reserved]. For further guidance, see § 1.1471–1(b)(101) through (103).
(104) [Reserved]. For further guidance, see § 1.1471–1(b)(104).
(i) The term
(ii) [Reserved]. For further guidance, see § 1.1471–1(b)(104)(ii).
(A) The account holder or payee also holds with the withholding agent (or a member of the withholding agent's expanded affiliated group or sponsored FFI group) an account, instrument, contract, or equity interest that is a preexisting obligation under paragraph (b)(104)(i) of this section;
(B) The withholding agent (and, as applicable, the member of the withholding agent's expanded affiliated group or sponsored FFI group) treats both of the aforementioned obligations, and any other obligations of the payee or account holder that are treated as preexisting obligations under this paragraph (b)(104)(ii), as consolidated obligations; and
(C) With respect to an obligation that is subject to AML due diligence, the withholding agent is permitted to satisfy such AML due diligence for the obligation by relying upon the AML due diligence performed for the preexisting obligation described in paragraph (b)(104)(i) of this section.
(105)
(106) through (112) [Reserved]. For further guidance, see § 1.1471–1(b)(106) through (112).
(113)
(114) [Reserved]. For further guidance, see § 1.1471–1(b)(114).
(115)
(116) through (122) [Reserved]. For further guidance, see § 1.1471–1(b)(116) through (122).
(123)
(124)
(125)
(126) through (127) [Reserved]. For further guidance, see § 1.1471–1(b)(126) through (127).
(128)
(129) through (134) [Reserved]. For further guidance, see § 1.1471–1(b)(129) through (134).
(135)
(136) through (140) [Reserved]. For further guidance, see § 1.1471–1(b)(136) through (140).
(141)
(ii) The term
(142) through (151) [Reserved]. For further guidance, see § 1.1471–1(b)(142) through (151).
(c) [Reserved]. For further guidance, see § 1.1471–1(c).
(d)
The revisions read as follows:
(a) * * *
(1) [Reserved]. For further guidance, see § 1.1471–2T(a)(1).
(2) * * *
(i) [Reserved]. For further guidance, see § 1.1471–2T(a)(2)(i).
(ii) [Reserved]. For further guidance, see § 1.1471–2T(a)(2)(ii).
(iii) * * *
(A) [Reserved]. For further guidance, see § 1.1471–2T(a)(2)(iii)(A).
(v) [Reserved]. For further guidance, see § 1.1471–2T(a)(2)(v).
(4) * * *
(ii) [Reserved]. For further guidance, see § 1.1471–2T(a)(4)(ii).
(A) [Reserved]. For further guidance, see § 1.1471–2T(a)(4)(ii)(A).
(B) [Reserved]. For further guidance, see § 1.1471–2T(a)(4)(ii)(B).
(b) * * *
(2) * * *
(i) * * *
(A) * * *
(
(ii) * * *
(A) * * *
(
(B) * * *
(
(iv) [Reserved]. For further guidance, see § 1.1471–2T(b)(2)(iv).
(4) * * *
(ii) [Reserved]. For further guidance, see § 1.1471–2T(b)(4)(ii).
(a) [Reserved]. For further guidance, see § 1.1471–2(a).
(1)
(2) [Reserved]. For further guidance, see § 1.1471–2(a)(2).
(i)
(ii)
(iii) [Reserved]. For further guidance, see § 1.1471–2(a)(2)(iii).
(A)
(
(B) [Reserved]. For further guidance, see § 1.1471–2(a)(2)(iii)(B).
(iv) [Reserved]. For further guidance, see § 1.1471–2(a)(2)(iv).
(v)
(vi) [Reserved]. For further guidance, see § 1.1471–2(a)(2)(vi).
(3) [Reserved]. For further guidance, see § 1.1471–2(a)(3).
(4) [Reserved]. For further guidance, see § 1.1471–2(a)(4).
(i) through (i)(B) [Reserved]. For further guidance, see § 1.1471–2(a)(4)(i) through (a)(4)(i)(B).
(ii)
(A)
(B)
(
(iii) through (viii) [Reserved]. For further guidance, see § 1.1471–2(a)(4)(iii) through (viii).
(5) through (5)(ii) [Reserved]. For further guidance, see § 1.1471–2(a)(5) through (a)(5)(ii).
(b) [Reserved]. For further guidance, see § 1.1471–2(b).
(1) [Reserved]. For further guidance, see § 1.1471–2(b)(1).
(2) [Reserved]. For further guidance, see § 1.1471–2(b)(2).
(i) [Reserved]. For further guidance, see § 1.1471–2(b)(2)(i).
(A) [Reserved]. For further guidance, see § 1.1471–2(b)(2)(i)(A).
(
(
(B) [Reserved]. For further guidance, see § 1.1471–2(b)(2)(i)(B).
(ii) [Reserved]. For further guidance, see § 1.1471–2(b)(2)(ii).
(A) [Reserved]. For further guidance, see § 1.1471–2(b)(2)(ii)(A).
(
(
(
(B) [Reserved]. For further guidance, see § 1.1471–2(b)(2)(ii)(B).
(
(
(
(iii) [Reserved]. For further guidance, see § 1.1471–2(b)(2)(iii).
(iv)
(3) through (3)(iii) [Reserved]. For further guidance, see § 1.1471–2(b)(3) through (b)(3)(iii).
(4) [Reserved]. For further guidance, see § 1.1471–2(b)(4).
(i) [Reserved]. For further guidance, see § 1.1471–2(b)(4)(i).
(ii)
(iii) [Reserved]. For further guidance, see § 1.1471–2(b)(4)(iii).
(c) [Reserved]. For further guidance, see § 1.1471–2(c).
(d)
The additions and revisions read as follows:
(a) * * *
(3) * * *
(iii) [Reserved]. For further guidance, see § 1.1471–3T(a)(3)(iii).
(v) [Reserved]. For further guidance, see § 1.1471–3T(a)(3)(v).
(vi) [Reserved]. For further guidance, see § 1.1471–3T(a)(3)(vi).
(b) * * *
(3) [Reserved]. For further guidance, see § 1.1471–3T(b)(3).
(c) * * *
(3) * * *
(ii) * * *
(C) [Reserved]. For further guidance, see § 1.1471–3T(c)(3)(ii)(C).
(D) [Reserved]. For further guidance, see § 1.1471–3T(c)(3)(ii)(D).
(iii) * * *
(A) [Reserved]. For further guidance, see § 1.1471–3T(c)(3)(iii)(A).
(
(B) * * *
(
(
(
(
(
(
(
(5) * * *
(ii) * * *
(B) [Reserved]. For further guidance, see § 1.1471–3T(c)(5)(ii)(B).
(6) * * *
(ii) * * *
(B) * * *
(
(
(
(
(C) * * *
(
(
(
(E) * * *
(
(iv) [Reserved]. For further guidance, see § 1.1471–3T(c)(6)(iv).
(v) * * *
(A) [Reserved]. For further guidance, see § 1.1471–3T(c)(6)(v)(A).
(B) [Reserved]. For further guidance, see § 1.1471–3T(c)(6)(v)(B).
(8) * * *
(v) [Reserved]. For further guidance, see § 1.1471–3T(c)(8)(v).
(9) * * *
(ii) * * *
(B) [Reserved]. For further guidance, see § 1.1471–3T(c)(9)(ii)(B).
(v) [Reserved]. For further guidance, see § 1.1471–3T(c)(9)(v).
(d) * * *
(1) [Reserved]. For further guidance, see § 1.1471–3T(d)(1).
(2) * * *
(i) [Reserved]. For further guidance, see § 1.1471–3T(d)(2)(i).
(iii) [Reserved]. For further guidance, see § 1.1471–3T(d)(2)(iii).
(4) * * *
(i) [Reserved]. For further guidance, see § 1.1471–3T(d)(4)(i).
(ii) [Reserved]. For further guidance, see § 1.1471–3T(d)(4)(ii).
(iii) [Reserved]. For further guidance, see § 1.1471–3T(d)(4)(iii).
(A) * * *
(
(iv) * * *
(A) [Reserved]. For further guidance, see § 1.1471–3T(d)(4)(iv)(A).
(C) [Reserved]. For further guidance, see § 1.1471–3T(d)(4)(iv)(C).
(D) [Reserved]. For further guidance, see § 1.1471–3T(d)(4)(iv)(D).
(v) [Reserved]. For further guidance, see § 1.1471–3T(d)(4)(v).
(5) * * *
(i) [Reserved]. For further guidance, see § 1.1471–3T(d)(5)(i).
(ii) [Reserved]. For further guidance, see § 1.1471–3T(d)(5)(ii) through (d)(5)(ii)(B).
(A) [Reserved]. For further guidance, see § 1.1471–3T(d)(5)(ii)(A).
(B) [Reserved]. For further guidance, see § 1.1471–3T(d)(5)(ii)(B).
(iii) [Reserved]. For further guidance, see § 1.1471–3T(d)(5)(iii) through (d)(5)(iii)(B).
(6) * * *
(vii) * * *
(A) * * *
(
(11) * * *
(viii) * * *
(A) [Reserved]. For further guidance, see § 1.1471–3T(d)(11)(viii)(A).
(C) [Reserved]. For further guidance, see § 1.1471–3T(d)(11)(viii)(C).
(x) [Reserved]. For further guidance, see § 1.1471–3T(d)(11)(x).
(xi) [Reserved]. For further guidance, see § 1.1471–3T(d)(11)(xi).
(xii) [Reserved]. For further guidance, see § 1.1471–3T(d)(11)(xii) through (d)(11)(xii)(C).
(12) * * *
(iii) * * *
(A) [Reserved]. For further guidance, see § 1.1471–3T(d)(12)(iii)(A).
(B) [Reserved]. For further guidance, see § 1.1471–3T(d)(12)(iii)(B).
(e) * * *
(2) [Reserved]. For further guidance, see § 1.1471–3T(e)(2).
(3) [Reserved]. For further guidance, see § 1.1471–3T(e)(3).
(i) [Reserved]. For further guidance, see § 1.1471–3T(e)(3)(i).
(ii) [Reserved]. For further guidance, see § 1.1471–3T(e)(3)(ii).
(iii) [Reserved]. For further guidance, see § 1.1471–3T(e)(3)(iii).
(iv) [Reserved]. For further guidance, see § 1.1471–3T(e)(3)(iv).
(4) [Reserved]. For further guidance, see § 1.1471–3T(e)(4).
(i) [Reserved]. For further guidance, see § 1.1471–3T(e)(4)(i).
(ii) [Reserved]. For further guidance, see § 1.1471–3T(e)(4)(ii) through (e)(4)(ii)(B.
(A) [Reserved]. For further guidance, see § 1.1471–3T(e)(4)(ii)(A).
(B) [Reserved]. For further guidance, see § 1.1471–3T(e)(4)(ii)(B).
(iii) [Reserved]. For further guidance, see § 1.1471–3T(e)(4)(iii).
(iv) [Reserved]. For further guidance, see § 1.1471–3T(e)(4)(iv through (e)(4)(iv)(B)(
(v) [Reserved]. For further guidance, see § 1.1471–3T(e)(4)(v).
(B) * * *
(
(
(vi) * * *
(B) [Reserved]. For further guidance, see § 1.1471–3T(e)(4)(vi)(B).
(vii) * * *
(B) [Reserved]. For further guidance, see § 1.1471–3T(e)(4)(vii)(B).
(viii) * * *
(A) * * *
(
(f) * * *
(1) [Reserved]. For further guidance, see § 1.1471–3T(f)(1).
(2) [Reserved]. For further guidance, see § 1.1471–3T(f)(2).
(3) [Reserved]. For further guidance, see § 1.1471–3T(f)(3).
(4) [Reserved]. For further guidance, see § 1.1471–3T(f)(4).
(5) [Reserved]. For further guidance, see § 1.1471–3T(f)(5).
(6) [Reserved]. For further guidance, see § 1.1471–3T(f)(6).
(7) [Reserved]. For further guidance, see § 1.1471–3T(f)(7) through (f)(7)(ii).
(i) [Reserved]. For further guidance, see § 1.1471–3T(f)(7)(i).
(ii) [Reserved]. For further guidance, see § 1.1471–3T(f)(7)(ii).
(8) [Reserved]. For further guidance, see § 1.1471–3T(f)(8).
(9) [Reserved]. For further guidance, see § 1.1471–3T(f)(9) through (f)(9)(ii).
(a) [Reserved]. For further guidance, see § 1.1471–3(a).
(1) through (2) [Reserved]. For further guidance, see § 1.1471–3(a)(1) through (2).
(3) [Reserved]. For further guidance, see § 1.1471–3(a)(3).
(i) through (ii)(B) [Reserved]. For further guidance, see § 1.1471–3(a)(3)(i) through (a)(3)(ii)(B).
(iii)
(iv) [Reserved]. For further guidance, see § 1.1471–3(a)(3)(iv).
(v)
(vi)
(vii) [Reserved]. For further guidance, see § 1.1471–3(a)(3)(vii).
(b) [Reserved]. For further guidance, see § 1.1471–3(b).
(1) through (2) [Reserved]. For further guidance, see § 1.1471–3(b)(1) through (2).
(3)
(4) [Reserved]. For further guidance, see § 1.1471–3(b)(4).
(c) [Reserved]. For further guidance, see § 1.1471–3(c).
(1) through (2)(ii) [Reserved]. For further guidance, see § 1.1471–3(c)(1) through (c)(2)(ii).
(3) [Reserved]. For further guidance, see § 1.1471–3(c)(3).
(i) [Reserved]. For further guidance, see § 1.1471–3(c)(3)(i).
(ii) [Reserved]. For further guidance, see § 1.1471–3(c)(3)(ii).
(A) through (B) [Reserved]. For further guidance, see § 1.1471–3(c)(3)(ii)(A) through (B).
(C) The person's entity classification for U.S. tax purposes;
(D) The person's chapter 4 status; and
(E) [Reserved]. For further guidance, see § 1.1471–3(c)(3)(ii)(E).
(iii) [Reserved]. For further guidance, see § 1.1471–3(c)(3)(iii).
(A)
(
(
(
(B) [Reserved]. For further guidance, see § 1.1471–3(c)(3)(iii)(B).
(
(
(
(
(
(
(
(C) through (H) [Reserved]. For further guidance, see § 1.1471–3(c)(3)(iii)(C) through (H).
(iv) through (v) [Reserved]. For further guidance, see § 1.1471–3(c)(3)(iv) through (v).
(4) [Reserved]. For further guidance, see § 1.1471–3(c)(4).
(5) [Reserved]. For further guidance, see § 1.1471–3(c)(5).
(i) [Reserved]. For further guidance, see § 1.1471–3(c)(5)(i) through (c)(5)(i)(E).
(ii) [Reserved]. For further guidance, see § 1.1471–3(c)(5)(ii).
(A) [Reserved]. For further guidance, see § 1.1471–3(c)(5)(ii)(A).
(B)
(C) [Reserved]. For further guidance, see § 1.1471–3(c)(5)(ii)(C).
(6) [Reserved]. For further guidance, see § 1.1471–3(c)(6).
(i) [Reserved]. For further guidance, see § 1.1471–3(c)(6)(i).
(ii) [Reserved]. For further guidance, see § 1.1471–3(c)(6)(ii).
(A) [Reserved]. For further guidance, see § 1.1471–3(c)(6)(ii)(A).
(B) [Reserved]. For further guidance, see § 1.1471–3(c)(6)(ii)(B).
(
(
(
(
(
(
(C) [Reserved]. For further guidance, see § 1.1471–3(c)(6)(ii)(C).
(
(
(
(
(D) [Reserved]. For further guidance, see § 1.1471–3(c)(6)(ii)(D).
(E) [Reserved]. For further guidance, see § 1.1471–3(c)(6)(ii)(E).
(
(
(iii) through (iii)(B) [Reserved]. For further guidance, see § 1.1471–3(c)(6)(iii) through (c)(6)(iii)(B).
(iv)
(v) [Reserved]. For further guidance, see § 1.1471–3(c)(6)(v).
(A)
(B)
(vi) through (vii) [Reserved]. For further guidance, see § 1.1471–3(c)(6)(vi) through (vii).
(7) through (7)(ii) [Reserved]. For further guidance, see § 1.1471–3(c)(7) through (c)(7)(ii).
(8) [Reserved]. For further guidance, see § 1.1471–3(c)(8).
(i) through (iv) [Reserved]. For further guidance, see § 1.1471–3(c)(8)(i) through (iv).
(v)
(9) [Reserved]. For further guidance, see § 1.1471–3(c)(9).
(i) [Reserved]. For further guidance, see § 1.1471–3(c)(9)(i).
(ii) [Reserved]. For further guidance, see § 1.1471–3(c)(9)(ii).
(A) [Reserved]. For further guidance, see § 1.1471–3(c)(9)(ii)(A).
(B) The third-party data provider must be in the business of providing credit reports or business reports to customers unrelated to it and must have reviewed all information it has for the entity and verified that such additional information does not conflict with the chapter 4 status claimed by the entity. For purposes of this paragraph (c)(9)(ii)(B), a customer is related to a third-party data provider if they have a relationship with each other that is described in section 267(b).
(C) through (F) [Reserved]. For further guidance, see § 1.1471–3(c)(9)(ii)(C) through (F).
(iii) through (iv)(D) [Reserved]. For further guidance, see § 1.1471–3(c)(9)(iii) through (c)(9)(iv)(D).
(v)
(d) [Reserved]. For further guidance, see § 1.1471–3(d).
(1)
(2) [Reserved]. For further guidance, see § 1.1471–3(d)(2).
(i)
(ii) [Reserved]. For further guidance, see § 1.1471–3(d)(2)(ii).
(iii)
(3) through (3)(ii) [Reserved]. For further guidance, see § 1.1471–3(d)(3) through (d)(3)(ii).
(4) [Reserved]. For further guidance, see § 1.1471–3(d)(4).
(i)
(ii)
(iii)
(A) [Reserved]. For further guidance, see § 1.1471–3(d)(4)(iii)(A).
(
(
(B) [Reserved]. For further guidance, see § 1.1471–3(d)(4)(iii)(B).
(iv) [Reserved]. For further guidance, see § 1.1471–3(d)(4)(iv).
(A) For payments made prior to January 1, 2015, a withholding agent may treat a payee that is an FFI or branch of an FFI (including an entity that is disregarded as an entity separate from the FFI) as a reporting Model 1 FFI if it receives a withholding certificate from the payee indicating that the payee is a reporting Model 1 FFI and the country in which the payee is a reporting Model 1 FFI, regardless of whether the certificate contains a GIIN for the payee.
(B) [Reserved]. For further guidance, see § 1.1471–3(d)(4)(iv)(B).
(C) For payments made prior to January 1, 2015, with respect to an offshore obligation, a withholding agent may treat a payee as a reporting Model 1 FFI if the payee informs the withholding agent that the payee is a reporting Model 1 FFI and provides the country in which the payee is a reporting Model 1 FFI. In the case of a payment of U.S. source FDAP income, such payee must also provide a written statement that it is the beneficial owner and documentary evidence supporting the payee's claim of foreign status (as
(D) For payments made on or after January 1, 2015, that do not constitute U.S. source FDAP income, the withholding agent may continue to treat a payee as a reporting Model 1 FFI if the payee provides the withholding agent with its GIIN, either orally or in writing, and the withholding agent verifies the GIIN in the manner described in paragraph (e)(3) of this section.
(v)
(5) [Reserved]. For further guidance, see § 1.1471–3(d)(5).
(i)
(ii)
(B)
(iii)
(A)
(6) [Reserved]. For further guidance, see § 1.1471–3(d)(6).
(i) through (vi) [Reserved]. For further guidance, see § 1.1471–3(d)(6)(i) through (vi).
(vii) [Reserved]. For further guidance, see § 1.1471–3(d)(6)(vii).
(A) [Reserved]. For further guidance, see § 1.1471–3(d)(6)(vii)(A).
(
(
(B) [Reserved]. For further guidance, see § 1.1471–3(d)(6)(vii)(B).
(7) through (10)(iii) [Reserved]. For further guidance, see § 1.1471–3(d)(7) through (d)(10)(iii).
(11) [Reserved]. For further guidance, see § 1.1471–3(d)(11).
(i) through (vii)(B)(
(viii) [Reserved]. For further guidance, see § 1.1471–3(d)(11)(viii).
(A)
(
(B) through (B)(
(C)
(ix) through (ix)(C) [Reserved]. For further guidance, see § 1.1471–3(d)(11)(ix) through (d)(11)(ix)(C).
(x)
(B)
(
(
(
(C)
(xi)
(B)
(
(
(xii)
(A)
(B)
(C)
(12) [Reserved]. For further guidance, see § 1.1471–3(d)(12).
(i) through (ii) [Reserved]. For further guidance, see § 1.1471–3(d)(12)(i) through (ii).
(iii) [Reserved]. For further guidance, see § 1.1471–3(d)(12)(iii).
(A)
(B)
(e) [Reserved]. For further guidance, see § 1.1471–3(e).
(1) [Reserved]. For further guidance, see § 1.1471–3(e)(1).
(2)
(3)
(i)
(ii)
(iii)
(iv)
(B)
(4)
(i)
(ii)
(A)
(B)
(iii)
(iv)
(A)
(B)
(
(v)
(A) through (A)(
(B) [Reserved]. For further guidance, see § 1.1471–3(e)(4)(v)(B).
(
(
(
(vi) [Reserved]. For further guidance, see § 1.1471–3(e)(4)(vi).
(A) through (A)(
(B)
(vii) [Reserved]. For further guidance, see § 1.1471–3(e)(4)(vii).
(A) [Reserved]. For further guidance, see § 1.1471–3(e)(4)(vii)(A).
(B)
(viii) [Reserved]. For further guidance, see § 1.1471–3(e)(4)(viii).
(A) [Reserved]. For further guidance, see § 1.1471–3(e)(4)(viii)(A).
(
(
(B) through (D) [Reserved]. For further guidance, see § 1.1471–3(e)(4)(viii)(B) through (D).
(5) through (6) [Reserved]. For further guidance, see § 1.1471–3(e)(5) through (6).
(f) [Reserved]. For further guidance, see § 1.1471–3(f).
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(ii)
(8)
(9)
(ii)
(g) [Reserved]. For further guidance, see § 1.1471–3(g).
(h)
The additions and revisions read as follows:
(a) * * *
(3) [Reserved]. For further guidance, see § 1.1471–4T(a)(3).
(b) * * *
(1) [Reserved]. For further guidance, see § 1.1471–4T(b)(1).
(2) [Reserved]. For further guidance, see § 1.1471–4T(b)(2).
(3) [Reserved]. For further guidance, see § 1.1471–4T(b)(3).
(i) [Reserved]. For further guidance, see § 1.1471–4T(b)(3)(i).
(ii) [Reserved]. For further guidance, see § 1.1471–4T(b)(3)(ii).
(iii) [Reserved]. For further guidance, see § 1.1471–4T(b)(3)(iii).
(6) [Reserved]. For further guidance, see § 1.1471–4T(b)(6).
(c) * * *
(5) * * *
(iv) * * *
(B) * * *
(
(
(E) [Reserved]. For further guidance, see § 1.1471–4T(c)(5)(iv)(E).
(d) * * *
(1) [Reserved]. For further guidance, see § 1.1471–4T(d)(1).
(2) * * *
(i) [Reserved]. For further guidance, see § 1.1471–4T(d)(2)(i).
(ii) * * *
(A) [Reserved]. For further guidance, see § 1.1471–4T(d)(2)(ii)(A).
(B) * * *
(
(E) [Reserved]. For further guidance, see § 1.1471–4T(d)(2)(ii)(E).
(F) [Reserved]. For further guidance, see § 1.1471–4T(d)(2)(ii)(F).
(iii) * * *
(A) [Reserved]. For further guidance, see § 1.1471–4T(d)(2)(iii)(A).
(B) [Reserved]. For further guidance, see § 1.1471–4T(d)(2)(iii)(B).
(C) [Reserved]. For further guidance, see § 1.1471–4T(d)(2)(iii)(C).
(3) * * *
(ii) * * *
(E) [Reserved]. For further guidance, see § 1.1471–4T(d)(3)(ii)(E).
(iii) * * *
(F) [Reserved]. For further guidance, see § 1.1471–4T(d)(3)(iii)(F).
(5) * * *
(v) [Reserved]. For further guidance, see § 1.1471–4T(d)(5)(v).
(vi) [Reserved]. For further guidance, see § 1.1471–4T(d)(5)(vi).
(6) * * *
(vii) [Reserved]. For further guidance, see § 1.1471–4T(d)(6)(vi).
(7) [Reserved]. For further guidance, see § 1.1471–4T(d)(7).
(i) [Reserved]. For further guidance, see § 1.1471–4T(d)(7)(i).
(ii) * * *
(A) [Reserved]. For further guidance, see § 1.1471–4T(d)(7)(ii)(A).
(iii) [Reserved]. For further guidance, see § 1.1471–4T(d)(7)(iii).
(iv) * * *
(A) [Reserved]. For further guidance, see § 1.1471–4T(d)(7)(iv)(A).
(B) [Reserved]. For further guidance, see § 1.1471–4T(d)(7)(iv)(B).
(8) [Reserved]. For further guidance, see § 1.1471–4T(d)(8).
(9) * * *
(e) * * *
(1) [Reserved]. For further guidance, see § 1.1471–4T(e)(1).
(2) * * *
(ii) [Reserved]. For further guidance, see § 1.1471–4T(e)(2)(ii).
(f) * * *
(4) * * *
(i) [Reserved]. For further guidance, see § 1.1471–4T(f)(4)(i).
(ii)
(g) * * *
(1) [Reserved]. For further guidance, see § 1.1471–4T(g)(1).
(ii) [Reserved]. For further guidance, see § 1.1471–4T(g)(1)(ii).
(2) [Reserved]. For further guidance, see § 1.1471–4T(g)(2).
(a) [Reserved]. For further guidance, see § 1.1471–4(a).
(1) through (2) [Reserved]. For further guidance, see § 1.1471–4(a)(1) through (2).
(3)
(4) through (7) [Reserved]. For further guidance, see § 1.1471–4(a)(4) through (7).
(b) [Reserved]. For further guidance, see § 1.1471–4(b).
(1)
(2)
(3)
(i)
(ii)
(iii)
(4) through (5)(ii) [Reserved]. For further guidance, see § 1.1471–4(b)(4) through (b)(5)(ii).
(6)
(7) [Reserved]. For further guidance, see § 1.1471–4(b)(7).
(c) [Reserved]. For further guidance, see § 1.1471–4(c).
(1) through (4)(iii)(B) [Reserved]. For further guidance, see § 1.1471–4(c)(1) through (c)(4)(iii)(B).
(5) [Reserved]. For further guidance, see § 1.1471–4(c)(5).
(i) through (iii)(C) [Reserved]. For further guidance, see § 1.1471–4(c)(5)(i) through (c)(5)(iii)(C).
(iv) [Reserved]. For further guidance, see § 1.1471–4(c)(5)(iv).
(A) [Reserved]. For further guidance, see § 1.1471–4(c)(5)(iv)(A).
(B) [Reserved]. For further guidance, see § 1.1471–4(c)(5)(iv)(B).
(
(
(
(
(
(C) through (D)(
(E) Exception for preexisting individual accounts previously documented as held by foreign individuals. A participating FFI that has previously obtained documentation from an account holder to establish the account holder's status as a foreign individual in order to meet its obligations under its QI, WP, or WT agreement with the IRS, or to fulfill its reporting obligations as a U.S. payor under chapter 61, is not required to perform the electronic search described in paragraph (c)(5)(iv)(C) of this section or the enhanced review described in paragraph (c)(5)(iv)(D)(
(6) through (7) [Reserved]. For further guidance, see § 1.1471–4(c)(6) through (7).
(d) [Reserved]. For further guidance, see § 1.1471–4(d).
(1)
(2) [Reserved]. For further guidance, see § 1.1471–4(d)(2).
(i)
(ii) [Reserved]. For further guidance, see § 1.1471–4(d)(2)(ii).
(A)
(B) [Reserved]. For further guidance, see § 1.1471–4(d)(2)(ii)(B).
(
(
(
(
(C) through (D) [Reserved]. For further guidance, see § 1.1471–4(d)(2)(ii)(C) through (D).
(E)
(F)
(iii) [Reserved]. For further guidance, see § 1.1471–4(d)(2)(iii).
(A)
(
(
(B)
(
(C)
(3) [Reserved]. For further guidance, see § 1.1471–4(d)(3).
(i) [Reserved]. For further guidance, see § 1.1471–4(d)(3)(i).
(ii) [Reserved]. For further guidance, see § 1.1471–4(d)(3)(ii).
(A) through (D) [Reserved]. For further guidance, see § 1.1471–4(d)(3)(ii)(A) through (D).
(E) Such other information as is otherwise required to be reported under this paragraph (d)(3) or in the form described in paragraph (d)(3)(v) of this section and its accompanying instructions.
(iii) [Reserved]. For further guidance, see § 1.1471–4(d)(3)(iii).
(A) through (E) [Reserved]. For further guidance, see § 1.1471–4(d)(3)(iii)(A) through (E).
(F) Such other information as is otherwise required to be reported under this paragraph (d)(3) or in the form described in paragraph (d)(3)(v) of this section and its accompanying instructions.
(iv) through (iv)(F) [Reserved]. For further guidance, see § 1.1471–4(d)(3)(iv) through (d)(3)(iv)(F).
(v) [Reserved]. For further guidance, see § 1.1471–4(d)(3)(v).
(vi) [Reserved]. For further guidance, see § 1.1471–4(d)(3)(vi).
(vii) [Reserved]. For further guidance, see § 1.1471–4(d)(3)(vii).
(4) through (4)(v) [Reserved]. For further guidance, see § 1.1471–4(d)(4) through (d)(4)(v).
(5) [Reserved]. For further guidance, see § 1.1471–4(d)(5).
(i) through (iv) [Reserved]. For further guidance, see § 1.1471–4(d)(5)(i) through (d)(5)(iv).
(v)
(vi)
(vii) [Reserved]. For further guidance, see § 1.1471–4(d)(5)(vii).
(6) [Reserved]. For further guidance, see § 1.1471–4(d)(6).
(i) through (v) [Reserved]. For further guidance, see § 1.1471–4(d)(6)(i) through (v).
(vi)
(vii) [Reserved]. For further guidance, see § 1.1471–4(d)(6)(vii).
(7)
(i)
(ii) [Reserved]. For further guidance, see § 1.1471–4(d)(7)(ii).
(A)
(
(B) [Reserved]. For further guidance, see § 1.1471–4(d)(7)(ii)(B).
(
(iii)
(iv) [Reserved]. For further guidance, see § 1.1471–4(d)(7)(iv).
(A)
(B)
(8)
(9) [Reserved]. For further guidance, see § 1.1471–4(d)(9).
[Reserved]. For further guidance, see § 1.1471–4(d)(9),
[Reserved]. For further guidance, see § 1.1471–4(d)(9),
[Reserved]. For further guidance, see § 1.1471–4(d)(9),
[Reserved]. For further guidance, see § 1.1471–4(d)(9),
(e) [Reserved]. For further guidance, see § 1.1471–4(e).
(1)
(2) [Reserved]. For further guidance, see § 1.1471–4(e)(2).
(i) [Reserved]. For further guidance, see § 1.1471–4(e)(2)(i).
(A) through (C) [Reserved]. For further guidance, see § 1.1471–4(e)(2)(i)(A) through (C).
(ii)
(iii) through (v) [Reserved]. For further guidance, see § 1.1471–4(e)(2)(iii) through (v).
(3) through (4) [Reserved]. For further guidance, see § 1.1471–4(e)(3) through (4).
(f) [Reserved]. For further guidance, see § 1.1471–4(f).
(1) through (3)(iv)(C) [Reserved]. For further guidance, see § 1.1471–4(f)(1) through (f)(3)(iv)(C).
(4) [Reserved]. For further guidance, see § 1.1471–4(f)(4).
(i)
(ii)
(g) [Reserved]. For further guidance, see § 1.1471–4(g).
(1)
(i) [Reserved]. For further guidance, see § 1.1471–4(g)(1)(i).
(ii) Failure to significantly reduce, over a period of time, the number of account holders or payees that the participating FFI is required to treat as recalcitrant account holders or nonparticipating FFIs, as a result of the participating FFI failing to comply with the due diligence procedures for the identification and documentation of account holders and payees, as set forth in paragraph (c) of this section;
(iii) through (ix) [Reserved]. For further guidance, see § 1.1471–4(g)(1)(iii) through (ix).
(2)
(3) [Reserved]. For further guidance, see § 1.1471–4(g)(3).
(h) through (j) [Reserved]. For further guidance, see § 1.1471–4(h) through (j).
(k)
The additions and revisions read as follows:
(a) * * *
(3) * * *
(i) [Reserved]. For further guidance, see § 1.1471–5T(a)(3)(i).
(4) * * *
(i) [Reserved]. For further guidance, see § 1.1471–5T(a)(4)(i).
(b) * * *
(1) * * *
(iii) * * *
(B) * * *
(
(3) * * *
(iv) [Reserved]. For further guidance, see § 1.1471–5T(b)(3)(iv).
(v) * * *
(A) [Reserved]. For further guidance, see § 1.1471–5T(b)(3)(v)(A).
(B) * * *
(
(
(vi) [Reserved]. For further guidance, see § 1.1471–5T(b)(3)(vi) through (b)(3)(vi)(B)(
(c) [Reserved]. For further guidance, see § 1.1471–5T(c).
(e) * * *
(1) * * *
(v) * * *
(A) [Reserved]. For further guidance, see § 1.1471–5T(e)(1)(v)(A).
(3) * * *
(ii) [Reserved]. For further guidance, see § 1.1471–5T(e)(3)(ii).
(4) * * *
(v) * * *
[Reserved]. For further guidance, see § 1.1471–5T(e)(4)(v),
[Reserved]. For further guidance, see § 1.1471–5T(e)(4)(v),
(5) * * *
(i) * * *
(A) * * *
(
(B) [Reserved]. For further guidance, see § 1.1471–5T(e)(5)(i)(B).
(
(C) [Reserved]. For further guidance, see § 1.1471–5T(e)(5)(i)(C).
(D) * * *
(
(
(
(iv) * * *
(B) [Reserved]. For further guidance, see § 1.1471–5T(e)(5)(iv)(B).
(f) * * *
(1) * * *
(i) * * *
(A) * * *
(
(B) * * *
(
(
(C) * * *
(
(D) * * *
(
(
(
(
(E) [Reserved]. For further guidance, see § 1.1471–5T(f)(1)(i)(E). through (f)(1)(i)(E)(
(F) * * *
(
(
(
(
(
(
(
(ii) * * *
(B) [Reserved]. For further guidance, see § 1.1471–5T(f)(1)(ii)(B).
(2) [Reserved]. For further guidance, see § 1.1471–5T(f)(2).
(i) * * *
(B) [Reserved]. For further guidance, see § 1.1471–5T(f)(2)(i)(B).
(iii) [Reserved]. For further guidance, see § 1.1471–5T(f)(2)(iii) through (f)(2)(iii)(E).
(iv) [Reserved]. For further guidance, see § 1.1471–5T(f)(2)(iv) through (f)(2)(iv)(E).
(F) [Reserved]. For further guidance, see § 1.1471–5T(f)(2)(iv)(F).
(v) [Reserved]. For further guidance, see § 1.1471–5T(f)(2)(v) through (f)(2)(v)(B).
(4) * * *
(i) [Reserved]. For further guidance, see § 1.1471–5T(f)(4)(i).
(g) * * *
(3) * * *
(i) * * *
(D) [Reserved]. For further guidance, see § 1.1471–5T(g)(3)(i)(D).
(i) [Reserved]. For further guidance, see § 1.1471–5T(i) through (i)(10).
(j) [Reserved]. For further guidance, see § 1.1471–5T(j).
(k) [Reserved]. For further guidance, see § 1.1471–5T(k).
(a) [Reserved]. For further guidance, see § 1.1471–5(a).
(1) through (2) [Reserved]. For further guidance, see § 1.1471–5(a)(1) through (2).
(3) [Reserved]. For further guidance, see § 1.1471–5(a)(3).
(i)
(ii) [Reserved]. For further guidance, see § 1.1471–5(a)(3)(ii).
(iii) [Reserved]. For further guidance, see § 1.1471–5(a)(3)(iii).
(iv) [Reserved]. For further guidance, see § 1.1471–5(a)(3)(iv).
(v) [Reserved]. For further guidance, see § 1.1471–5(a)(3)(v).
(4) [Reserved]. For further guidance, see § 1.1471–5(a)(4).
(i)
(ii) [Reserved]. For further guidance, see § 1.1471–5(a)(4)(ii).
(iii) [Reserved]. For further guidance, see § 1.1471–5(a)(4)(iii).
(b) [Reserved]. For further guidance, see § 1.1471–5(b).
(1) [Reserved]. For further guidance, see § 1.1471–5(b)(1).
(i) through (ii) [Reserved]. For further guidance, see § 1.1471–5(b)(1)(i) through (ii).
(iii) [Reserved]. For further guidance, see § 1.1471–5(b)(1)(iii).
(A) [Reserved]. For further guidance, see § 1.1471–5(b)(1)(iii)(A).
(B) [Reserved]. For further guidance, see § 1.1471–5(b)(1)(iii)(B).
(
(
(
(C) [Reserved]. For further guidance, see § 1.1471–5(b)(1)(iii)(C) through (b)(1)(iii)(C)(
(iv) [Reserved]. For further guidance, see § 1.1471–5(b)(1)(iv).
(2) [Reserved]. For further guidance, see § 1.1471–5(b)(2) through (b)(2)(vi).
(3) [Reserved]. For further guidance, see § 1.1471–5(b)(3).
(i) through (iii) [Reserved]. For further guidance, see § 1.1471–5(b)(3)(i) through (b)(3)(iii)(B)(
(iv)
(v) [Reserved]. For further guidance, see § 1.1471–5(b)(3)(v).
(A)
(B) [Reserved]. For further guidance, see § 1.1471–5(b)(3)(v)(B).
(
(
(vi)
(A)
(B)
(
(
(vii) [Reserved]. For further guidance, see § 1.1471–5(b)(3)(vii) through (b)(3)(vii)(D)(
(4) through (5) [Reserved]. For further guidance, see § 1.1471–5(b)(4) through (5).
(c)
(d) [Reserved]. For further guidance, see § 1.1471–5(d).
(e) [Reserved]. For further guidance, see § 1.1471–5(e).
(1) [Reserved]. For further guidance, see § 1.1471–5(e)(1).
(i) through (iv) [Reserved]. For further guidance, see § 1.1471–5(e)(1)(i) through (iv).
(v) [Reserved]. For further guidance, see § 1.1471–5(e)(1)(v).
(A) Is part of an expanded affiliated group that includes a depository institution, custodial institution, specified insurance company, or investment entity described in paragraphs (e)(4)(i)(B) or (C) of this section; or
(B) [Reserved]. For further guidance, see § 1.1471–5(e)(1)(v)(B).
(2) [Reserved]. For further guidance, see § 1.1471–5(e)(2) through (e)(2)(iv).
(3) [Reserved]. For further guidance, see § 1.1471–5(e)(3).
(i) [Reserved]. For further guidance, see § 1.1471–5(e)(3)(i) through (e)(3)(i)(B).
(ii)
(iii) [Reserved]. For further guidance, see § 1.1471–5(e)(3)(iii).
(4) [Reserved]. For further guidance, see § 1.1471–5(e)(4).
(i) through (iv) [Reserved]. For further guidance, see § 1.1471–5(e)(4)(i) through (e)(4)(iv)(B).
(v) [Reserved]. For further guidance, see § 1.1471–5(e)(4)(v).
For further guidance, see § 1.1471–5(e)(4)(v),
(5) [Reserved]. For further guidance, see § 1.1471–5(e)(5).
(i) [Reserved]. For further guidance, see § 1.1471–5(e)(5)(i).
(A) [Reserved]. For further guidance, see § 1.1471–5(e)(5)(i)(A).
(
(
(B)
(
(
(C)
(D) [Reserved]. For further guidance, see § 1.1471–5(e)(5)(i)(D).
(
(
(
(
(
(
(E) [Reserved]. For further guidance, see § 1.1471–5(e)(5)(i)(E).
(ii) through (iii) [Reserved]. For further guidance, see § 1.1471–5(e)(5)(ii) through (iii).
(iv) [Reserved]. For further guidance, see § 1.1471–5(e)(5)(iv).
(A) [Reserved]. For further guidance, see § 1.1471–5(e)(5)(iv)(A).
(B) The entity does not hold an account (other than a depository account in the country in which the entity is operating to pay for expenses in that country) with or receive payments from any withholding agent other than a member of its expanded affiliated group;
(C) through (D) [Reserved]. For further guidance, see § 1.1471–5(e)(5)(iv)(C) through (D).
(v) [Reserved]. For further guidance, see § 1.1471–5(e)(5)(v) through (e)(5)(vi)(D).
(6) [Reserved]. For further guidance, see § 1.1471–5(e)(6).
(f) [Reserved]. For further guidance, see § 1.1471–5(f).
(1) [Reserved]. For further guidance, see § 1.1471–5(f)(1).
(i) [Reserved]. For further guidance, see § 1.1471–5(f)(1)(i).
(A) [Reserved]. For further guidance, see § 1.1471–5(f)(1)(i)(A).
(
(
(
(B) [Reserved]. For further guidance, see § 1.1471–5(f)(1)(i)(B).
(
(
(
(C) [Reserved]. For further guidance, see § 1.1471–5(f)(1)(i)(C).
(
(
(
(D) [Reserved]. For further guidance, see § 1.1471–5(f)(1)(i)(D).
(
(
(
(
(
(
(
(E)
(
(
(F) [Reserved]. For further guidance, see § 1.1471–5(f)(1)(i)(F).
(
(
(
(
(
(
(
(
(
(
(
(
(ii) [Reserved]. For further guidance, see § 1.1471–5(f)(1)(ii).
(A) [Reserved]. For further guidance, see § 1.1471–5(f)(1)(ii)(A).
(B) Have its responsible officer certify every three years to the IRS, either individually or collectively for the FFI's expanded affiliated group, that all of the requirements for the deemed-compliant category claimed by the FFI have been satisfied since the later of the date the FFI registers as a deemed-compliant FFI or June 30, 2014;
(C) through (D) [Reserved]. For further guidance, see § 1.1471–5(f)(1)(ii)(C) through (D).
(iii) [Reserved]. For further guidance, see § 1.1471–5(f)(1)(iii).
(2)
(i) [Reserved]. For further guidance, see § 1.1471–5(f)(2)(i).
(A) [Reserved]. For further guidance, see § 1.1471–5(f)(2)(i)(A) through (f)(2)(i)(A)(
(B) The FFI's business consists primarily of receiving deposits from and making loans to, with respect to a bank, retail customers that are unrelated to such bank and, with respect to a credit union or similar cooperative credit organization, members, provided that no
(C) through (F) [Reserved]. For further guidance, see § 1.1471–5(f)(2)(i)(C) through (F).
(ii) [Reserved]. For further guidance, see § 1.1471–5(f)(2)(ii) through (f)(2)(ii)(C).
(iii)
(A) The FFI is an FFI solely because it is an investment entity and is not a QI, WP, or WT.
(B) A participating FFI, reporting Model 1 FFI, or U.S. financial institution agrees to fulfill all due diligence, withholding, and reporting responsibilities that the FFI would have assumed if it were a participating FFI.
(C) Twenty or fewer individuals own all of the debt and equity interests in the FFI (disregarding debt interests owned by U.S. financial institutions, participating FFIs, registered deemed-compliant FFIs, and certified deemed-compliant FFIs and equity interests owned by an entity if that entity owns 100 percent of the equity interests in the FFI and is itself a sponsored FFI under this paragraph (f)(2)(iii)).
(D) The sponsoring entity complies with the following requirements—
(
(
(
(
(
(
(E) The IRS may revoke a sponsoring entity's status as a sponsoring entity with respect to all sponsored FFIs if there is a material failure by the sponsoring entity to comply with its obligations under this paragraph (f)(2)(iii)(E) with respect to any sponsored FFI. A sponsoring entity is not liable for any failure to comply with the obligations contained in this paragraph (f)(2)(iii)(E) unless the sponsoring entity is a withholding agent that is separately liable for the failure to withhold on or report with respect to the payment made to the sponsored FFI. A sponsored FFI will remain liable for any failure of its sponsoring entity to comply with the obligations contained in this paragraph (f)(2)(iii)(E) that the sponsoring entity has agreed to undertake on behalf of the FFI, even if the sponsoring entity is also a withholding agent and is itself separately liable for the failure to withhold on or report with respect to a payment made to the sponsored FFI. The same tax, interest, or penalties, however, shall not be collected more than once.
(iv)
(A) The FFI is an investment entity that issued one or more classes of debt or equity interests to investors pursuant to a trust indenture or similar agreement and all of such interests were issued on or before January 17, 2013.
(B) The FFI was in existence as of January 17, 2013, and has entered into a trust indenture or similar agreement that requires the FFI to pay to investors holding substantially all of the interests in the FFI, no later than a set date or period following the maturity of the last asset held by the FFI, all amounts that such investors are entitled to receive from the FFI.
(C) The FFI was formed and operated for the purpose of purchasing or acquiring specific types of debt instruments or interests therein and holding those assets subject to reinvestment only under prescribed circumstances to maturity.
(D) Substantially all of the assets of the FFI consist of debt instruments or interests therein.
(E) All payments made to the investors of the FFI (other than holders of a de minimis interest) are either cleared through a clearing organization or custodial institution that is a participating FFI, reporting Model 1 FFI, or U.S. financial institution or made through a transfer agent that is a participating FFI, reporting Model 1 FFI, or U.S. financial institution.
(F) The FFI's trustee or fiduciary is not authorized through a fiduciary duty or otherwise to fulfill the obligations of a participating FFI under § 1.1471–4 and no other person has the authority to fulfill the obligations of a participating FFI under § 1.1471–4 on behalf of the FFI.
(v)
(A) The FFI is a financial institution solely because it is described in § 1.1471–5(e)(4)(i)(A).
(B) The FFI does not maintain financial accounts.
(3) [Reserved]. For further guidance, see § 1.1471–5(f)(3).
(i) [Reserved]. For further guidance, see § 1.1471–5(f)(3)(i).
(ii) [Reserved]. For further guidance, see § 1.1471–5(f)(3)(ii).
(A) through (E) [Reserved]. For further guidance, see § 1.1471–5(f)(3)(ii)(A) through (E).
(4) [Reserved]. For further guidance, see § 1.1471–5(f)(4).
(i) The distributor provides investment services to at least 30 customers unrelated to each other and fewer than half of the distributor's customers are related to each other. For purposes of this paragraph (f)(4)(i), customers are related to each other if they have a relationship with each other described in section 267(b).
(ii) through (viii) [Reserved]. For further guidance, see § 1.1471–5(f)(4)(ii) through (viii).
(g) [Reserved]. For further guidance, see § 1.1471–5(g).
(1) through (2) [Reserved]. For further guidance, see § 1.1471–5(g)(1) through (g)(2)(iv).
(3) [Reserved]. For further guidance, see § 1.1471–5(g)(3).
(i) [Reserved]. For further guidance, see § 1.1471–5(g)(3)(i).
(A) through (C) [Reserved]. For further guidance, see § 1.1471–5(g)(3)(i)(A) through (C).
(D)
(ii) through (iii) [Reserved]. For further guidance, see § 1.1471–5(g)(3)(ii) through (iii).
(4) [Reserved]. For further guidance, see § 1.1471–5(g)(4).
(h) [Reserved]. For further guidance, see § 1.1471–5(h) through (h)(2).
(i)
(1) [Reserved]. For further guidance, see § 1.1471–5(i)(1).
(2)
(3)
(4)
(i)
(A)
(B)
(ii)
(iii)
(5)
(i) Ownership of a warrant, option, obligation convertible into stock, or other similar instrument creating an interest in a corporation will be considered for purposes of paragraph (i)(4) of this section to the extent that the common parent or member of the expanded affiliated group that holds such instrument also maintains voting rights with respect to such corporation. However, interests described in § 1.1504–4(d)(2) will not be treated as options.
(ii) Ownership of a warrant, option, obligation convertible into an equity interest, or other similar instrument creating an interest in a corporation or entity other than a corporation will be considered for purposes of paragraph (i)(4) of this section to the extent that such instrument is reasonably certain to be exercised, based on all of the facts and circumstances and in accordance with the principles set forth in § 1.1504–4(g).
(6)
(i) The member that owns the investment entity is an FFI that is in the business of providing seed capital to form investment entities, the interests in which it intends to sell to investors that do not have a relationship with each other described in section 267(b);
(ii) The investment entity is created in the ordinary course of such other FFI's business described in paragraph (i)(6)(i) of this section;
(iii) As of the date the FFI acquired the equity interest, any equity interest in the investment entity in excess of 50 percent of the total value of the stock of the investment entity is intended to be held by such other FFI (including ownership by other members of such other FFI's expanded affiliated group) for no more than three years from the date on which such other FFI first acquired an equity interest in the investment entity; and
(iv) In the case of an equity interest that has been held by such other FFI for over three years from the date referenced in paragraph (i)(6)(iii) of this section, the aggregate value of the equity interest held by such other FFI and the equity interests held by other members of its expanded affiliated group is 50 percent or less of the total value of the stock of the investment entity.
(7)
(8)
(9)
(10)
(j)
(k)
(l) [Reserved]. For further guidance, see § 1.1471–5(l).
(m)
(d) * * *
(1) [Reserved]. For further guidance, see § 1.1471–6T(d)(1).
(4) [Reserved]. For further guidance, see § 1.1471–6T(d)(4).
(f) * * *
(2) * * *
(iii) * * *
(B) [Reserved]. For further guidance, see § 1.1471–6T(f)(2)(iii)(B).
(C) [Reserved]. For further guidance, see § 1.1471–6T(f)(2)(iii)(C).
(3) * * *
(ii) [Reserved]. For further guidance, see § 1.1471–6T(f)(3)(ii).
(iii) [Reserved]. For further guidance, see § 1.1471–6T(f)(3)(iii).
(5) [Reserved]. For further guidance, see § 1.1471–6T(f)(5).
(6) [Reserved]. For further guidance, see § 1.1471–6T(f)(6).
(g) [Reserved]. For further guidance, see § 1.1471–6T(g).
(h) * * *
(2) [Reserved]. For further guidance, see § 1.1471–6T(h)(2) through (h)(2)(iii).
(a) through (c) [Reserved]. For further guidance, see § 1.1471–6(a) through (c)(3).
(d) [Reserved]. For further guidance, see § 1.1471–6(d).
(1)
(2) through (3) [Reserved]. For further guidance, see § 1.1471–6(d)(2) through (3).
(4)
(e) [Reserved]. For further guidance, see § 1.1471–6(e).
(f) [Reserved]. For further guidance, see § 1.1471–6(f).
(1) [Reserved]. For further guidance, see § 1.1471–6(f)(1).
(2) [Reserved]. For further guidance, see § 1.1471–6(f)(2).
(i) through (ii) [Reserved]. For further guidance, see § 1.1471–6(f)(2)(i) through (ii).
(iii) [Reserved]. For further guidance, see § 1.1471–6(f)(2)(iii).
(A) [Reserved]. For further guidance, see § 1.1471–6(f)(2)(iii)(A).
(B) The fund receives at least 50 percent of its total contributions (other than transfers of assets from accounts described in § 1.1471–5(b)(2)(i)(A) (referring to retirement and pension accounts), from retirement and pension accounts described in an applicable Model 1 or Model 2 IGA, or from other retirement funds described in this paragraph (f) or in an applicable Model 1 or Model 2 IGA) from the sponsoring employers;
(C) Distributions or withdrawals from the fund are allowed only upon the occurrence of specified events related to retirement, disability, or death (except rollover distributions to accounts described in § 1.1471–5(b)(2)(i)(A) (referring to retirement and pension accounts), to retirement and pension accounts described in an applicable Model 1 or Model 2 IGA, or to other retirement funds described in this paragraph (f) or in an applicable Model 1 or Model 2 IGA), or penalties apply to distributions or withdrawals made before such specified events; or
(D) [Reserved]. For further guidance, see § 1.1471–6(f)(2)(iii)(D).
(3) [Reserved]. For further guidance, see § 1.1471–6(f)(3).
(i) [Reserved]. For further guidance, see § 1.1471–6(f)(3)(i).
(ii) The fund is sponsored by one or more employers and each of these employers are not investment entities or passive NFFEs;
(iii) Employee and employer contributions to the fund (other than transfers of assets from other retirement plans described in paragraph (f)(1) of this section, from accounts described in § 1.1471–5(b)(2)(i)(A) (referring to retirement and pension accounts), or retirement and pension accounts described in an applicable Model 1 or Model 2 IGA) are limited by reference to earned income and compensation of the employee, respectively;
(iv) through (v) [Reserved]. For further guidance, see § 1.1471–6(f)(3)(iv) through (v).
(4) [Reserved]. For further guidance, see § 1.1471–6(f)(4).
(5)
(6)
(7) [Reserved]. For further guidance, see § 1.1471–6(f)(7).
(g)
(h) [Reserved]. For further guidance, see § 1.1471–6(h).
(1) [Reserved]. For further guidance, see § 1.1471–6(h)(1).
(2)
(i) The entity undertakes commercial financial activity described in paragraph (h)(1) of this section solely for or at the direction of other exempt beneficial owners and such commercial financial activity is consistent with the purposes of the entity;
(ii) The entity has no outstanding debt that would be a financial account under § 1.1471–5(b)(1)(iii)(C); and
(iii) The entity only maintains financial accounts that are depository accounts for current or former employees of the entity (and the spouses and children of such employees) or financial accounts for exempt beneficial owners.
(i) [Reserved]. For further guidance, see § 1.1471–6(i).
(j)
The additions and revisions read as follows:
(b) * * *
(1) [Reserved]. For further guidance, see § 1.1472–1T(b)(1).
(2) [Reserved]. For further guidance, see § 1.1472–1T(b)(2).
(c) * * *
(1) [Reserved]. For further guidance, see § 1.1472–1T(c)(1).
(i) [Reserved]. For further guidance, see § 1.1472–1T(c)(1)(i).
(ii) [Reserved]. For further guidance, see § 1.1472–1T(c)(1)(ii).
(iii) [Reserved]. For further guidance, see § 1.1472–1T(c)(1)(iii).
(iv) [Reserved]. For further guidance, see § 1.1472–1T(c)(1)(iv).
(C) [Reserved]. For further guidance, see § 1.1472–1T(c)(1)(iv)(C).
(v) [Reserved]. For further guidance, see § 1.1472–1T(c)(1)(v).
(vi) [Reserved]. For further guidance, see § 1.1472–1T(c)(1)(vi).
(vii) [Reserved]. For further guidance, see § 1.1472–1T(c)(1)(vii).
(2) [Reserved]. For further guidance, see § 1.1472–1T(c)(2).
(3) [Reserved]. For further guidance, see § 1.1472–1T(c)(3).
(4) [Reserved]. For further guidance, see § 1.1472–1T(c)(4).
(5) [Reserved]. For further guidance, see § 1.1472–1T(c)(5) through (c)(5)(iv).
(d) * * *
(1) [Reserved]. For further guidance, see § 1.1472–1T(d)(1).
(2) [Reserved]. For further guidance, see § 1.1472–1T(d)(2).
(f) [Reserved]. For further guidance, see § 1.1472–1T(f).
(g) [Reserved]. For further guidance, see § 1.1472–1T(g).
(a) [Reserved]. For further guidance, see § 1.1472–1(a).
(b) [Reserved]. For further guidance, see § 1.1472–1(b).
(1)
(i) through (iii) [Reserved]. For further guidance, see § 1.1472–1(b)(1)(i) through (iii).
(2)
(c) [Reserved]. For further guidance, see § 1.1472–1(c).
(1)
(i)
(A) through (C) [Reserved]. For further guidance, see § 1.1472–1(c)(1)(i)(A) through (c)(1)(i)(C)(
(ii)
(iii)
(iv)
(A) through (B) [Reserved]. For further guidance, see § 1.1472–1(c)(1)(iv)(A) through (c)(1)(B)(
(C)
(v)
(vi)
(vii)
(2)
(3) Definition of
(i) The NFFE must register on Form 8957, “FATCA Registration,” (or such other form as the IRS may prescribe) with the IRS to obtain a GIIN pursuant to the procedures prescribed by the IRS;
(ii) The NFFE must report directly to the IRS on Form 8966, “FATCA Report,” (or such other form as the IRS may prescribe) the following information for each calendar year (or, may be required by the IRS to certify on Form 8966, or in such other manner as the IRS may prescribe, that the NFFE has no substantial U.S. owners):
(A) The name, address, and TIN of each substantial U.S. owner (as defined in § 1.1473–1(b)) of such NFFE;
(B) The total of all payments made to each substantial U.S. owner (including the gross amounts paid or credited to the substantial U.S. owner with respect to such owner's equity interest in the NFFE during the calendar year, which include payments in redemption or liquidation (in whole or part) of the substantial U.S. owner's equity interest in the NFFE);
(C) The value of each substantial U.S. owner's equity interest in the NFFE determined by applying the rules described in § 1.1471–5(b)(4) (substituting the term
(D) The name, address, and GIIN of the NFFE, and
(E) Any other information as required by Form 8966 (or such other form as the IRS may prescribe) and its accompanying instructions;
(iii) The NFFE must obtain a written certification (contained on a withholding certificate or in a written statement) from each person that would be treated as a substantial U.S. owner of the NFFE if such person were a specified U.S. person. Such written certification must indicate whether the person is a substantial U.S. owner of the NFFE, and if so, the name, address and TIN of the person. If the NFFE has reason to know that such written certification is unreliable or incorrect, it must contact the person and request a revised written certification. If no revised written certification is received, the NFFE must treat the person as a substantial U.S. owner and report on Form 8966 the information required under paragraph (c)(3)(ii) of this section. The NFFE has reason to know that such a written certification is unreliable or incorrect if the certification is inconsistent with information in the NFFE's possession, including information that the NFFE provides to a financial institution in order for the financial institution to meet its AML or other account identification due diligence procedures with respect to the NFFE's account, information that is publicly available, and U.S. indicia as described in § 1.1441–7(b) and for which appropriate documentation sufficient to cure the U.S. indicia in the manner set forth in § 1.1441–7(b)(8) has not been obtained.
(iv) The NFFE must keep records that it produces in the ordinary course of its business that summarize the activity (including the gross amounts described in paragraph (c)(3)(ii)(B) that are paid or credited to each of its substantial U.S. owners) relating to its transactions with respect to the equity of the NFFE held by each of its substantial U.S. owners for any calendar year in which the owner was required to be reported under paragraph (c)(3)(ii) of this section. The records must be retained for the longer of six years or the retention period under the NFFE's normal business procedures. A NFFE may be required to extend the six year retention period if the IRS requests such an extension prior to the expiration of the six year period;
(v) The NFFE must respond to requests made by the IRS for additional information with respect to any substantial U.S. owner that is subject to reporting by the NFFE or with respect to the records described in paragraphs (c)(3)(iii) or (iv) of this section;
(vi) The NFFE must make a periodic certification to the IRS within each six-month period following the end of each certification period relating to its compliance with respect to the election described in paragraphs (c)(3) and (4) of this section. The first certification period begins on the date a GIIN is issued and ends at the close of the third full calendar year following that date. Each subsequent certification period is the three calendar year period following
(A)(
(
(B) With respect to any failure to report to the extent required under paragraph (c)(3)(ii), the NFFE has corrected such failure by filing the appropriate information returns; and
(vii) The NFFE has not had its status as a direct reporting NFFE revoked by the IRS.
(4)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(5)
(i)
(ii)
(A) Is authorized to act on behalf of the NFFE;
(B) Has registered with the IRS as a sponsoring entity;
(C) Has registered the NFFE with the IRS as a sponsored direct reporting NFFE;
(D) Agrees to perform, on behalf of the NFFE, all due diligence, reporting, and other requirements that the NFFE would have been required to perform as a direct reporting NFFE;
(E) Identifies the NFFE in all reporting completed on the NFFE's behalf;
(F) Complies with the certification and other requirements in paragraphs (f) and (g) of this section;
(G) Has not had its status as a sponsoring entity revoked; and
(H) Agrees to notify all relevant withholding agents and the IRS if its status as a sponsoring entity is revoked, if it otherwise ceases to be the sponsoring entity of any of its sponsored direct reporting NFFEs (for example, if the sponsored direct reporting NFFE changes sponsors), or if the status of any of its sponsored direct reporting NFFEs has been revoked.
(iii)
(iv)
(d) [Reserved]. For further guidance, see § 1.1472–1(d).
(1)
(2)
(3) through (5) [Reserved]. For further guidance, see § 1.1472–1(d)(3) through (5).
(e) [Reserved]. For further guidance, see § 1.1472–1(e) through (e)(2).
(f)
(g)
(h) [Reserved]. For further guidance, see § 1.1472–1(h).
(i)
(a) * * *
(2) * * *
(vi) [Reserved]. For further guidance, see § 1.1473–1T(a)(2)(vi).
(3) * * *
(iii) * * *
(B) * * *
(
(4) * * *
(vi) [Reserved]. For further guidance, see § 1.1473–1T(a)(4)(vi).
(vii) [Reserved]. For further guidance, see § 1.1473–1T(a)(4)(vii).
(5) * * *
(i) [Reserved]. For further guidance, see § 1.1473–1T(a)(5)(i).
(ii) [Reserved]. For further guidance, see § 1.1473–1T(a)(5)(ii).
(iii) [Reserved]. For further guidance, see § 1.1473–1T(a)(5)(iii).
(iv) [Reserved]. For further guidance, see § 1.1473–1T(a)(5)(iv).
(v) [Reserved]. For further guidance, see § 1.1473–1T(a)(5)(v).
(vi) [Reserved]. For further guidance, see § 1.1473–1T(a)(5)(vi).
(b) * * *
(2) * * *
(v) [Reserved]. For further guidance, see § 1.1473–1T(b)(2)(v).
(a) [Reserved]. For further guidance, see § 1.1473–1(a).
(1) [Reserved]. For further guidance, see § 1.1473–1(a)(1) through (a)(1)(ii).
(2) [Reserved]. For further guidance, see § 1.1473–1(a)(2).
(i) through (v) [Reserved]. For further guidance, see § 1.1473–1(a)(2)(i) through (v).
(vi)
(vii) [Reserved]. For further guidance, see § 1.1473–1(a)(2)(vii) through (a)(2)(vii)(B).
(3) [Reserved]. For further guidance, see § 1.1473–1(a)(3).
(i) through (ii) [Reserved]. For further guidance, see § 1.1473–1(a)(3)(i) through (a)(3)(ii)(C).
(iii) [Reserved]. For further guidance, see § 1.1473–1(a)(3)(iii).
(A) [Reserved]. For further guidance, see § 1.1473–1(a)(3)(iii)(A).
(B) [Reserved]. For further guidance, see § 1.1473–1(a)(3)(iii)(B).
(
(
(
(4) [Reserved]. For further guidance, see § 1.1473–1(a)(4).
(i) through (v) [Reserved]. For further guidance, see § 1.1473–1(a)(4)(i) through (v).
(vi)
(vii)
(5) [Reserved]. For further guidance, see § 1.1473–1(a)(5).
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii) [Reserved]. For further guidance, see § 1.1473–1(a)(5)(vii).
(6) [Reserved]. For further guidance, see § 1.1473–1(a)(6).
(7) [Reserved]. For further guidance, see § 1.1473–1(a)(7).
(b) [Reserved]. For further guidance, see § 1.1473–1(b).
(1) [Reserved]. For further guidance, see § 1.1473–1(b)(1) through (b)(1)(iii)(B).
(2) [Reserved]. For further guidance, see § 1.1473–1(b)(2).
(i) through (iv) [Reserved]. For further guidance, see § 1.1473–1(b)(2)(i) through (iv).
(v)
(3) through (7) [Reserved]. For further guidance, see § 1.1473–1(b)(3) through (7).
(c) through (f) [Reserved]. For further guidance, see § 1.1473–1(c) through (f).
(g)
The additions and revisions read as follows:
(d) * * *
(1) * * *
(i) [Reserved]. For further guidance, see § 1.1474–1T(d)(1)(i).
(ii) * * *
(A) * * *
(
(
(
(B) * * *
(
(
(
(
(
(2) * * *
(i) [Reserved]. For further guidance, see § 1.1474–1T(d)(2)(i).
(A) [Reserved]. For further guidance, see § 1.1474–1T(d)(2)(i)(A).
(B) [Reserved]. For further guidance, see § 1.1474–1T(d)(2)(i)(B).
(C) [Reserved]. For further guidance, see § 1.1474–1T(d)(2)(i)(C).
(4) * * *
(i) * * *
(B) [Reserved]. For further guidance, see § 1.1474–1T(d)(4)(i)(B).
(E) [Reserved]. For further guidance, see § 1.1474–1T(d)(4)(i)(E).
(ii) * * *
(B) [Reserved]. For further guidance, see § 1.1474–1T(d)(4)(ii)(B).
(C) [Reserved]. For further guidance, see § 1.1474–1T(d)(4)(ii)(C).
(iii) * * *
(A) [Reserved]. For further guidance, see § 1.1474–1T(d)(4)(iii) through (d)(4)(iii)(C).
(i) * * *
(1) [Reserved]. For further guidance, see § 1.1474–1T(i)(1).
(i) [Reserved]. For further guidance, see § 1.1474–1T(i)(1)(i).
(ii) [Reserved]. For further guidance, see § 1.1474–1T(i)(1)(ii).
(iii) [Reserved]. For further guidance, see § 1.1474–1T(i)(1)(iii) through (i)(1)(iii)(E).
(2) [Reserved]. For further guidance, see § 1.1474–1T(i)(2).
(iii) [Reserved]. For further guidance, see § 1.1474–1T(i)(2)(iii).
(a) through (c) [Reserved]. For further guidance, see § 1.1474–1(a) through (c)(3).
(d) [Reserved]. For further guidance, see § 1.1474–1(d).
(1) [Reserved]. For further guidance, see § 1.1474–1(d)(1).
(i)
(ii) [Reserved]. For further guidance, see § 1.1474–1(d)(1)(ii).
(A) [Reserved]. For further guidance, see § 1.1474–1(d)(1)(ii)(A).
(
(
(
(
(
(
(B) [Reserved]. For further guidance, see § 1.1474–1(d)(1)(ii)(B).
(
(
(
(
(
(
(
(
(2) [Reserved]. For further guidance, see § 1.1474–1(d)(2).
(i)
(A) An amount of a withholdable payment that is subject to withholding under chapter 4 paid after June 30, 2014;
(B) An amount of a withholdable payment of U.S. source FDAP income that is also reportable on Form 1042–S under § 1.1461–1(c)(2)(i); or
(C) A foreign passthru payment subject to withholding under chapter 4.
(ii) through (iii) [Reserved]. For further guidance, see § 1.1474–1(d)(2)(ii) through (iii).
(3) [Reserved]. For further guidance, see § 1.1474–1(d)(3) through (d)(3)(x).
(4) [Reserved]. For further guidance, see § 1.1474–1(d)(4).
(i) [Reserved]. For further guidance, see § 1.1474–1(d)(4)(i).
(A) [Reserved]. For further guidance, see § 1.1474–1(d)(4)(i)(A).
(B)
(C) through (D) [Reserved]. For further guidance, see § 1.1474–1(d)(4)(i)(C) through (d)(4)(i)(D)(
(E)
(ii) [Reserved]. For further guidance, see § 1.1474–1(d)(4)(ii).
(A) [Reserved]. For further guidance, see § 1.1474–1(d)(4)(ii)(A).
(B)
(C)
(iii)
(B)
(C)
(iv) through (vi) [Reserved]. For further guidance, see § 1.1474–1(d)(4)(iv) through (vi).
(e) through (h) [Reserved]. For further guidance, see § 1.1474–1(e) through (h).
(i) [Reserved]. For further guidance, see § 1.1474–1(i).
(1)
(i) Beginning on July 1, 2014, if a withholding agent (other than an FFI reporting accounts held by owner-documented FFIs under § 1.1471–4(d)) makes a withholdable payment to an entity account holder or payee of an obligation and the withholding agent treats the entity as an owner-documented FFI under § 1.1471–3(d)(6), the withholding agent is required to report for July 1 through December 31, 2014, with respect to each specified U.S. person that has a direct or indirect debt or equity interest in such entity the information described in paragraph (i)(1)(iii) of this section.
(ii) Beginning in calendar year 2015, if a withholding agent (other than an FFI reporting accounts held by owner-documented FFIs under § 1.1471–4(d)) makes during a calendar year a payment of a chapter 4 reportable amount to an entity account holder or payee of an obligation and the withholding agent treats the entity as an owner-documented FFI under § 1.1471–3(d)(6), the withholding agent is required to report for such calendar year with respect to each specified U.S. person that has a direct or indirect debt or equity interest in such entity the information described in paragraph (i)(1)(iii) of this section.
(iii) The information that a withholding agent (other than an FFI reporting accounts held by owner-documented FFIs under § 1.1471–4(d)) is required to report under paragraphs (i)(1)(i) and (i)(1)(ii) of this section must be made on Form 8966 (or such other form as the IRS may prescribe) and filed on or before March 31 of the calendar year following the year in which the withholdable payment was made. The report must contain the following information—
(A) The name of the owner-documented FFI;
(B) The name, address, and TIN of each specified U.S. person identified in § 1.1471–3(d)(6)(iv)(A)(
(C) For the period from July 1 through December 31, 2014, the total of all payments made to the owner-documented FFI and with respect to payments made after the 2014 calendar year the total of all payments made to the owner-documented FFI during the calendar year;
(D) The account balance or value of the account held by the owner-documented FFI; and
(E) Any other information required on Form 8966 and its accompanying instructions provided for purposes of such reporting.
(2)
(i) through (ii) [Reserved]. For further guidance, see § 1.1474–1(i)(2)(i) through (ii).
(iii) For the period from July 1, 2014 through December 31, 2014, the total of all payments made to the NFFE and, with respect to payments made after the 2014 calendar year, the total of all payments made to the NFFE during the calendar year; and
(iv) [Reserved]. For further guidance, see § 1.1474–1(i)(2)(iv).
(3) [Reserved]. For further guidance, see § 1.1474–1(i)(3).
(j) [Reserved]. For further guidance, see § 1.1474–1(j).
(k)
(b) * * *
(1) [Reserved]. For further guidance, see § 1.1474–6T(b)(1).
(f) [Reserved]. For further guidance, see § 1.1474–6T(f).
(a) [Reserved]. For further guidance, see § 1.1474–6(a).
(b) [Reserved]. For further guidance, see § 1.1474–6(b).
(1)
(2) through (3) [Reserved]. For further guidance, see § 1.1474–6(b)(2) through (3).
(c) through (e) [Reserved]. For further guidance, see § 1.1474–6(c) through (e).
(f)
(g) [Reserved]. For further guidance, see § 1.1474–6(g).
(h)