On Friday, April 5, 2013, the Internal Revenue Service published a draft version of a new Form 8957, entitled “Foreign Account Tax Compliance Act (FATCA) Registration.” The new form is available here. This form is to be used by foreign banks to register as a participating Foreign Financial Institution (FFI) under FATCA.
By way of background, FATCA was passed by Congress in 2010 in order to provide the U.S. with another tool to combat international tax evasion by U.S. taxpayers. In broad terms, FATCA will require FFIs to annually report the names of their U.S. depositors to the IRS or face a 30 percent withholding tax on U.S. source payments. Final regulations implementing FATCA were issued earlier this year and are available here. When the final regulations were announced, Deputy Treasury Neal Wolin stated as follows: “These regulations give the Administration a powerful set of tools to combat offshore tax evasion effectively and efficiently. The final rules mark a critical milestone in international cooperation on these issues, and they provide important clarity for foreign and U.S. financial institutions.”
In an announcement accompanying release of the draft Form 8957, the IRS stressed that the form was being released in paper form only for public review and comment. FATCA registration will be available through an electronic only process starting in July 2013. Once registered, FFIs will be issued a unique identifying number called a Global Intermediary Identification Number (GIIN) which be used to demonstrate FATCA compliance. The IRS noted that paper registration would be available, but such paper registrations will not be processed until October 2013 and financial institutions registering in this manner could face delays in registration and issuance of the GIIN.