Treasury Delays FATCA Implementation Yet Again

Today the Treasury Department and Internal Revenue Service issued Notice 2013-43 which delays the implementation of the controversial Foreign Account Tax Compliance Act (FATCA) by another six months.  The IRS was supposed to open the “FATCA Portal” on Monday, July 15, 2013, in order to permit Foreign Financial Institutions (FFIs) to start the FATCA registration process (see prior post here), but that process has been further delayed.

FATCA was passed by Congress in 2010, but its implementation has been repeatedly delayed to allow Treasury and the IRS to publish regulations, seek public comment, and incorporate those comments into the final regulations, which were issued in January 2013.  Treasury has simultaneously published model Intergovernmental Agreements (IGAs) in an effort to faciliate the effective implementation of FATCA through intergovernmental arrangements, and to date a number of countries have signed IGAs or indicated that they are willing to do so.

In a companion press release, Treasury announced that the FATCA deadlines were being delayed for six months as a result of “overwhelming interest from countries around the world” so as to allow the U.S. more time to reach IGAs with foreign governments as well as to provide more time for FFIs to comply with FATCA’s requirements.  Treasury Deputy Assistant Secretary for International Tax Affairs Robert B. Stack explained:

“Given the groundswell of international interest in FATCA, we are providing an additional six months to complete agreements with countries and jurisdictions across the globe, before withholding begins.  The high volume of international participation in this effort represents a quintessential race to the top. Every additional country we bring on board means we are one step closer to winning the fight against offshore tax evasion.”

In the press release, Treasury also stated that the U.S. has signed nine IGAs to date, and is engaged in “related conversations” with more than 80 other jurisdictions (up from 50 as reported in a prior press release available here).

Pursuant to Notice 2013-43, the new FATCA deadlines are as follows:

August 19, 2013:  Opening of FATCA Portal for online FFI registration.  FFIs will be able to utilize the portal to “get familiar with the registration process, to input preliminary information, and to refine that information.”  No FFI registration through the portal will be finalized until after January 1, 2014.  No GIINs (Global Intermediary Identification Numbers)will be issued until after January 1, 2014.

June 2, 2014:  IRS will electronically post the first list of FFIs which have registered and received GIINs.  To ensure inclusion on this list, FFIs must finalize their registrations through the portal by April 25, 2014.

June 30, 2014:  The effective date for the FFI Agreement of any FFI that registers with the IRS and receives a GIIN.  This provides a six month postponement of the deadlines for FFIs to complete due diligence on preexisting obligations.

July 1, 2014:  Deadline for withholding agents to implement new account opening procedures.  Participating FFIs must implement such procedures by the later of this date, or the effective date of its FFI Agreement.

March 31, 2015:  Deadline for the first information reports to be filed by FFIs with respect to U.S. accounts.  The final regulations required FFIs to report U.S. accounts maintained during the calendar years 2013 and 2014, but Notice 2013-43 appears to state that reporting for calendar year 2014 only will be required by this date (suggesting that FFIs will not be required to report on U.S. accounts maintained during calendar year 2013). 

Treasury and the IRS will amend the final FATCA regulations to reflect these changes.  In the meantime, however, taxpayers are advised that they may rely upon the provisions of Notice 2013-43.

2 thoughts on “Treasury Delays FATCA Implementation Yet Again

  1. Pingback: FATCA Update: IRS Releases Draft Form 8966 “FATCA Report” | Tax Controversy Watch

  2. Pingback: IRS Advisory Committee Calls For Further Delay in FATCA Implementation | Tax Controversy Watch

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s