With the new year comes more guidance from Treasury and the Internal Revenue Service on implementation of the Foreign Account Tax Compliance Act (FATCA). FATCA become fully effective on July 1, 2014, and the first deadline for reporting of account information by U.S. persons is fast approaching. On January 5, 2015, Treasury and the IRS published the following additional FATCA guidance:
1. The IRS released a new, updated version of Form 1042-2, entitled “Foreign Person’s U.S. Source Income Subject to Withholding” (available here). In general, this form is required to be completed by withholding agents. For 2015, the form has been updated for FATCA purposes so that withholding agents can report withholdable payments made to foreign entities.
2. The IRS released a new version of Publication 515, entitled “Withholding of Tax on Nonresident Aliens and Foreign Entities” (available here). This publication has been update to include discussion of FATCA withholding requirements.
3. The IRS released an updated version of Form 8938, entitled “Statement of Specified Foreign Financial Assets” (available here). As part of FATCA, the Internal Revenue Code was amended to include a new provision, 6038D, which imposes foreign asset reporting obligations on individual taxpayers starting with the 2011 tax year. Foreign asset reporting pursuant to IRC 6038D is required to be made on Form 8938, which is filed with the individual taxpayer’s Form 1040 income tax return. On December 16, 2014, the IRS issued Final Regulations implementing the IRC 6038D/Form 8938 reporting obligations.