Foodman CPAs & Advisors Newsletter
JANUARY / FEBRUARY 2016

In This Issue
  • FATCA Alerts
  • FAQs
  • FATCA Facts
  • Tax Transparency Initiatives

For more information on

FOODMAN'S QI  Program
(Qualified Intermediary)

Please click here
For more information on
FOODMAN'S FATCA
Program please click on offerings listed below:
The Foodman Philosophy
and Approach 
FATCA Help Desk(USFIs and FFIs)
FATCA Due Diligence Flow Charts for FFIs

 
Foodman FATCA Training Workshops for USFIs and FFIs including two new workshops on:
  • Certification Forms Training (W9, W8 and W8BEN-E)
  • FATCA Reporting - Form 8966 and Instructions
Implementation Advisory Services

 
FATCA Internal Audit Support

 
Intermediation with the IRS

 
Annual FATCA Update

 
Dear Colleagues:
 
If your FATCA implementation is progressing in line with the required deadlines:
  • Your Participating Institution is now In full compliance with the FATCA expanded due diligence and documentation for new accounts
  • You have already submitted your 2014 report and are now getting ready to submit your 2015 activity with the additional fields required
  • You are completing the final due diligence for pre-existing accounts and are in line with meeting the final deadline of June 30, 2016
  • All recalcitrant accounts and non-participating FFI accounts are being handled as per the requirements of your FFI agreement with the IRS  or your countries' IGA
  • You have completed your FATCA Policies and Procedures Documentation
  • You have just read the new Notice 2016 - 08 issued by the U.S. Treasury and the IRS announcing the proposed extension to the deadlines for the FATCA Certifications. They will now not be due until before the 1st of July of 2018
So now you are going to take a long break from FATCA and send all your staff on vacation!!!!
 
Well, maybe a short rest is okay, but the delay in the delivery of the certifications is not changing the "Review Period" that these certifications will need to cover. You need to make sure that:
  • Your internal controls and procedures are in place;
  • The Internal Audit Team is well trained in the Risks and Requirements of FATCA and have a thorough and well developped FATCA Audit Plan; and
  • Periodic Audit reviews and remediation is taking place as originally planned.   
For those of you that have signed an FFI Agreement, I would also like to recommend that you familiarize yourselves with what the FATCA regulation defines as "Material Failures".

 

In summary, a material failure is a Financial Institution failure to consistently  comply with the FATCA FFI Agreement either deliberately or by error attributable to the lack of adequate implemented procedures and controls. Material failures include:

  • Failure to identify and report US accounts, withhold and deposit taxes withheld as necessary and report recalcitrant and non participating FFI accounts as required
  • A criminal or civil penalty or sanction imposed on the Financial Institution or any of its branches imposed by a regulator or other government authority based on the failure of the institution to comply with the required AML Due Diligence procedures and therefore failure to properly identify account holders under the requirements of those procedures
  • Failure of the Financial Institution to create, for financial statement purposes, a tax reserve or provision to meet a potential future tax liability that arises from a lack of compliance with the FFI Agreement
Financial Institutions who have not signed an FFI agreement (those in countries with an IGA1) should receive direct imput from their local authorities on the definition of material failures, potential sanctions and the reguirement to establish a tax reserve account.
 
I hope to see a lot of you at the FIBA AML conference in March. Please contact Cathy McGrail at [email protected] if you wish to participate in our FATCA Focus Group Session on Monday the 7th of March. Otherwise please visit Foodman's Booth number 28.
 

Best Regards,

Stanley Foodman
Foodman CPAs & Advisors
(305) 365-1111 - [email protected]

FATCA ALERTS

Recent Warnings /Alerts 
 

 

 
The Internal Revenue Service has revised the FATCA Report 8966 for 2015. This update adds a number of new fields and deletes one entity classification in Part ll. Although these new fields are included in the 2015 report, the instructions detail some of them as optional for 2015.

For more information go to:  


The Department of the Treasury and the Internal Revenue Service have also published Notice 2016-08 announcing proposed changes in the regulation which among other changes, extends the delivery dates of FATCA Compliance Certifications. 

For more information go to: 

 


FATCA FAQs

Q: We are a Sponsoring Entity, and we would like to register our Sponsored Entities. How do we register our Sponsored Entities?
 
A:  The Sponsoring Entity that agrees to perform the due diligence, withholding and reporting obligations of one or more sponsored entities persuant to Reg 1.1471-5(f)(i)(F) should register with the IRS via the FATCA registration website as a Sponsoring Entity. The Sponsoring Entity can now also register each entity that they are sponsoring on the same FATCA Registration Website and should refer to the updated User Guide for the details.

While a Sponsoring Entity is required to register its Sponsored Entities for those entities to obtain their GIINs, there is a transitional rule that permits Sponsored Entities to use the GIIN of its Sponsoring Entity on its withholding certificates until January 1, 2017. At this time they have to have been registered and have received their own GIIN. 

FATCA FACTS (as of February 8, 2016)
  • Countries with signed IGA 1: 72
  • Countries with signed IGA 2: 8
  • Countries with
    Substantially Agreed IGA 1: 26
  • Countries with
    Substantially Agreed IGA 2:  6
  • Total Number of Registered Participating FFIs: 185,113
 Tax Transparency Initiatives
 
Have any of your clients received a FATCA Letter? Many FFIs worldwide are sending these out to identified U.S. persons or to clients with U.S. Indicia. 


Please read more on:
             
http://www.foodmanpa.com/news/have-you-received-a-fatca-letter/