Updated FFI Agreement Has Been Released and Posted to the FATCA Website
June 25, 2014
Since FATCA has gone into place it has garnered a large amount of opposition and created some unforeseen externalities. However, international financial institutions are still readily signing up to report to the IRS via an online portal. The update named Rev. Proc.2014-38 supersedes 2017-13 is available, here. Rev. Proc. 2014-38 also provides guidance to FFIs and branches of FFIs treated as reporting financial institutions under a Model 2 intergovernmental agreement, or IGA, on complying with the terms of the FFI Agreement, as modified by the Model 2 IGA. The intergovernmental agreements have been negotiated by the Treasury Department with tax authorities in other countries to ease implementation of FATCA in accordance with their existing tax treaties and the nation’s own banking secrecy laws. They generally operate under two models. In a Model 1 IGA, the foreign financial institution reports the customer’s information to its government tax authority, which passes it along to the IRS. In a Model 2 IGA, the bank reports it directly to the IRS.
