Erroneous FACTA Withholding?
What if a U.S. Withholding Agent of a Foreign financial Institution (FFI) erroneously applies a 30% Internal Revenue Code (IRC) Chapter 4 FATCA Withholding to a payment to the FFI? What can be done to recover the funds? Who is a Withholding Agent? You are a withholding agent for purposes of Chapter 4 if […]
What is being done to improve the Communication with Non-U.S. Users of FATCA and QI Systems?
On November, 2019, the Internal Revenue Service Advisory Council (IRSAC) published its Public Report. The purpose of IRSAC is to serve as an advisory body to the Commissioner of the IRS and to organize a public forum between IRS officials and public representatives for discussing tax administration issues. The IRSAC is required to hold a […]
Is the “FinCEN Query” a Gateway to Convergence?
FinCEN’s (a bureau of the U.S. Department of the Treasury) primary purpose is protecting the financial system from illicit use, combating money laundering, and promoting national security through the collection, analysis, and dissemination of financial intelligence and the strategic use of financial authorities. Its core activity is to “follow the money”. Its duties and responsibilities […]
Are Financial Institutions Creating a Corporate Governance Strategy to handle to End of Libor?
The London Interbank Offered Rate (LIBOR) expires at the end of 2021. Used since the early 1980s, LIBOR is the most referenced global short-term interest rate, and a “standard benchmark”. It is the pricing benchmark for an estimated $350 Trillion in financial transactions worldwide that include: credit cards home loans and mortgages company loans […]
Treasury and IRS are Aiming to Provide Greater Clarity on International Tax Reporting
On July 14, 2020, the US Treasury Department and the IRS released a proposed redesigned partnership form for tax year 2021 (filing season 2022). The two proposed forms SCHEDULE K-2 (Form 1065) and Schedule K-3 (Form 1065) are designed to provide “greater” clarity to partnerships on how to compute their US income tax liability with […]
U.S. Financial Institutions and FATCA
Little is written regarding FATCA and U.S. Financial Institutions (FI). That said, U.S. Financial Institutions have FATCA responsibilities. In the absence of permitted exceptions, FATCA requires U.S. FIs that make payments of most types of U.S. source withholdable income to non-U.S. persons to withhold a 30% tax on that income. This requires U.S. Financial Institutions […]
Does your Third-Party FATCA Consultant have the experience to interpret the complex US Tax Code?
Foreign Financial Institutions (FFIs) have multiple FATCA reporting compliance responsibilities and face the possibility of penalties for not complying. Understanding and interpreting more than 1,000 pages of FATCA regulations requires an underlying comprehension of their words (a new vocabulary) and the spirit behind their wording to avoid being inadvertently victimized by FATCA sanctions and problems […]
The “Affidavit” in the IRS Streamlined Filing Compliance Procedures is a Key Component
Streamlined Filing Compliance Procedures (Streamlined) is one of the options available for US Taxpayers with unreported foreign financial assets and income. The intention of the program is to provide non-willful uncompliant Taxpayers with a less stressful path toward recovering compliant status. The Streamlined process is available to US individual Taxpayers and Estates that fail to […]
The OVDP is now the VDP
There was and IRS termination of the Offshore Voluntary Disclosure Program (OVDP) on September 28, 2018. On November 20, 2018, following the OVDP notice of termination, there was a release of a Memorandum announcing the Voluntary Disclosure Practice (VDP). On May 29, 2020 there was the release by IRS of a new Voluntary Disclosure Practice […]
What is new in the DOJ Updated Corporate Compliance Program Evaluation Guidance?
On June 1, 2020, the Department of Justice (DOJ) Criminal Division published an update to the U.S. Department of Justice Criminal Division Evaluation of Corporate Compliance Programs. The Corporate Compliance Evaluation Guideline assists prosecutors with making decisions regarding a corporation’s compliance program effectiveness at the time of an offense, and the effectiveness of its compliance […]
Financial Institutions Can No Longer Afford to Underfund Compliance Hiring and Training
The Covid-19 Pandemic and the accompanying reduction in economic activity has been a rationale for Financial Institutions (FI) to re-analyze their budgets for compliance training and education. FIs, as well as businesses in other industries, are seeking to preserve liquidity through reducing expenditures. Not considering the risk-associated dangers resulting from compliance cost-cutting could be serious […]
OFAC is not part of the BSA, But Convergence is Occurring
On April 15, 2020, the members of the Federal Financial Institutions Examination Council (FFIEC) released updated sections and related examination procedures to the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual (Manual) which provide instructions to examiners when assessing the adequacy of a bank’s BSA/AML compliance program. The Manual was last updated in 2014. In the […]
