FATCA Regulatory Help Desk — Material Failures and Events of Non-Compliance

Material Failures Defined by the FATCA Regulation include:

• Deliberate or systemic failure to report required U.S. accounts.
• Deliberate failure to withhold on passthru payments when required, deposit taxes withheld, and/or deposit taxes when withheld.
• Failure to report recalcitrant accounts or nonparticipating FFIs
• Failure to report AML/FT sanctions for due diligence failures.
• A potential future obligation to the IRS that necessitates the creation of a reserve account

Events of Administrative Non-Compliance Under FATCA:

• Submitting information returns with missing or incomplete fields (such as missing account addresses or U.S. Taxpayer Identification Numbers (TINs))
• Basic formatting issues like using improper date formats (e.g., 1/1/1900), or placing generic terms (e.g., "bank", "authorities") in account name
• Failing to complete and submit required periodic certifications (like the Pre-existing Account Certification) by the original deadline, provided no material failures are indicated.
• Failure to conduct a periodic review of the compliance program.
• Temporary delays in transmitting bulk electronic filing data to the IRS that do not result from a lack of governance or poor due diligence.
• Failure to cooperate with an IRS request for additional information or making any fraudulent statement of material facts to the IRS.