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Financial Institutions Must Register for FATCA by January 1, 2014
Washington D.C., November 20, 2013 - The US Internal Revenue Service (IRS) has announced that Financial Institutions (FIs) must register for the Foreign Account Tax Compliance Act (FATCA) by January 1, 2014. In a move to combat tax evasion and increase transparency in international financial transactions, FATCA requires FIs to report information about foreign accounts held by US persons to the IRS.
Types of Financial Institutions
There are several types of FIs that must register for FATCA:
- Single FIs: These are individual FIs that do not belong to an Expanded Affiliated Group (EAG).
- Lead FIs: These are FIs that act as a lead entity for other FIs within an EAG.
- Member FIs: These are FIs that are part of an EAG but do not act as the lead entity.
- Sponsoring Entities: These are entities that perform certain functions on behalf of another FI.
Registration Process
The registration process for FATCA involves several steps:
- Create an account: Each FI must create a new account and choose an Access Code, which will be assigned a FATCA ID.
- Complete Part 1 of the online FATCA Registration form (Form 8957): This includes providing basic information about the FI, such as its name, address, and taxpayer identification number.
- Complete additional questions: Depending on the type of FI, it may need to answer additional questions, such as those related to its EAG or sponsorship activities.
- Electronically sign and submit the registration form: Once all required information has been entered, the FI must electronically sign and submit its registration form.
Key Steps for Each Type of Financial Institution
The following table summarizes the key steps for each type of FI:
| Single | Lead | Member | Sponsoring Entity |
|---|---|---|---|
| Create an account, complete Part 1 of Form 8957, and electronically sign and submit registration form | Choose Access Code and system will assign FATCA ID, complete Part 1 of Form 8957, and electronically sign and submit registration form | Enter online system with FATCA ID and Temporary Access Code, create new Access Code, and electronically sign and submit registration form | Create an account, choose Access Code, enter online system with FATCA ID, and electronically sign and submit registration form |
Deadline
The deadline for FIs to register for FATCA is January 1, 2014. Failure to comply with this requirement may result in penalties and fines.
For more information on FATCA registration, please visit the IRS website at www.irs.gov.