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Perspectives

Global Information Reporting (GIR)

Service Offerings

Increased global transparency of account information presents unique challenges and requires a global, scalable solution. By reducing manual tasks and addressing risks, Deloitte’s GIR team can provide strategic value to clients.

Section 871(m) impacts

On September 17, 2015 the US Department of the Treasury and the IRS released final section 871(m) regulations under the Internal Revenue Code. The regulations expand the scope of withholding on US-sourced dividend equivalents paid to non-US holders of equity linked instruments.

Learn more about how 871(m) impacts the tax operations lifecycle and how the impact is defined by the role played by the parties in a transaction.

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FATCA

Deloitte’s global FATCA practice is comprised of professionals focused on helping financial institutions worldwide address the issues arising from FATCA. FATCA, a US law, may be in conflict with local laws and regulations, impacting entities outside of the US and departments and functions outside of tax. To address FATCA, a strong team with knowledge and experience across multiple disciplines is required. Deloitte provides an end-to-end solution with our global Consulting, Anti-Money Laundering/Know Your Customer, and Tax Matter specialists.

Our professional services include risk and impact assessment, operations and technology change implementation, and business readiness assessment—critical areas to addressing FATCA. We are currently working with other global institutions on their FATCA initiatives, and we have an expansive network of global FATCA specialists who can assist your organization as well.

Download the attached PDFs for industry specific information, or visit our main FATCA page for more information.

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Information reporting & withholding (IRW) advisory

Tax regulators continue to focus heavily on organizations’ procedures to address withholding and reporting requirements. Increased penalties and enforcement efforts necessitate reevaluation of policies and practices. Organizations acting as withholding agents are required to collect documentation, validate tax forms, substantiate payment types and sources and complete applicable withholding and reporting. With the significant changes to the W-8 Series and the additional requirements arising from FATCA, withholding agents are faced with new and unprecedented challenges. Deloitte offers expertise and resources necessary to address these challenges for your organization.

Deloitte’s Global Information Reporting (GIR) practice is comprised of professionals with extensive tax technical knowledge and experience with process change, technology, solution implementation and project management. Our Information Reporting and Withholding (IRW) Advisory Services will help you analyze the impacts and implement solutions for all issues arising under Chapters 3, 4 (FATCA) and 61 of the Internal Revenue Code, including:

  • Document remediation
  • Vendor Payables tax processes
  • Royalties
  • Section 871(m) 
  • Audit Support
  • Platforms and marketplaces
  • Freight costs

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Information reporting (IR) outsourcing

Required information reporting activities, such as (1) the validation of the W-8 / W-9 series Tax Forms and (2) 1042-S / 1099 reporting, can be challenging for organizations with limited information reporting resources. Under Chapters 3, 4, and 61 of the Internal Revenue Code, the collected Tax Forms (W-8 Series and W-9) and attached statements must be initially validated and potentially re-solicited and re-validated at a later date. In addition, the determination must be made concerning whether withholding and reporting of the payment made to the payee is required. For organizations for whom this is not a core competency, completing these tasks in an accurate manner may be challenging.

Deloitte’s Global Information Reporting (GIR) practice offers both the expertise and necessary resources to efficiently complete these functions on behalf of our clients.

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Report of Foreign Bank and Financial Accounts (FBAR)

Individuals and entities that have a financial interest or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account exceeding certain thresholds, may be required to report the account annually to the Department of Treasury by electronically filing a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts.

How will FBAR impact your organization and your employees? The answer depends on the types of accounts held outside of the US, the account balances of those accounts, and whether any exceptions to the reporting requirement apply. Deloitte has substantial experience in navigating these challenges with other organizations and can assist your organization to do the same. Download the attached PDF for more information.

July 31, 2015 FBAR ALERT: The President signed H.R. 3236, the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (the Act), which contains important changes to the due dates for the FinCEN Report 114 (relating to Report of Foreign Bank and Financial Accounts or FBAR), as well as other income tax returns. The Act also makes changes to the extension periods allowed for such filings. Generally, the effective date of the changes will affect filings beginning after December 31, 2015.

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Section 6050W: Information reporting of payments

Internal Revenue Code (IRC) Section 6050W requires certain companies to file information returns—Forms 1099-K—and report payment card transactions, including debit, credit, gift, and flexible spending account cards, as well as third-party network transactions on a gross payment basis. Given the time frame to evaluate processes, procedures, and system capabilities and the potential for penalties, Section 6050W compliance has become an increasingly urgent issue.

How is your organization affected by Section 6050W? The answer depends on two key dimensions: an organization’s internal structure and its role in the payment transaction stream. The analysis of these dimensions is a complex challenge with nuanced requirements and numerous exceptions. Deloitte, having assisted a number of organizations address these challenges, is ready and able to help your organization address its unique Section 6050W needs.

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Latest GIR Developments

The focus of the Internal Revenue Service on certain types of US income tax withholding indicates an enhanced scrutiny and potential exposure for organizations’ US tax withholding and information reporting across various industries.

View publications and announcements specific to GIR.

  • November 5, 2018: The IRS issued a bulletin reminding taxpayers with expiring Individual Taxpayer Identification Numbers (ITINs) to complete the renewal process as soon as possible to avoid refund and processing delays in 2019. The requirement to renew ITINs was established as part of the Protecting Americans from Tax Hikes (PATH) Act, which was enacted in December 2015.
  • September 20, 2018: The IRS released Notice 2018-72, announcing they intend to amend the section 871(m) regulations to delay the effective/applicability date of certain rules in those final regulations. Notice 2018-72 also extends the phase-in period provided in Notice 2016-76 for certain provisions of the section 871(m) regulations and permits withholding agents to apply the transition rules from Notice 2010-46 through 2020.
  • May 31, 2018: The US Department of the Treasury (Treasury) published proposed regulations (Proposed Regulations) providing amendments to the rules on electronic filing of information returns. The Proposed Regulations would require that all information returns, regardless of type, be taken into account when determining whether a taxpayer meets the 250 return threshold that triggers the electronic filing requirement. The Proposed Regulations also would obligate any taxpayer required to file information returns electronically to file corrected information returns electronically, regardless of the number of corrected information returns being filed.
  • January 1, 2018: The legislation (P.L. 115-97) commonly referred to as the 2017 Tax Reform Act (the Act) was signed into law by President Trump on December 22, 2017. Portions of the new law change withholding tax rates, effective January 1, 2018, and implement new withholding requirements.

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Latest FATCA and CRS developments

Below are selected publications from the Internal Revenue Service (IRS) and Treasury department providing guidance regarding Foreign Account Tax Compliance Act (FATCA) and selected publications from the Organization for Economic Cooperation and Development (OECD) regarding the Common Reporting Standard (CRS).

To view all posted publications: Click here for FATCA and click here for CRS.

  • December 14, 2018: The Internal Revenue Service (IRS) and the Department of the Treasury (Treasury) issued proposed regulations reducing the burden under Chapter 4 (FATCA) and Chapter 3 of the Internal Revenue Code (Code). The proposed rules eliminate withholding on payments of gross proceeds and certain insurance premiums, defer withholding on foreign passthru payments, provide additional guidance on certain due diligence requirements of withholding agents, clarify procedures for refunds and credits of amounts withheld, and clarify the definition of investment entities. The full text of the proposed regulations may be found here: Regulations Reducing Burden under FATCA and Chapter 3. Download includes a brief summary of the key points under the Proposed Regulations.
  • December 13, 2018: The Internal Revenue Service (IRS) issued new frequently asked questions (FAQs) in the FATCA Certifications section of the FATCA FAQs page. One of these FAQs (FAQ15), published on November 30, 2018, explains why the FATCA Registration System (System) does not retain certain information that the responsible officer (RO) saves online during the initial certification session for the later review and submission. Another FAQ (FAQ16) that the IRS published on December 6, 2018, explains how the RO should submit the certification if the FFI agreement was terminated upon cancelation of the FIs account in the System and the underlying entity no longer has a GIIN. The IRS published two other FATCA certification related FAQs (FAQ17 and FAQ18) on December 12, 2018. FAQ17 explains how the RO has to submit a FATCA certification only on behalf of those branches that have a certification requirement where the entity has registered branches in multiple jurisdictions. FAQ18 explains how the RO should submit a certification for an entity that has multiple approved branches where only some of the branches have a material failure or event of default.
  • December 4, 2018: After November 30, 2018, taxpayers with FATCA filing obligations must download the new IRS public key from IDES to file FATCA reports. Taxpayers intending to purchase a new digital certificate or replacing one should note that IDES only recognizes and accepts digital certificates issued by IRS approved Certificate Authorities. The IRS has also issued a bulletin reminding taxpayers about the FATCA certification deadline. In general, for the certification period ending December 31, 2017, FATCA certifications are due no later than December 15, 2018. For trustees of trustee-documented trusts and sponsoring entities, the certification deadline is March 31, 2019.
  • November 16, 2018: The IRS has recently published a series of new FAQs on its FATCA–FAQs General page and on its FATCA–Registration System FAQs page.
  • November 15, 2018: The Internal Revenue Service (IRS) issued Revenue Procedure 2018-57 setting out the tax year 2019 annual inflation adjustments (among others) to the penalties set out in section 6721 (failure to file correct information returns) and section 6722 (failure to furnish correct payee statements).

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