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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.

  • 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.
  • December 29, 2017 United States tax alert: Notice 2018-08 suspends withholding under Section 1446(f) on sales or dispositions of publicly traded partnership interests pending further guidance.
  • December 22, 2017: The IRS released Notice 2018-05 under which withholding agents may apply transition rules of Notice 2010-46, Part III, (Transition Rules) for US source substitute dividend payments made in 2018 and 2019 pursuant to a securities lending or stock sale repurchase agreement. Final regulations covering the US source treatment of substitute dividends were issued in 1997 in T.D. 8735, 62 FR 53498-53502, Oct. 14, 1997 and remain in force under section 871(m). Notice 97-66, 1997-2 C.B. 328 which suspended the 1997 final regulations was obsoleted in Notice 2010-46, Section 1.B., and reinstated the final 1997 regulations for the US source and dividend characterization of substitute dividend payments made on or after September 14, 2010.
  • December 12, 2017: Vermont and Massachusetts have new rules for Form 1099-K filings effective for payments made beginning January 1, 2017.
  • August 4, 2017: Treasury and the IRS issued Notice 2017-42, “Extension of the Phase-in Period for the Enforcement and Administration of Section 871(m)” (the Notice). The Notice essentially extends certain aspects of the final and temporary regulations under Internal Revenue Code section 871(m) published on September 15, 2015 in the Federal Register as TD 9734, 80 FR 56866 (the Final Regulations). Notice 2016-76, 2016-51 I.R.B. 834, published on December 19, 2016, provided phased-in application of certain parts of the Final Regulations to provide taxpayers additional time for administration of section 871(m) treatment of non-delta one equity derivative contracts and to coordinate such treatment with the requirements of the new Qualified Intermediary (QI) agreement.

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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

  • September 26, 2018: The IRS issued a bulletin stating that the FATCA registration must always be updated with the current name and email address of the responsible officer (RO) and point of contact (POC) immediately upon the occurrence of any change in these details.
  • September 19, 2018: The IRS added a new FAQ 13 to its FATCA General FAQs web page about FATCA certification due dates. This FAQ clarifies that for the certification period ending December 31, 2017, FATCA certifications are generally due no later than December 15, 2018; however, for sponsoring entities and trustees of a trustee-documented trusts, the certifications are due no later than March 31, 2019.
  • September 9, 2018: The IRS released a reminder that taxpayers have until September 28, 2018, to apply to participate in the ‘Offshore Voluntary Disclosure Program’ (OVDP). After September 28, 2018, US taxpayers with undisclosed offshore accounts will no longer be able to disclose them under the OVDP. The IRS has said that the IRS will still hold taxpayers with undisclosed offshore accounts accountable once the program closes and has promised to provide a revised pathway for taxpayers who may have committed criminal acts to voluntarily disclose their past actions and come into compliance with the tax system. The specifics of this ‘revised pathway’ have not been disclosed. The IRS published Revenue Procedure 2018-36 which provides a list of jurisdictions in which the residents are reportable under Treas. Reg. §§ 1.6049-4(b)(5) and 1.6049-8(a) of the Income Tax Regulations when they receive payments of certain deposit interest on or after January 1, 2019. The revenue procedure also provides an updated list of the jurisdictions with which the IRS will exchange this information.
  • August 31, 2018: The IRS published Revenue Procedure 2018-36 which provides a list of jurisdictions in which the residents are reportable under Treas. Reg. §§ 1.6049-4(b)(5) and 1.6049-8(a) of the Income Tax Regulations when they receive payments of certain deposit interest on or after January 1, 2019. The revenue procedure also provides an updated list of the jurisdictions with which the IRS will exchange this information.
  • August 21, 2018: The IRS published new FAQ 17 (FAQ) on FATCA–FAQs general page that clarifies the certification requirement under section 10.03 and Appendix I of the QI Agreement, when the QI’s RO establishes that there has been an event of default described in section 11.06 of the QI Agreement or a material failure described in section 10.03(b) of the QI Agreement before the QI’s certification date. The IRS also issued a final reminder about the certification due dates for QIs, withholding foreign partnerships (WPs) and withholding foreign trusts (WTs).

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