Global Information Reporting
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. Deloitte’s Global Information Reporting and Withholding group can assist with compliance in this area.
How we help
Through our range of services and the experience of our team, we can help you analyze and address potential exposure to tax compliance risk, as well as with related tax controversies. In addition, we can analyze your systems to address gaps in information gathering and other processes that are necessary to produce information required for US tax withholding and reporting on an accurate and timely basis.
IRS Foreign Payments Practice developments
The Internal Revenue Service (IRS) announced its intentions for a realignment of its foreign payments audit oversight activities in 2012 and began discussing the new structure in various professional forums during 2013. A new Foreign Payments Practice division and its impact on compliance for withholding agents was described by Theodore D. Setzer, the Program Manager for the IRS’s Foreign Payments Practice and other IRS officials at these 2013 forums.
The Foreign Payments Practice is an integrated withholding tax program within the IRS’s Large Business and International (LB&I) International Business Compliance (IBC) division. Organizationally, the IRS formation of a withholding practice within the division is intended to implement a better audit approach relating to withholdings.
Global Information Reporting and Withholding Evaluations for IRC Section 6050W
Internal Revenue Code (IRC) Section 6050W requires certain companies to file information returns, Form 1099-K, and report payment card transactions, including debit, credit, gift cards, 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 growing need for Compliance Technology
The Internal Revenue Service (IRS) is expanding information reporting and withholding requirements, including an increased focus on U.S. source income for foreign persons—now a Tier 1 tax examination issue. How can technology support the increasingly complex compliance process?
In this report, Deloitte discusses the evolving tax information and reporting landscape and reviews the current compliance environment and common compliance issues. It also shares practical tips for addressing these issues and reviews processes and technologies that exist to help manage compliance.
The report also includes responses to polling questions posed to executives during a Dbriefs webcast on how their organizations currently handle requirements when it comes to information reporting and areas of most interest to further use technology in the information reporting process.
Global Information Reporting Evaluations for FATCA
The Foreign Account Tax Compliance Act (FATCA) is a new chapter in the U.S. Internal Revenue Code. Chapter 4 was added by the Hiring Incentives to Restore Employment (HIRE) Act. It seeks to identify U.S. taxpayers with accounts at Foreign Financial Institutions (FFIs) and to enforce reporting of those accounts through withholding. Through our range of services and the experience of our national team, we can help you analyze potential exposure to tax compliance risk and explore ways to address it.
Deloitte’s Global Information Reporting and Withholding (GIR) group can assist you in managing the new challenges that may result from the Internal Revenue Service’s (IRS’s) increased scrutiny of U.S. accounts and foreign withholding under FATCA.
For more information, visit our FATCA pages.