At the EEI 24th Annual Forum on International Tax Withholding and Information Reporting in New York on June 5-6, members of the U.S. and foreign financial industries met with key representatives of the IRS to explore the latest on FATCA regulations and implementation. Requirements from the USFI perspective were examined along with those from the FFI perspective.
Steven Musher, IRS Associate Chief Counsel (International), gave insight into the type and quantity of FATCA comments they have received on the Proposed Regs issued in February. One example is the issue of handling FFIs, such as family trusts with multiple tiers of ownership. These entity types have generated a large number of comments and he noted that the guidance has not yet been determined. The attendees used every Q&A session to request clarification of areas that are unclear or that impose undue levels of difficulty in the reality of implementation.
The overriding theme heard over and over again was that there is insufficient time for the industry to make the system and procedural changes required to meet the effective dates. USFIs noted that the requirement for implementing new account opening procedures by January 1, 2013 is unrealistic since the final W-8 forms won’t be finalized until December 2012. The forms may have new data elements that will have to be added to their account information records. They requested a time period of 12-18 months after final regulations and final forms are issued. At a minimum, they stressed that the January 1 date should be pushed back to match the July 1 date that is imposed on FFIs for opening new accounts.