Tax & Accounting Blog

Understanding FATCA (Foreign Account Tax Compliance Act)

Understanding FATCA (Foreign Account Tax Compliance Act)

The Foreign Account Tax Compliance Act (FATCA) imposes an additional 30% withholding tax on certain U.S. source payments made to “foreign financial institutions” (“FFIs”) and “non-financial foreign entities” (“NFFEs”) that refuse to disclose information to the IRS about U.S. investors, even if those investors hold only non-U.S. assets. Due diligence requirements for identifying new and … Read More

Want Proof of Mailing to the IRS on Time?

Want Proof of Mailing to the IRS on Time?

Don’t Rely on USPS First Class, Priority Mail or Delivery Confirmation Service Did you know that the only ways to establish prima facie evidence of delivery of documents that have a filing deadline prescribed by the Internal Revenue laws are the delivery methods that are specifically authorized in the tax regulations for timely mailing as … Read More

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What Is a MOU in Relation to Electronic Forms W-8 and W-9?

A Memorandum of Understanding (MOU) is a document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create … Read More

IRS Agrees to the Use of a Substitute W-8BEN for Internal Revenue Code Section 6050W

IRS Agrees to the Use of a Substitute W-8BEN for Internal Revenue Code Section 6050W

IRS Notice 2011-71 simplifies payee documentation rules for payments from an offshore payer settled to an offshore account and permits substitute forms in lieu of Form W-8BEN. Background of Section 6050W Section 6050W — added to the Code by the Housing Assistance Tax Act of 2008 (Pub. L. No. 110-289) — requires annual information returns … Read More

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Form 1099-K and I.R.C. Section 6050W Questions and Answers in an Online IRS FAQ

The IRS offers 30 questions and answers at http://www.irs.gov/pub/irs-utl/irdm_section_6050w_faqs_7_23_11.pdf to help explain who has an obligation to file information returns for 2011 under the rules for Section 6050W of the Internal Revenue Code (I.R.C.), and when and how to file those new Form 1099-K information returns. If you are one of the many Tax, Operations, and Accounts … Read More

Banks “Starting to Panic” over FATCA

Banks “Starting to Panic” over FATCA

Risk.net recently released an article stating that banks are now starting to panic over FATCA. According to the European Banking Federation (EBF) and the Institute of International Bankers (IIB), it has been estimated that large banks will have to spend in the region of $250 million each to contact clients and overhaul computer systems … Read More