Tax & Accounting Blog

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Japan signs FATCA Implementation Agreement

The U.S. Department of Treasury has announced a statement of mutual cooperation and understanding for implementation of the U.S. Foreign Account Tax Compliance Act (FATCA). The statements will serve as a FATCA intergovernmental agreement (IGA) following the Treasury Department’s Model 2 structure for direct reporting by Japanese financial institutions to the U.S. Internal Revenue Service. … Read More

FinCEN Electronic Filing of Suspicious Activity Reports and Currency Transaction Reports

FinCEN Electronic Filing of Suspicious Activity Reports and Currency Transaction Reports

The Financial Crimes Enforcement Network (FinCEN) has been alerting institutions that they are now required to use the new FinCEN electronic reports on-line at the BSA E-Filing System. Financial institutions that continue to file Suspicious Activity Reports (SARs) or Currency Transaction Reports (CTRs) on paper will fail to meet current Bank Secrecy Act reporting requirements … Read More

Why Nature of Income Paid to Foreign Vendors Matters Part 2 – Source of Income Rules

Why Nature of Income Paid to Foreign Vendors Matters Part 2 – Source of Income Rules

U.S. sourcing rules vary with the type of income being paid, as do U.S. rules for a lower rate of or exemption from withholding. In addition, a payer must correctly record the income code on Form 1042-S so that the foreign vendor may submit a correct U.S. tax return, assuming one is required. Therefore, … Read More

Ask the Expert: California Withholding on 1099-MISC Reportable Payment

Ask the Expert: California Withholding on 1099-MISC Reportable Payment

Question: A company located in California says, “Some questions are still coming up about compliance with the California 7% income tax withholding requirement on payments we make to out-of-state artists for services here in California. If they have a California resident agent and our check is payable to the agent, does that eliminate the withholding … Read More

Recent Developments in FATCA Intergovernmental Agreements and Implementation

Recent Developments in FATCA Intergovernmental Agreements and Implementation

The United Kingdom released Guidance Notes and draft regulations covering internal UK administration of rules for identification and certification of financial institutions, classification and reporting of accounts, and reporting of certain accountholder information under the intergovernmental agreement (IGA) with the United States for implementation of the U.S. Foreign Account Tax Compliance Act. Under the … Read More

Why Nature of Income Matters on Payments to Foreign Vendors

Why Nature of Income Matters on Payments to Foreign Vendors

U.S. organizations making payments to vendors must determine whether the vendor is a U.S. person or a non-U.S. person because only payments to U.S. persons (actual or presumed) are covered by Form 1099 rules and procedures. The term U.S. persons includes U.S. citizens, resident aliens [based on IRC §7701(b) tax residency rules], and domestic entities. … Read More