Tax & Accounting Blog

IRS Large Business & International Division Issues New Rules Governing Information Document Requests in Examinations

IRS Large Business & International Division Issues New Rules Governing Information Document Requests in Examinations

The IRS Large Business and International Division has announced that all Information Document Requests (lDRs) issued after June 30, 2013, must comply with certain new principles. If the new rules are not followed, IDRs will not have effect. Moreover, any existing Memorandum of Understanding relating to IDR management that does not comply with the principles … Read More

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Alert: IRS Announces Postponement from January 1 to July 1 for Many Items of FATCA Compliance

Notice 2013-43, an advance copy of which was released today, revises the timeline set by the FATCA final regulations for certain elements of due diligence, tax withholding, and reporting under Chapter 4 of the Internal Revenue Code, the Foreign Account Tax Compliance Act known as FATCA. Notice 2013-43 will be officially published on July … Read More

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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

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

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