The FATCA International Data Exchange Service (IDES) is migrating to an updated system and vendor beginning at 8 am EDT on June 14, 2024, through 11:59 pm EDT on June 20, 2024. During this time, the IDES and the IDES Help Desk will be unavailable. The system will be back up and fully operational at 9 am EDT on June 21, 2024. (FATCA News & Information 2024-11, 6/13/2024)
FATCA.
The Foreign Account Tax Compliance Act (FATCA) imposes a 30% withholding tax on certain US source payments made to foreign financial institutions (FFIs) and non-financial foreign entities (NFFEs) unless they meet specific reporting, compliance, and withholding requirements related to identifying US-owned accounts.
An FFI can avoid being subject to FATCA withholding by entering into an agreement with the IRS to report information on its US-owned accounts and to withhold tax on certain payments to non-compliant account holders and FFIs.
NFFEs are not subject to FATCA withholding if they certify they do not have any substantial US owners or identify any substantial US owners to the withholding agent.
IDES.
The IDES is an IRS system that is used to facilitate the exchange of FATCA data with foreign tax administrators.
New system requires password reset.
IDES users will be required to reset their passwords when first logging into the new system after June 20. Users will need to recall the answers to their security challenge questions to successfully reset their password.
If users do not recall the answers to their security questions, they will need to work with the IDES Help Desk to reset their password.
According to the IRS, users should update their passwords and profile information before the enrollment cutoff at 5 pm EDT on June 26, 2024.
Open system testing.
The IRS encourages all IDES users to participate in the open system testing, which will begin on July 1, 2024, and end on July 26, 2024.
The testing session will only be open to users that completed IDES enrollment by 5 pm EDT on June 26, 2024. A completed IDES enrollment means the IDES account is active with a valid Digital Certificate attached.
On or before June 28, 2024, all eligible testers will receive an e-mail with specific instructions to connect to the test site. The test environment will only support the FATCA XML Schema v2.0, Notification XML Schema v2.5, and test data document types such as FATCA11 and FATCA12.
All testing sessions will be announced on the IDES Testing Schedule web page. For more information on testing, sample files, and FAQs, visit the IDES Resources web page. If you need immediate assistance, contact the IDES Help Desk.
Note. Production files submitted to the test environment will not be processed. Users should not submit production files to the test environment.
The IDES homepage has more information about the migration.
For more information about the IDES, see Checkpoint’s Federal Tax Coordinator ¶ S-6208.2.
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