The IRS's Weak Tea
Questions abound on the functioning of the IRS's Fatca compliance systems and identification lists
![michael-shashoua-waters michael-shashoua-waters](/sites/default/files/styles/landscape_750_463/public/import/IMG/317/167317/michael-shashoua-waters.JPG.webp?h=acfe3244&itok=ceJMABf4)
I covered Foreign Account Tax Compliance Act (Fatca) developments in this space just two weeks ago, and try to keep the subject matter in these columns varied, but a big development with the US foreign tax withholding reporting law that Inside Reference Data covered this past week invites commentary.
It appears that the first step of Fatca—the registration of Global Intermediary Identification Numbers (GIINs) for foreign financial firms, which was thought to be well on its way by the middle of 2014 with a July deadline for one class of firms, and absolutely complete by January 1 for the remaining firms—is not as complete as it seemed.
Thousands of GIINs (out of about 140,000 in all so far) have apparently been invalidated or replaced each month, for the past five months. So firms trying to complete required reporting under Fatca, especially with deadlines coming in March and September, cannot rely on the first list of GIINs they obtained, or any such list that is too old, for directing payments.
It's unclear whether the Fatca foreign financial institution search tool on the US Internal Revenue Service website—which states that it is updated monthly, with its most recent update being December 23—is functional or being updated often enough to address or stop confusion about out-of-date GIIN numbers.
But considering that the IRS recently launched another tool for Fatca compliance—the International Data Exchange Service—and there is not yet a clear picture as to how well that works, it makes you wonder if the agency has a sufficient handle on what is required to administer the Fatca law.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
Bloomberg, industry bodies push back on Cboe’s proposed OEMS rule change
Some industry bodies disagree with the options exchange’s proposal to carve its Silexx OEMS out of the SEC’s definition of an exchange facility and place it into a separate business line.
Zeros and ones: Industry contemplates T+0 as the next step
With the North American transition to T+1 settlement complete, same-day settlement could be the next goalpost set, though skeptics are many.
The IMD Wrap: Déjà vu as exchange data industry weighs its options
Max highlights some of WatersTechnology’s recent reporting on data costs and capacity issues facing the options industry, and asks, haven’t we seen this before somewhere?
FRTB data quality issues persist amid shifting implementation dates
Banks are finding market and reference data challenges posed by the FRTB’s standardized model tricky, compounded by uncertainty over when the regulation will take effect.
Cboe pushes rule change to make way for proprietary Opra alternatives
As US options data has grown in volume and cost, Cboe says changing the public feed's governing document would make way for more competition from private alternatives, including its Cboe One Options Feed, launched in 2023.
Regulators urged to promote cyber security investment
Public interest in stopping cyber attacks that could trigger bank runs, says Bundesbank researcher
Hong Kong looks for digital response to trade reporting burden
New swaps reporting framework will include more fields than requirements in US or Singapore.
Big questions remain over Dora’s critical third parties
Industry looks for clarity on critical third parties ahead of July 17 regulatory technical standards for the EU’s Digital Operational Resilience Act.