On June 7, 2011, the Institute submitted comments to the IRS regarding Notice 2011-34 and the Foreign Account Tax Compliance Act, urging the government to issue additional guidance for affected persons that are not foreign financial institutions (FFIs). TEI is concerned that the general lack of interim guidance for other persons affected by FATCA, such as non-financial foreign entities (NFFEs), U.S. financial institutions (USFIs), withholding agents, and U.S. branches of FFIs, will negatively affect their ability to comply with FATCA when it becomes effective, which will in turn hinder administration of those provisions.
Among other things, TEI's comments urged Treasury and the Service to issue interim guidance and detail the potential exceptions to FATCA discussed in Notice 2010-60 for holding companies, financing affiliates of non-financial groups, and retirement plans. The Institute also recommended that the government detail exceptions to the definition of "withholdable payment" for payments made in the ordinary course of the payor’s trade or business and payments made to NFFEs engaged in an active trade or business. In addition, TEI asked for guidance for USFIs, U.S. branches of FFIs, and for withholding agents generally. Finally, TEI recommended that the effective date of FATCA be delayed to allow affected entities additional time to properly comply with the new provisions.
Original Submission
Magazine Article
TEI previously filed comments with respect to FATCA and Notice 2010-60 in October 2010. Those comments can be found here.