Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, June 17, 2014

IRS Issues Final FATCA Regulations


In January of last year, the Internal Revenue Service (IRS) published final regulations under the Foreign Account Tax Compliance Act (FATCA).  FATCA intends to make it more difficult for U.S. taxpayers to conceal assets held in offshore accounts by imposing significant reporting obligations on both non-U.S. foreign financial institutions (FFIs) and U.S. taxpayers holding foreign financial accounts. 

In March 2014, the IRS issued the final version of Form W-8BEN-E, which allows certain non-U.S. retirement plans to claim exemption from the reporting and withholding requirements of FATCA.  After the release of the Form, the IRS published IRS Notice 2014-33 announcing that it will treat calendar years 2014 and 2015 as a transition period for FATCA compliance.  Thus, taxpayers must ensure good-faith compliance with the due diligence reporting and withholding provisions of FATCA. 

The final form W-8BEN-E retains the exemptions for broad participation retirement plans, treaty-qualified retirement plans, 401(a)-type plans and investment vehicles designed exclusively for retirement plans.  However, the IRS has not yet published the instructions corresponding to the final Form W-8BEN-E.  Before instructions are issued, it is important that plans sponsors confirm that their non-U.S. retirement plans are exempt from FATCA. 

See Nancy Gerrie, Andrew Liazos, Patrick Ryan, and Todd Soloman, Non-U.S. Retirement Plans Must Comply With Or Claim Exemption From FATCA by July 1, Mondaq, June 13, 2014. 


Estate Planning - Generally, Income Tax, New Legislation, Non-Probate Assets | Permalink

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