Regulations Relating to Information Reporting by Foreign Financial Institutions and Withholding on Certain Payments to Foreign Financial Institutions and Other Foreign Entities; Correction, 29728-29730 [2017-13632]
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29728
Federal Register / Vol. 82, No. 125 / Friday, June 30, 2017 / Rules and Regulations
dealing with reliable association of a
payment with documentation.
(3) Standards of knowledge. A payor
may not rely on a withholding
certificate or documentary evidence
described in paragraph (c)(1) or (4) of
this section if it has actual knowledge or
reason to know that any information or
certification stated in the certificate or
documentary evidence is unreliable. A
payor has reason to know that
information or certifications are
unreliable only if the payor would have
reason to know under the provisions of
§ 1.1441–7(b)(2) and (3) that the
information and certifications provided
on the certificate or in the documentary
evidence are unreliable or, in the case
of a Form W–9 (or an acceptable
substitute), it cannot reasonably rely on
the documentation as set forth in
§ 31.3406(h)–3(e) of this chapter (see the
information and certification described
in § 31.3406(h)–3(e)(2)(i) through (iv) of
this chapter that are required in order
for a payor reasonably to rely on a Form
W–9). The provisions of § 1.1441–7(b)(2)
and (3) shall apply for purposes of this
paragraph (c)(3) irrespective of the type
of income to which § 1.1441–7(b)(2) is
otherwise limited. The exemptions from
reporting described in paragraphs
(b)(10) and (11) of this section shall not
apply if the payor has actual knowledge
that the payee is a U.S. person who is
not an exempt recipient.
(4) Special documentation rules for
certain payments. This paragraph (c)(4)
modifies the provisions of paragraph
(c)(1) of this section for payments of
amounts that are not subject to
withholding under chapter 3 of the
Code, other than amounts described in
paragraph (d)(3)(iii) of this section
(dealing with U.S. short-term OID and
U.S. source deposit interest described in
section 871(i)(2)(A) or 881(d)(3)).
Amounts are not subject to withholding
under chapter 3 of the Code if they are
not included in the definition of
amounts subject to withholding under
§ 1.1441–2(a) (e.g., deposit interest with
foreign branches of U.S. banks, foreign
source income, or broker proceeds). A
payor may rely upon documentation in
lieu of documentary evidence (as
described in paragraph (c)(1) of this
section) or a written statement (as
defined in § 1.1471–1(b)(150)) or
another statement to the extent
permitted in paragraphs (c)(4)(i) through
(iii) of this section, until the payor
knows or has reason to know of a
change in circumstance that makes the
documentation unreliable or incorrect
(as defined in § 1.1441–1(e)) when the
payor does not have customer
information for the payee that includes
any of the U.S. indicia described in
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§ 1.1471–3(c)(6)(ii)(C)(1). Further, a
payor may maintain such
documentation or documentary
evidence as required in paragraph
(c)(4)(iv) of this section.
(i) Statement in lieu of documentary
evidence with respect to accounts. If
under the local laws, regulations, or
practices of a country in which an
account is maintained, it is not
customary to obtain documentary
evidence described in paragraph (c)(1)
of this section with respect to the type
of account, the payor may, instead of
obtaining a beneficial owner
withholding certificate described in
§ 1.1441–1(e)(2)(i) or documentary
evidence described in paragraph (c)(1)
of this section, establish a payee’s
foreign status based on the statement
described in this paragraph (c)(4)(i) (or
such substitute statement as the Internal
Revenue Service may prescribe) made
on an account opening form. However,
see, also § 1.1471–4(c) or an applicable
IGA for additional documentation
requirements that may apply to a
participating FFI (including a reporting
Model 2 FFI) for determining the status
of its account holders for chapter 4
purposes. The statement referred to in
this paragraph (c)(4)(i) must appear near
the signature line and must state, ‘‘By
opening this account and signing below,
the account owner represents and
warrants that he/she/it is not a U.S.
person for purposes of U.S. Federal
income tax and that he/she/it is not
acting for, or on behalf of, a U.S. person.
A false statement or misrepresentation
of tax status by a U.S. person could lead
to penalties under U.S. law. If your tax
status changes and you become a U.S.
citizen or a resident, you must notify us
within 30 days.’’ Additionally, a payor
may, instead of obtaining a beneficial
owner withholding certificate described
in § 1.1441–1(e)(2)(i) or § 1.1471–
3(c)(3)(ii) or documentary evidence
described in paragraph (c)(1) of this
section, establish a payee’s foreign
status based on a written statement
described in paragraph § 1.1471–
1(b)(150) to the extent a payor uses such
written statement to establish a payee’s
chapter 4 status and is permitted to use
the written statement under § 1.1471–
3(d) (by substituting the term ‘‘payor’’
for the term ‘‘withholding agent’’)
without any other documentary
evidence.
(ii) Documentation under IGA. A
payor that is a reporting Model 1 FFI or
reporting Model 2 FFI may rely upon
documentation or information
establishing a payee’s status that is
permitted under an applicable IGA for
determining whether the account of the
payee is other than a U.S. account and
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regardless of whether such
documentation or certification is
described in paragraph (c)(1) of this
section or § 1.1441–1(e)(2).
(iii) Maintenance of documentation
and written statement. A payor
maintains documentation if it either
maintains the documentary evidence as
described in paragraph (c)(1) of this
section or retains a record of the
documentary evidence reviewed if the
payor is not required to retain copies of
the documentation pursuant to the
payor’s AML due diligence (as defined
in § 1.1471–1(b)(4)). A payor retains a
record of documentary evidence
reviewed by noting in its records the
type of documentation reviewed, the
date the document was reviewed, the
document’s identification number (if
any), and whether such documentation
contained any U.S. indicia described in
§ 1.1441–7(b)(8). Any statement
described in paragraph (c)(4)(i) of this
section, must be retained in accordance
with § 1.1471–3(c)(6)(iii).
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Martin V. Franks,
Chief, Publications and Regulations Branch,
Legal Processing Division, Associate Chief
Counsel (Procedure and Administration).
[FR Doc. 2017–13634 Filed 6–29–17; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9809]
RIN 1545–BL72
RIN 1545–BN79
Regulations Relating to Information
Reporting by Foreign Financial
Institutions and Withholding on
Certain Payments to Foreign Financial
Institutions and Other Foreign Entities;
Correction
Internal Revenue Service (IRS),
Treasury.
ACTION: Correcting amendments.
AGENCY:
This document contains
corrections to final and temporary
regulations (TD 9809) that were
published in the Federal Register on
Friday, January 6, 2017 (82 FR 2124).
The final and temporary regulations
under chapter 4 of the Subtitle A
(sections 1471 through 1474) of the
Internal Revenue Code of 1986 (Code)
relate to information reporting by
foreign financial institutions (FFIs) with
respect to U.S. accounts and
SUMMARY:
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Federal Register / Vol. 82, No. 125 / Friday, June 30, 2017 / Rules and Regulations
withholding on certain payments to
FFIs and other foreign entities.
DATES: These corrections are effective
June 30, 2017 and are applicable
beginning January 6, 2017.
FOR FURTHER INFORMATION CONTACT:
Kamela Nelan at (202) 317–6942 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final and temporary regulations
(TD 9809) that are the subject of this
correction are under sections 1471
through 1474 of the Internal Revenue
Code.
Need for Correction
As published, the final and temporary
regulations (TD 9809) contain errors
which may prove to be misleading and
need to be clarified. Some portions of
TD 9809 could not be incorporated due
to inaccurate amendatory instructions.
Several of the correcting amendments to
TD 9809 are needed to clarify or correct
the results of inaccurate amendatory
instructions. These correcting
amendments also include the addition,
deletion, or modification of regulatory
language to clarify the relevant
provisions to meet their intended
purposes or for consistency with other
related provisions of these regulations.
The addition of final regulatory
language includes language that was
inadvertently removed in a prior
amendment to the final regulations.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Correction of Publication
Accordingly, 26 CFR part 1 is
corrected by making the following
correcting amendments:
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.1471–1T is amended
by revising the third sentence of
paragraph (b)(99) to read as follows:
■
§ 1.1471–1T Scope of chapter 4 and
definitions (temporary).
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(a) * * *
(2) * * *
(i) * * * Further, a withholding agent
is not required to withhold on a
payment that it can reliably associate
with documentation indicating that the
payee is a U.S. branch treated as a U.S.
person (as defined in § 1.1471–
1(b)(135)) or is a U.S. branch of an FFI
that is not treated as a U.S. person but
that applies the rules described in
§ 1.1471–4(d)(2)(iii)(C). * * *
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■ Par. 4. Section 1.1471–3 is amended
by revising paragraph (b)(3) to read as
follows:
§ 1.1471–3
Identification of payee.
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(b) * * *
(3) Determination of whether the
payment is made to a QI, WP, or WT.
A withholding agent may treat the
person who receives a payment as a QI,
WP, or WT if the withholding agent can
reliably associate the payment with a
valid Form W–8IMY, as described in
paragraph (c)(3)(iii) of this section, that
indicates that the person who receives
the payment is a QI, WP, or WT,
provides the person’s QI–EIN, WP–EIN,
or WT–EIN, and the person’s GIIN, if
applicable.
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■ Par. 5. Section 1.1471–4 is amended
by revising paragraph (d)(3)(ii)(E) and
adding a heading to paragraph (d)(7) to
read as follows:
FFI agreement.
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■
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(b) * * *
(99) * * * An address that is
provided subject to instructions to hold
all mail to that address must be
accompanied by certain documentary
evidence described in § 1.1441–
1(c)(38)(ii). * * *
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§ 1.1471–2 Requirement to deduct and
withhold tax on withholdable payments to
certain FFIs.
§ 1.1471–4
PART 1—INCOME TAXES
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Par. 3. Section 1.1471–2 is amended
by revising the third sentence of
paragraph (a)(2)(i) to read as follows:
■
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(d) * * *
(3) * * *
(ii) * * *
(E) Such other information as is
otherwise required to be reported under
this paragraph (d)(3) or in the form
described in paragraph (d)(3)(v) of this
section and its accompanying
instructions.
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(7) Special reporting rules with
respect to the 2014 and 2015 calendar
years—
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■ Par. 6. Section 1.1471–4T is amended
by revising paragraph (d)(2)(ii)(G)
introductory text to read as follows:
§ 1.1471–4T
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FFI agreement (temporary).
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29729
(d) * * *
(2) * * *
(ii) * * *
(G) Combined reporting on Form 8966
following merger or bulk acquisition. If
a participating FFI (successor) acquires
accounts of another participating FFI
(predecessor) in a merger or bulk
acquisition of accounts, the successor
may assume the predecessor’s
obligations to report the acquired
accounts under paragraph (d) of this
section with respect the calendar year in
which the merger or acquisition occurs
(acquisition year), provided that the
requirements in paragraphs
(d)(2)(ii)(G)(1) through (4) of this section
are satisfied. If the requirements of
paragraphs (d)(2)(ii)(G)(1) through (4) of
this section are not satisfied, both the
predecessor and the successor are
required to report the acquired accounts
for the portion of the acquisition year
that it maintains the account.
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■ Par. 7. Section 1.1471–5 is amended
by adding paragraph (f)(1)(i)(F)(3)(viii)
and revising paragraph (f)(2)(iii)(C) to
read as follows:
§ 1.1471–5 Definitions applicable to
section 1471.
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(f) * * *
(1) * * *
(i) * * *
(F) * * *
(3) * * *
(viii) Has not had its status as a
sponsoring entity revoked.
*
*
*
*
*
(2) * * *
(iii) * * *
(C) Twenty or fewer individuals own
all of the debt and equity interests in the
FFI (disregarding debt interests owned
by U.S. financial institutions,
participating FFIs, registered deemedcompliant FFIs, and certified deemedcompliant FFIs and equity interests
owned by an entity if that entity owns
100 percent of the equity interests in the
FFI and is itself a sponsored FFI under
this paragraph (f)(2)(iii)).
*
*
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*
■ Par. 8. Section 1.1474–1 is amended
by:
■ 1. Revising paragraphs (d)(4)(i)(C)(2)
and (3).
■ 2. Adding paragraph (d)(4)(ii)(C).
■ 3. Revising the heading of paragraph
(d)(4)(iii), and paragraphs (d)(4)(iii)(A)
and (B).
The revisions and addition read as
follows:
§ 1.1474–1 Liability for withheld tax and
withholding agent reporting.
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Federal Register / Vol. 82, No. 125 / Friday, June 30, 2017 / Rules and Regulations
(d) * * *
(4) * * *
(i) * * *
(C) * * *
(2) If the U.S. branch of an FFI is not
treated as a U.S. person and applies the
rules described in § 1.1471–
4(d)(2)(iii)(C) and provides the
withholding agent with a withholding
certificate that transmits information
regarding its reporting pools referenced
in paragraph (d)(4)(i)(B) of this section
or information regarding each recipient
that is an account holder or payee of the
U.S. branch, the withholding agent must
complete a separate Form 1042–S issued
to the U.S. branch for each such pool to
the extent required on the form and its
accompanying instructions or must
complete a separate Form 1042–S issued
to each recipient whose documentation
is associated with the U.S. branch’s
withholding certificate as described in
paragraph (d)(4)(ii)(A) of this section
and report the U.S. branch as an entity
not treated as a recipient; or
(3) If the U.S. branch of an FFI is not
treated as a U.S. person and applies the
rules described in § 1.1471–
4(d)(2)(iii)(C) to the extent it fails to
provide sufficient information regarding
its account holders or payees, the
withholding agent shall report the
recipient of the payment as an unknown
recipient to the extent recipient
information is not provided and report
the U.S. branch as provided in
paragraph (d)(4)(ii)(A) of this section for
an entity not treated as a recipient.
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*
(ii) * * *
(C) Disregarded entities. If a U.S.
withholding agent makes a payment to
a disregarded entity and receives a valid
withholding certificate or other
documentary evidence from the person
that is the single owner of such
disregarded entity, the withholding
agent must file a Form 1042–S treating
the single owner as the recipient in
accordance with the instructions to the
Form 1042–S.
(iii) Reporting by participating FFIs
and deemed-compliant FFIs (including
QIs, WPs, and WTs) and U.S. branches
of FFIs not treated as U.S. persons—(A)
In general. Except as otherwise
provided in paragraph (d)(4)(iii)(B)
(relating to NQIs, NWPs, NWTs, and
FFIs electing under section 1471(b)(3))
and § 1.1471–4(d)(2)(ii)(F) (relating to
transitional payee-specific reporting for
payments to nonparticipating FFIs), a
participating FFI or deemed-compliant
FFI (including a QI, WP, or WT), and a
U.S. branch of an FFI that is not treated
as a U.S. person that applies the rules
described in § 1.1471–4(d)(2)(iii)(C) that
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17:26 Jun 29, 2017
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makes a payment that is a chapter 4
reportable amount to a recalcitrant
account holder or nonparticipating FFI
must complete a Form 1042–S to report
such payments. A participating FFI or
registered deemed-compliant FFI
(including a QI, WP, or WT), and a U.S.
branch of an FFI that is not treated as
a U.S. person that applies the rules
described in § 1.1471–4(d)(2)(iii)(C) may
report in pools consisting of its
recalcitrant account holders and payees
that are nonparticipating FFIs. With
respect to recalcitrant account holders,
the FFI may report in pools consisting
of recalcitrant account holders within a
particular status described in § 1.1471–
4(d)(6) and within a particular income
code. Except as otherwise provided in
§ 1.1471–4(d)(2)(ii)(F), with respect to
payees that are nonparticipating FFIs,
the FFI may report in pools consisting
of one or more nonparticipating FFIs
that fall within a particular income code
and within a particular status code
described in the instructions to Form
1042–S. Alternatively, a participating
FFI or registered deemed-compliant FFI
(including a QI, WP, or WT) and a U.S.
branch of an FFI that is not treated as
a U.S. person that applies the rules
described in § 1.1471–4(d)(2)(iii)(C) may
(and a certified deemed-compliant FFI
is required to) perform payee-specific
reporting to report a chapter 4
reportable amount paid to a recalcitrant
account holder or a nonparticipating FFI
when withholding was applied (or
should have applied) to the payment.
(B) Special reporting requirements of
participating FFIs, deemed-compliant
FFIs, FFIs that make an election under
section 1471(b)(3), and U.S. branches of
FFIs not treated as U.S. persons. Except
as otherwise provided in § 1.1471–
4(d)(2)(ii)(F), a participating FFI or
deemed-compliant FFI that is an NQI,
NWP, or NWT, and a U.S. branch of an
FFI that is not treated as a U.S. person
that applies the rules described in
§ 1.1471–4(d)(2)(iii)(C) or an FFI that
has made an election under section
1471(b)(3) and has provided sufficient
information to its withholding agent to
withhold and report the payment is not
required to report the payment on Form
1042–S as described in paragraph
(d)(4)(iii)(A) of this section if the
payment is made to a nonparticipating
FFI or recalcitrant account holder and
its withholding agent has withheld the
correct amount of tax on such payment
and correctly reported the payment on
a Form 1042–S. Such FFI or branch is
required to report a payment, however,
when the FFI knows, or has reason to
know, that less than the required
amount has been withheld by the
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withholding agent on the payment or
the withholding agent has not correctly
reported the payment on Form 1042–S.
In such case, the FFI or branch must
report on Form 1042–S to the extent
required under paragraph (d)(4)(iii)(A)
of this section. See, however, § 1.1471–
4(d)(6) for the requirement to report
certain aggregate information regarding
accounts held by recalcitrant account
holders on Form 8966, ‘‘FATCA
Report,’’ regardless of whether
withholdable payments are made to
such accounts.
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Martin V. Franks,
Chief, Publications and Regulations Branch,
Legal Processing Division, Associate Chief
Counsel (Procedure and Administration).
[FR Doc. 2017–13632 Filed 6–29–17; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9819]
RIN 1545–BM06
Guidelines for the Streamlined Process
of Applying for Recognition of Section
501(c)(3) Status
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations and removal of
temporary regulations.
AGENCY:
This document contains final
regulations that allow the Commissioner
of Internal Revenue to adopt a
streamlined application process that
eligible organizations may use to apply
for recognition of tax-exempt status
under section 501(c)(3) of the Internal
Revenue Code (Code). The final
regulations affect organizations seeking
recognition of tax-exempt status under
section 501(c)(3).
DATES:
Effective Date: These regulations are
effective on June 30, 2017.
Applicability Dates: For dates of
applicability, see §§ 1.501(a)–1(f),
1.501(c)(3)–1(h), and 1.508–1(c).
FOR FURTHER INFORMATION CONTACT:
Peter A. Holiat at (202) 317–5800 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
Since 1969, section 508 of the Code
has required an organization seeking
tax-exempt status under section
501(c)(3), as a condition of its
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]]>Agencies
[Federal Register Volume 82, Number 125 (Friday, June 30, 2017)]
[Rules and Regulations]
[Pages 29728-29730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13632]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9809]
RIN 1545-BL72
RIN 1545-BN79
Regulations Relating to Information Reporting by Foreign
Financial Institutions and Withholding on Certain Payments to Foreign
Financial Institutions and Other Foreign Entities; Correction
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Correcting amendments.
-----------------------------------------------------------------------
SUMMARY: This document contains corrections to final and temporary
regulations (TD 9809) that were published in the Federal Register on
Friday, January 6, 2017 (82 FR 2124). The final and temporary
regulations under chapter 4 of the Subtitle A (sections 1471 through
1474) of the Internal Revenue Code of 1986 (Code) relate to information
reporting by foreign financial institutions (FFIs) with respect to U.S.
accounts and
[[Page 29729]]
withholding on certain payments to FFIs and other foreign entities.
DATES: These corrections are effective June 30, 2017 and are applicable
beginning January 6, 2017.
FOR FURTHER INFORMATION CONTACT: Kamela Nelan at (202) 317-6942 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final and temporary regulations (TD 9809) that are the subject
of this correction are under sections 1471 through 1474 of the Internal
Revenue Code.
Need for Correction
As published, the final and temporary regulations (TD 9809) contain
errors which may prove to be misleading and need to be clarified. Some
portions of TD 9809 could not be incorporated due to inaccurate
amendatory instructions. Several of the correcting amendments to TD
9809 are needed to clarify or correct the results of inaccurate
amendatory instructions. These correcting amendments also include the
addition, deletion, or modification of regulatory language to clarify
the relevant provisions to meet their intended purposes or for
consistency with other related provisions of these regulations. The
addition of final regulatory language includes language that was
inadvertently removed in a prior amendment to the final regulations.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Correction of Publication
Accordingly, 26 CFR part 1 is corrected by making the following
correcting amendments:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 1.1471-1T is amended by revising the third sentence of
paragraph (b)(99) to read as follows:
Sec. 1.1471-1T Scope of chapter 4 and definitions (temporary).
* * * * *
(b) * * *
(99) * * * An address that is provided subject to instructions to
hold all mail to that address must be accompanied by certain
documentary evidence described in Sec. 1.1441-1(c)(38)(ii). * * *
* * * * *
0
Par. 3. Section 1.1471-2 is amended by revising the third sentence of
paragraph (a)(2)(i) to read as follows:
Sec. 1.1471-2 Requirement to deduct and withhold tax on withholdable
payments to certain FFIs.
(a) * * *
(2) * * *
(i) * * * Further, a withholding agent is not required to withhold
on a payment that it can reliably associate with documentation
indicating that the payee is a U.S. branch treated as a U.S. person (as
defined in Sec. 1.1471-1(b)(135)) or is a U.S. branch of an FFI that
is not treated as a U.S. person but that applies the rules described in
Sec. 1.1471-4(d)(2)(iii)(C). * * *
* * * * *
0
Par. 4. Section 1.1471-3 is amended by revising paragraph (b)(3) to
read as follows:
Sec. 1.1471-3 Identification of payee.
* * * * *
(b) * * *
(3) Determination of whether the payment is made to a QI, WP, or
WT. A withholding agent may treat the person who receives a payment as
a QI, WP, or WT if the withholding agent can reliably associate the
payment with a valid Form W-8IMY, as described in paragraph (c)(3)(iii)
of this section, that indicates that the person who receives the
payment is a QI, WP, or WT, provides the person's QI-EIN, WP-EIN, or
WT-EIN, and the person's GIIN, if applicable.
* * * * *
0
Par. 5. Section 1.1471-4 is amended by revising paragraph (d)(3)(ii)(E)
and adding a heading to paragraph (d)(7) to read as follows:
Sec. 1.1471-4 FFI agreement.
* * * * *
(d) * * *
(3) * * *
(ii) * * *
(E) Such other information as is otherwise required to be reported
under this paragraph (d)(3) or in the form described in paragraph
(d)(3)(v) of this section and its accompanying instructions.
* * * * *
(7) Special reporting rules with respect to the 2014 and 2015
calendar years--
* * * * *
0
Par. 6. Section 1.1471-4T is amended by revising paragraph
(d)(2)(ii)(G) introductory text to read as follows:
Sec. 1.1471-4T FFI agreement (temporary).
* * * * *
(d) * * *
(2) * * *
(ii) * * *
(G) Combined reporting on Form 8966 following merger or bulk
acquisition. If a participating FFI (successor) acquires accounts of
another participating FFI (predecessor) in a merger or bulk acquisition
of accounts, the successor may assume the predecessor's obligations to
report the acquired accounts under paragraph (d) of this section with
respect the calendar year in which the merger or acquisition occurs
(acquisition year), provided that the requirements in paragraphs
(d)(2)(ii)(G)(1) through (4) of this section are satisfied. If the
requirements of paragraphs (d)(2)(ii)(G)(1) through (4) of this section
are not satisfied, both the predecessor and the successor are required
to report the acquired accounts for the portion of the acquisition year
that it maintains the account.
* * * * *
0
Par. 7. Section 1.1471-5 is amended by adding paragraph
(f)(1)(i)(F)(3)(viii) and revising paragraph (f)(2)(iii)(C) to read as
follows:
Sec. 1.1471-5 Definitions applicable to section 1471.
* * * * *
(f) * * *
(1) * * *
(i) * * *
(F) * * *
(3) * * *
(viii) Has not had its status as a sponsoring entity revoked.
* * * * *
(2) * * *
(iii) * * *
(C) Twenty or fewer individuals own all of the debt and equity
interests in the FFI (disregarding debt interests owned by U.S.
financial institutions, participating FFIs, registered deemed-compliant
FFIs, and certified deemed-compliant FFIs and equity interests owned by
an entity if that entity owns 100 percent of the equity interests in
the FFI and is itself a sponsored FFI under this paragraph
(f)(2)(iii)).
* * * * *
0
Par. 8. Section 1.1474-1 is amended by:
0
1. Revising paragraphs (d)(4)(i)(C)(2) and (3).
0
2. Adding paragraph (d)(4)(ii)(C).
0
3. Revising the heading of paragraph (d)(4)(iii), and paragraphs
(d)(4)(iii)(A) and (B).
The revisions and addition read as follows:
Sec. 1.1474-1 Liability for withheld tax and withholding agent
reporting.
* * * * *
[[Page 29730]]
(d) * * *
(4) * * *
(i) * * *
(C) * * *
(2) If the U.S. branch of an FFI is not treated as a U.S. person
and applies the rules described in Sec. 1.1471-4(d)(2)(iii)(C) and
provides the withholding agent with a withholding certificate that
transmits information regarding its reporting pools referenced in
paragraph (d)(4)(i)(B) of this section or information regarding each
recipient that is an account holder or payee of the U.S. branch, the
withholding agent must complete a separate Form 1042-S issued to the
U.S. branch for each such pool to the extent required on the form and
its accompanying instructions or must complete a separate Form 1042-S
issued to each recipient whose documentation is associated with the
U.S. branch's withholding certificate as described in paragraph
(d)(4)(ii)(A) of this section and report the U.S. branch as an entity
not treated as a recipient; or
(3) If the U.S. branch of an FFI is not treated as a U.S. person
and applies the rules described in Sec. 1.1471-4(d)(2)(iii)(C) to the
extent it fails to provide sufficient information regarding its account
holders or payees, the withholding agent shall report the recipient of
the payment as an unknown recipient to the extent recipient information
is not provided and report the U.S. branch as provided in paragraph
(d)(4)(ii)(A) of this section for an entity not treated as a recipient.
* * * * *
(ii) * * *
(C) Disregarded entities. If a U.S. withholding agent makes a
payment to a disregarded entity and receives a valid withholding
certificate or other documentary evidence from the person that is the
single owner of such disregarded entity, the withholding agent must
file a Form 1042-S treating the single owner as the recipient in
accordance with the instructions to the Form 1042-S.
(iii) Reporting by participating FFIs and deemed-compliant FFIs
(including QIs, WPs, and WTs) and U.S. branches of FFIs not treated as
U.S. persons--(A) In general. Except as otherwise provided in paragraph
(d)(4)(iii)(B) (relating to NQIs, NWPs, NWTs, and FFIs electing under
section 1471(b)(3)) and Sec. 1.1471-4(d)(2)(ii)(F) (relating to
transitional payee-specific reporting for payments to nonparticipating
FFIs), a participating FFI or deemed-compliant FFI (including a QI, WP,
or WT), and a U.S. branch of an FFI that is not treated as a U.S.
person that applies the rules described in Sec. 1.1471-4(d)(2)(iii)(C)
that makes a payment that is a chapter 4 reportable amount to a
recalcitrant account holder or nonparticipating FFI must complete a
Form 1042-S to report such payments. A participating FFI or registered
deemed-compliant FFI (including a QI, WP, or WT), and a U.S. branch of
an FFI that is not treated as a U.S. person that applies the rules
described in Sec. 1.1471-4(d)(2)(iii)(C) may report in pools
consisting of its recalcitrant account holders and payees that are
nonparticipating FFIs. With respect to recalcitrant account holders,
the FFI may report in pools consisting of recalcitrant account holders
within a particular status described in Sec. 1.1471-4(d)(6) and within
a particular income code. Except as otherwise provided in Sec. 1.1471-
4(d)(2)(ii)(F), with respect to payees that are nonparticipating FFIs,
the FFI may report in pools consisting of one or more nonparticipating
FFIs that fall within a particular income code and within a particular
status code described in the instructions to Form 1042-S.
Alternatively, a participating FFI or registered deemed-compliant FFI
(including a QI, WP, or WT) and a U.S. branch of an FFI that is not
treated as a U.S. person that applies the rules described in Sec.
1.1471-4(d)(2)(iii)(C) may (and a certified deemed-compliant FFI is
required to) perform payee-specific reporting to report a chapter 4
reportable amount paid to a recalcitrant account holder or a
nonparticipating FFI when withholding was applied (or should have
applied) to the payment.
(B) Special reporting requirements of participating FFIs, deemed-
compliant FFIs, FFIs that make an election under section 1471(b)(3),
and U.S. branches of FFIs not treated as U.S. persons. Except as
otherwise provided in Sec. 1.1471-4(d)(2)(ii)(F), a participating FFI
or deemed-compliant FFI that is an NQI, NWP, or NWT, and a U.S. branch
of an FFI that is not treated as a U.S. person that applies the rules
described in Sec. 1.1471-4(d)(2)(iii)(C) or an FFI that has made an
election under section 1471(b)(3) and has provided sufficient
information to its withholding agent to withhold and report the payment
is not required to report the payment on Form 1042-S as described in
paragraph (d)(4)(iii)(A) of this section if the payment is made to a
nonparticipating FFI or recalcitrant account holder and its withholding
agent has withheld the correct amount of tax on such payment and
correctly reported the payment on a Form 1042-S. Such FFI or branch is
required to report a payment, however, when the FFI knows, or has
reason to know, that less than the required amount has been withheld by
the withholding agent on the payment or the withholding agent has not
correctly reported the payment on Form 1042-S. In such case, the FFI or
branch must report on Form 1042-S to the extent required under
paragraph (d)(4)(iii)(A) of this section. See, however, Sec. 1.1471-
4(d)(6) for the requirement to report certain aggregate information
regarding accounts held by recalcitrant account holders on Form 8966,
``FATCA Report,'' regardless of whether withholdable payments are made
to such accounts.
* * * * *
Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division,
Associate Chief Counsel (Procedure and Administration).
[FR Doc. 2017-13632 Filed 6-29-17; 8:45 am]
BILLING CODE 4830-01-P
