The Internal Revenue Service has begun previewing a set of draft forms to help taxpayers and banks comply with the Foreign Account Tax Compliance Act.
Like what you see? Click here to sign up for Accounting Today's daily newsletter to get the latest news and behind the scenes commentary you won't find anywhere else.
FATCA, which was included as part of the HIRE Act of 2010, requires foreign financial institutions, including hedge funds, to begin reporting on the bank accounts and other assets of U.S. taxpayers directly to the Internal Revenue Service. The IRS recently unveiled new regulations designed to ease the impact of the controversial new law and streamline the procedures for nonresident U.S. taxpayers and dual citizens (see IRS Streamlines Tax Compliance Procedures for Nonresident Taxpayers).
The IRS released draft versions of four forms that will be used for FATCA compliance: Draft Form W-8IMY “Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding”; Draft Form W-8ECI “Certificate of Foreign Person's Claim that Income is Effectively Connected with the Conduct of a Trade or Business in the United States”; Draft Form W-8EXP “Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding”; and Draft Form W-8BEN “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding (Individuals).”