The Internal Revenue Service has updated the Withholding Foreign Partnership and Withholding Foreign Trust agreements as part of the process of implementing the Foreign Account Tax Compliance Act, or FATCA.

FATCA, which was included as part of the HIRE Act of 2010, requires foreign financial institutions to report on the holdings of U.S. citizens to the IRS, or else face stiff withholding penalties of up to 30 percent on their U.S. source income. The law has provoked controversy abroad and in the U.S., but the IRS and the Treasury have nonetheless been rolling it out gradually, with a number of deadlines taking effect this year.

Last Friday, the IRS issued Revenue Procedure 2014-47, which updates the Withholding Foreign Partnership (WP) and Withholding Foreign Trust (WT) agreements applicable to foreign partnerships and trusts that wish to enter into a withholding agreement with the IRS. Revenue Procedure 2014-47 updates and supersedes the WP and WT Agreements that were originally released in 2003 as Revenue Procedure 2003-64, 2003-2 C.B. 306. In addition, the link to Revenue Procedure 2014-47, setting out the updated WP and WT Agreements, has been added to the FATCA Registration and FATCA Governments Website sections of the FATCA Website.

Separately, the IRS also posted a new FAQ document Friday describing the application of the pre-existing obligation election to intermediaries and flow-through entities. The new FAQ is posted in the General Compliance category and is dated Aug. 8, 2014. It can be found on the FATCA site at FATCA - FAQs General.