The Internal Revenue Service has updated its online registration system for the Foreign Account Tax Compliance Act to allow foreign financial institutions to renew their agreement with the IRS.
FATCA was included as part of the HIRE Act of 2010, requiring foreign banks and other financial institutions such as hedge funds to report on the holdings of U.S. citizens to the IRS, or else face stiff penalties of up to 30 percent on their income from U.S. sources. The controversial law led to the Treasury Department signing intergovernmental agreements with the tax authorities of other countries, in most cases allowing foreign banks to first send the information to their own country’s tax authorities, who in turn forward it to the IRS. The IRS had to delay the rollout of the initial online registration system in 2013, but now the FATCA FFI Registration system has been updated to allow foreign financial institutions to renew their agreement with the IRS.
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