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Tax News
SIFMA asks the IRS to issue a FAQ regarding “document repositories” under Regulations 1.1471-3(c)(6)(iv) and 1.1441-1(e)(4)(iv)(C)
SIFMA asks the IRS to issue a FAQ regarding “document repositories” under Regulations 1.1471-3(c)(6)(iv) and 1.1441-1(e)(4)(iv)(C)
We wanted to pass the following along in case you missed it. Apparently SIFMA members, who encompass some of the largest investment funds and financial institutions in the Country, are in a predicament regarding document repositories and whether current practices with respect to those repositories meet FATCA regulations. Investment managers have to provide various forms such as W-9s or W-8BEN-Es to withholding agents to open accounts and receive transaction authorization. For managers who have relationships with hundreds of investment funds this would encompass a lot of documents. According...
February 10, 2015 read more
Here Comes FATCA “Phishing”
Here Comes FATCA “Phishing”
It did not take long for sophisticated scam artists to start exploiting FATCA. A few weeks ago we reported the first indictment that we know of whereby several individuals allegedly were selling to overly-entrepreneurial U.S. individuals a runaround FATCA scheme.  Yesterday the IRS came out with a Phishing alert warning FFIs that there are scam artists out there who would call the institution pretending to be the IRS and asking for account information. Now, this IRS phishing scam has a long history here in the U.S. We would like to think that most U.S. residents and citizens know better...
September 25, 2014 read more
FATCA, Sure! But Cheaters will be Cheaters
FATCA, Sure! But Cheaters will be Cheaters
I have expressed my views about FATCA before. My belief is that while it is a well-intentioned law standing on a higher moral ground, its added complexity and international fallout overshadow its utility. In other words, I personally think that its benefits outweigh the burdens. There was a very thoughtful letter not long ago by Mr. A. Pelling addressed to the Treasury and published by TNT, asking Treasury to quantify the cost of implementing FATCA and its burden versus the expected benefit in revenues from its implementation.  I’d be curious if Treasury responds. As it may be, the point...
September 11, 2014 read more
W-8BEN-E Instructions are Released – Tax Policy Meets Reality
W-8BEN-E Instructions are Released – Tax Policy Meets Reality
In my last post regarding W-8BEN-E, I observed that some foreign businesses were in a predicament because withholding agents started asking for the form but there were no instructions. I asked "for how long" will this continue and the IRS answered - until June 24th.  Aside any jokes that the IRS is actually taking queue from my blog posts, as practitioners had hoped, the IRS released instructions before the July 1st FATCA deadline. As a lawyer, I don’t do much reporting and I would not comment on the intricacies of the form. However, I have a few practical observations.  I...
June 26, 2014 read more
W-8BEN-E in No-Man Land Until….When?
W-8BEN-E in No-Man Land Until….When?
On this blog I’ve voiced my skepticism about FATCA, both as a policy rationale and as a logistical undertaking. Recently I started observing the effects of something I can only describe as a blunder on part of the U.S. taxing authorities. So, W-8BEN-E is out for a few months now. Many people waited eagerly for the form to be released.  What happened, however, is that there are no instructions! Well, that apparently does not prevent some withholding agents from sending out the form to foreign businesses. I would describe this as overzealousness that is not necessarily valid or logical....
June 04, 2014 read more
Summer Recap: A Few Notable Investment Fund Tax Related Developments
Summer Recap: A Few Notable Investment Fund Tax Related Developments
I haven’t posted too much as of late due to vacation, spending more time with the family, and a somewhat busier summer season as far as investment fund deals go.  To catch up, I will recap below a few fund related tax developments that I thought were notable in the last several months.Form 8938 Q&AIRS updated the Q&A that it initially posted in February 2012 regarding Form 8938.  I have discussed on this blog that the form will be applicable to US investors in foreign funds considering that it captures holdings in stocks, securities and partnership interest in foreign...
August 27, 2012 read more
FATCA Proposed Regulations Battle for the Top Spot at the Apex of Regulatory Complexity
FATCA Proposed Regulations Battle for the Top Spot at the Apex of Regulatory Complexity
So, while I was in the hospital and on medical leave, Treasury released the much-anticipated proposed FATCA regulations. I came home and I was welcomed by a 400-page thicket of what appears to be one of the most significant Treasury regulatory projects in many years.  By the time I am writing this, most law and accounting firms have released summaries of the regulations and have offered their 2 cents on the issues arising from FATCA. Trying not to overlap with what others have said, I would like to add a few policy observations and some points that are specifically pertinent to investment...
March 15, 2012 read more
A Few Developments from the Past Couple of Weeks: FATCA, Stop Tax Haven Abuse Act and Monetization Strategies
A Few Developments from the Past Couple of Weeks: FATCA, Stop Tax Haven Abuse Act and Monetization Strategies
Here are a few things that caught my eye when I was on vacation for the past couple of weeks in my home town of Varna, Bulgaria. I will list them in chronological order and I’ll briefly mention why I found them notable.The Reintroduction of the Stop Tax Haven Abuse ActThis bill is not new. It was first introduced by Senator Levin in 2009 with the idea of battling corporate tax shelters. The thrust of the law was the idea of curtailing abuses by treating certain foreign corporations as domestic corporations if their management and control was within the US. Had it been enacted, this Act...
August 01, 2011 read more
FATCA Implementation: Take Two
FATCA Implementation: Take Two
I've posted quite a bit about FATCA on this blog. Among these posts was a FATCA implementation report by Navigant prepared in the aftermath of Notice 2010-60 and sent to me by my colleague Rich Kando. This first report could be found here.  Subsequent to the second round of guidance on FATCA, Notice 2011-34, Navigant, as many other service providers and advisors, prepared an updated implementation report.  Just as with the first report, I think that Navigant has done a pretty good job of making sense out of these Notices, to the extent possible, and of creating some implementation...
May 12, 2011 read more
Notice 2011-34: The Second Round of FATCA Guidance is Released
Notice 2011-34: The Second Round of FATCA Guidance is Released
So, while I was busy with work and finishing up the private equity tax book I’ve been toiling on, Treasury released the second round of FATCA guidance (on a Friday nonetheless).  Here are my observations:The guidance comes in the form of another voluminous notice. It is 46 pages which in addition to the 62 pages of Notice 2010-60 comes to a total of 108. Why do I point that out?  I point this out for several reasons.  First, this in my mind equates to a possible 100-150 page proposed regulation, counting the preamble. It seems paradoxical to me to come up with volumes on top of...
April 16, 2011 read more
FATCA and Foreign Funds
FATCA and Foreign Funds
I was reading an article today by Lee Sheppard titled “Danilack Warns Multinationals on FATCA and GRAs.”   In the article, Ms. Sheppard reports on deputy commissioner (international) Michael Danilack’s views on FATCA and raises some questions along the way.  What intrigued me was the question about the holding company rule.  Ms. Sheppard asks “What if private equity funds are making U.S. investments through a foreign holding company?”  Then few more thoughts on Ms. Sheppard’s part follow and the discussion ends with Mr. Danilack’s answer -  “the government does not want...
March 01, 2011 read more
Treasury Official: Payments Under Fixed-term Revolvers Likely to Qualify For FATCA Exemption
Treasury Official: Payments Under Fixed-term Revolvers Likely to Qualify For FATCA Exemption
on Friday, January 21, 2011, a Treasury Department official gave his views on the treatment of an important issue under FATCA that affects the PE and VC industries.  According to the Bureau of National Affairs' Daily Tax RealTime service, the official--Itai Grinberg, an attorney-adviser in Treasury's Office of International Tax Counsel--stated that he believed that payment obligations under revolving credit agreements outstanding as of March 18, 2012 would not be subject to FATCA's withholding tax regime, so long as such credit agreements have a finite term.  Based on Mr....
January 24, 2011 read more
FATCA Implementation
FATCA Implementation
FATCA has been an extremely popular topic among U.S. tax practitioners.  Unfortunately, however, many foreign financial institutions (FFI) seem to be oblivious to the long arm of FATCA and have not started to prepare for FATCA implementation by introducing procedures for complying with this new legislation.  A colleague of mine, Richard Kando from Navigant Consulting, Inc sent me a FATCA whitepaper that deals with creating internal procedures for FATCA implementation.  As the paper notes, the process could be mindboggling and despite the January 1st, 2013 effective date, FFIs should...
January 06, 2011 read more
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