Posts Tagged ‘LexisNexis’

New Lexis Advance® Tax Platform Now Available to Law School Faculty & Students; Cutting-Edge International Tax Titles

Posted by William Byrnes on October 22, 2015

On June 1, LexisNexis launched its new online tax research platform called Lexis Advance® Tax.

Already available to America’s law school faculty and students, it includes a rich, comprehensive package of nearly 1,400 sources, including tax news, primary law, journals and nearly 300 treatises, practice guides and forms products for both tax and estates lawyers.

Along with news, another strong area for L.A. Tax is its subpage devoted to International Tax. There, users will find a selection of titles examining hot, cutting-edge issues like: Lexis Guide to FATCA Compliance, the Lexis global guide to anti-money laundering laws around the world, and the recently-revised Foreign Tax & Trade Briefs, 2nd Ed, which provides summaries of each country’s tax system and laws.

All of these titles are produced by a team of tax experts led by Professor William H. Byrnes, Associate Dean, International Financial Law, at Texas A&M University Law School, in Fort Worth, the newest law school in Texas. See https://law.tamu.edu/

Looking for Lexis Advance Tax?
Sign in to www.lexisadvance.com, look for the pull-down menu called “Lexis Advance Research” in the upper-left corner. Click the down arrow and select Lexis Advance Tax.

If you have questions or would like to schedule a short training, please contact your LexisNexis® Account Executive.

– See more at: http://www.lexisnexis.com/lextalk/legal-content-insider/f/21/t/2525.aspx?utm_content=2015-10-20+15:00:04#sthash.szct2yk6.dpuf

Posted in BEPS, FATCA, Financial Crimes, Money Laundering, Taxation, Transfer Pricing | Tagged: AML, BEPS, FATCA, LexisNexis | Leave a Comment »

New Lexis Advance® Tax Platform Now Available to Law School Faculty & Students; Highlights Include Cutting-Edge International Tax Titles

Posted by William Byrnes on October 15, 2015

On June 1, LexisNexis launched its new online tax research platform called Lexis Advance® Tax.

If you have questions or would like to schedule a short training, please contact your LexisNexis® Account Executive.

– See more at: http://www.lexisnexis.com/lextalk/legal-content-insider/f/21/t/2525.aspx?utm_content=2015-10-20+15:00:04#sthash.szct2yk6.dpuf

Posted in BEPS, book, FATCA, Money Laundering | Tagged: LexisNexis | Leave a Comment »

LexisNexis releases next edition of Money Laundering, Asset Forfeiture and Recovery Global Guide

Posted by William Byrnes on March 6, 2014

book cover

Graduating Thomas Jefferson juris doctor candidate Emmanuel Rayes co-authored with Dr. David Utzke the chapter “Virtual-Currency Regulatory Developments” for LexisNexis new release of Money Laundering, Asset Forfeiture and Recovery and Compliance — A Global Guide (LexisNexis). Ashley Paulson, currently working in a DEA internship position and also about to graduate from Thomas Jefferson, leveraged her professional network and work expertise to create three new compliance oriented chapters for banks, including one on politically exposed persons (‘PEPs’).

Emmanuel Rayes reported “Associate Dean William Byrnes provided many great resources in helping me prepare this publication. He has valuable connections in the legal and business fields not only in the United States but all over the World. Dean Byrnes introduced me to Dr. Utzke who is the lead IRS agent for virtual currencies and offshore compliance. Dr. Utzke’s guidance and insight was pivotal in completing this publication.”

“At the DEA one of my supervisors was impressed that I was working with Associate Dean William Byrnes,” related Ashley Paulson. “With the experience gained from my government work and from consulting other expert attorneys in this area, I was able to analyze three areas of chief concern for financial institutions: suspicious activity reporting (‘SAR’), currency transaction reporting (‘CTR’) and PEPS. My interest in PEP compliance grew after the International Consortium of Investigative Journalists exposed thousands of instance of major banks thwarting PEP guidelines, leading to corresponding allegations of corruption by those PEPs and their families.”

“Virtual currencies are changing the perception of what money is and what money can do,” Emmanuel Rayes described. “The amount of excitement and interest surrounding this topic is comparable to the introduction of the Internet or the Smartphone.”

“After passing the Bar, I plan to stay involved with this publishing as a Thomas Jefferson alumni,” declared Ashley Paulson. “I encourage students to attend William Byrnes’ lectures and learn about these unique opportunities for his students to engage with experts to assist them in authoring articles on current topics.”

Mr. Rayes added, “I think that being a featured author in a major LexisNexis publication that so many lawyers and banks rely upon is a career game changer. It’s already opening doors.”

“I agree”, said Ms. Paulson, “Having been an author for chapters that banks are referencing, and my experience with the DEA, has distinguished me from other graduates for career opportunities.”

“I match my Thomas Jefferson students with co-authorship opportunities in my graduate publication seminar that they may connect with professionals and begin to build a network,” explained William Byrnes. “I am hosting a Tax Society lunch on March 25^th featuring renown European Court of Justice expert and author Dr. Dennis Weber and will discuss the next set of networking opportunities with those attending.”

Money Laundering, Asset Forfeiture and Recovery and Compliance — A Global Guide

William H. Byrnes, IV,

Posted in book | Tagged: AML, LexisNexis, Money Laundering, Thomas Jefferson, William Byrnes | Leave a Comment »

Final FATCA FFI Agreement released by IRS

Posted by William Byrnes on December 27, 2013

On December 26 the IRS released Rev Proc 2014-10: FFI Agreement for Participating FFI and Reporting Model 2 FFI. The final FFI agreement contains a number of changes to provisions of the draft FFI agreement that required correction or clarification. The Rev Proc provides four areas of such changes and clarifications that occur in the final FFI agreement.

First, several of the cross-references in the FFI agreement (notably, in section 2 of the FFI agreement) are modified in anticipation of the publication of two sets of temporary regulations to which the updated cross-references relate. Both sets of temporary regulations are expected to be published in early 2014.

Second, the FFI agreement contains revisions to correct minor technical errors in the draft FFI agreement.

Third, revisions are made to further clarify the FFI agreement and conform it to the temporary chapter 4 regulations. By example, as contemplated in Notice 2013-69, the FFI agreement provides that, with respect to calendar years 2015 and 2016, participating FFIs that are required to report foreign reportable amounts paid to nonparticipating FFIs shall report this information on Form 8966.

Finally, the FFI agreement also provides for a two-year transition period during which a reporting Model 2 FFI may elect to apply the due diligence procedures described in the FFI agreement in lieu of those in Annex I of an applicable Model 2 IGA and the FFI agreement is also revised to reflect that this election is made by the reporting Model 2 FFI and not the reporting Model 2 IGA jurisdiction. Read my previous FATCA coverage > herein <

FATCA Compliance Program and Manual

Fifty contributing authors from the professional and financial industry provide expert analysis within the LexisNexis® Guide to FATCA Compliance (2^nd Edition): many perspectives – one voice crafted by the primary author William Byrnes. The second edition has been expanded from 25 to 34 chapters, with 600 pages of regulatory and compliance analysis.

The previous 25 chapters have been substantially updated, including many more practical examples to assist a compliance officer contextualize the regulations, IGA provisions, and national rules enacted pursuant to an IGA. The nine new chapters include by example an in-depth analysis of the categorization of trusts pursuant to the Regulations and IGAs, operational specificity of the mechanisms of information capture, management and exchange by firms and between countries, insights as to the application of FATCA and the IGAs within new BRIC and European country chapters. Chapter 7 has been drafted for a financial institution’s compliance officer, Chapter 9 for the trust department compliance officer, and Chapter 10 for the insurance firm’s compliance officer. Chapter 7 provides a new section analyzing the compliance risks with the IRS’ released FFI agreement.

The LexisNexis® Guide to FATCA Compliance (2^nd Edition) comprises 34 Chapters grouped in three parts: compliance program (Chapters 1–4), analysis of FATCA regulations (Chapters 5–16) and analysis of FATCA’s application for certain trading partners of the U.S. (Chapters 17–34), including intergovernmental agreements as well as the OECD’s TRACE initiative for global automatic information exchange protocols and systems.

See: http://www.lexisnexis.com/store/catalog/booktemplate/productdetail.jsp?pageName=relatedProducts&prodId=prod19190327&ORIGINATION_CODE=00247

Posted in FATCA, Uncategorized | Tagged: BRIC, FATCA, FFI, Foreign Account Tax Compliance Act, Foreign function interface, Internal Revenue Service, LexisNexis, Regulation | Leave a Comment »

FATCA FFI List Resources and Support Information Webpage and FFI List FAQs are Now Available

Posted by William Byrnes on December 23, 2013

On December 19, the IRS released FATCA News Issue Number 2013-16 wherein it announced the FATCA FFI List Resources and Support Information Webpage and the FATCA FFI List Frequently Asked Questions (FAQs) have been posted to the FATCA Website.

The IRS’ new FATCA FFI List Resources and Support Information includes the following information:

An FFI may agree to report certain information about its account holders by registering to be FATCA compliant. An FFI that has registered and that has been issued a global intermediary identification number (GIIN) will appear on a published FFI List. The FFI List can be downloaded in its entirety or searched for specific information (FI name, GIIN or country). Search results can also be downloaded. Withholding agents may rely on an FFI’s claim of FATCA status based on checking the payee’s GIIN against the published FFI List. This FFI list search and download tool is scheduled to be available beginning June 2014, and will be updated monthly.

Additional information on FATCA registration is available in the FATCA Registration Overview. More details about the GIIN are available in the GIIN Composition document.

FFI list Search and Download Capabilities

Beginning in June 2014, a search tool, partial list download, and a full downloadable list will be available on IRS.gov to the public. No login or password will be required to search or download the list. The data will be refreshed on the 1st of the month and will only include FIs and branches approved 5 business days prior to the first of the month. The date of the last update to the information will be displayed on the page. Previous months lists will not be available on IRS.gov.

The FFI List search and download tool can be used for looking up individual or groups of FIs and their branches to determine if they are on the list of FATCA compliant FIs. To use the search feature, at least one of the following search fields must be filled in: GIIN, Financial Institution Name, or Country. The results will be displayed on the screen and can be exported in CSV, XML or PDF formats. Search tips will be available on this site.

A complete list of all FATCA compliant FIs and branches will also be available for download in CSV and XML formats. If you plan to import this file into your own database, additional information including the schema, is available on the FFI List Schema and Test Files page.

The IRS FFI List FAQs is available at http://www.irs.gov/Businesses/Corporations/IRS-FFI-List-FAQs

FATCA Compliance Program and Manual

Fifty contributing authors from the professional and financial industry produced LexisNexis® Guide to FATCA Compliance (2^nd Edition). The second edition has been expanded from 25 to 34 chapters, with 600 pages of regulatory and compliance analysis.

See: http://www.lexisnexis.com/store/catalog/booktemplate/productdetail.jsp?pageName=relatedProducts&prodId=prod19190327&ORIGINATION_CODE=00247

Posted in Compliance, FATCA | Tagged: BRIC, FATCA, Financial institution, Foreign Account Tax Compliance Act, GIIN, Internal Revenue Service, IRS, LexisNexis | Leave a Comment »

IRS’ FATCA Registration System Updates

Posted by William Byrnes on December 16, 2013

By Professor William Byrnes, – co-author of LexisNexis® Guide to FATCA Compliance; co-author of Foreign Tax & Trade Briefs

FATCA Registration Portal

FATCA requires that FFIs, through a responsible officer (a.k.a. “FATCA compliance officer”), make regular certifications to the IRS via the FATCA Portal, as well as annually disclose taxpayer and account information for U.S. persons, unless an intergovernmental agreement (“IGA”) allows for indirect reporting to the IRS via a foreign government. On Monday, August 19 the IRS opened its online FATCA registration system for financial institutions that need to register for compliance with the Foreign Account Tax Compliance Act. [See https://sa2.www4.irs.gov/fatca-rup/login/userLogin.do.]

This critical FATCA milestone was supposed to open July 15; however only on July 12 did the IRS issued a postponement, as well as a push back all of the corresponding impacted milestones and deadlines. See Lexis article: FATCA FFI Compliance Extended; FATCA Portal, Other Key Dates Pushed Back.

Participating FFI List to Avoid FATCA Withholding

FFIs will now have four months, until April 25, 2014, to register on this portal to be included on the Participating FFI List that the IRS will publish June 2, 2014. Beginning July 1, 2014, withholding agents will implement the 30 percent FATCA withholding on payments of U.S. source income, including portfolio interest and capital gains, made to FFIs not on the Participating FFI list.

Global Intermediary Identification Number (GIIN)

An FFI will be included on the Participating FFI (“PFFI”) List if the FFI has registered via the FATCA Portal that the FFI agrees to comply with the IRS’ Foreign Financial Institution Agreement (“FFI Agreement”). The IRS will begin issuing each PFFI a Global Intermediary Identification Number (GIIN) as portal registrations are finalized by April 25, 2014. The PFFI will then include on its certification to U.S. withholding agents that GIIN — allowing matching against the PFFI List. [On April 8. 2013 the IRS released a sample of the PFFI List schema with example GIINs. See http://www.irs.gov/Businesses/International-Businesses/IRS-FFI-List-Schema-and-Test-Files.]

The following changes were made to the FATCA Registration System on December 8, 2013. For more detailed information, refer to Appendix A in the updated FATCA Registration Online User Guide.

1. Corrections to reported problems:

(a) Corrects problems with Member PDF file – currently only displays last 50 members in list, times out when there is a large number of members

(b) Corrects problem with deleting PAI contracts in part 3, question 15

2. Wording updates

(a) Minor wording changes to registration screens (Questions 10, 11a, 11b, POC Authorization, Part 4 – Submit)

(b) Wording changes to help text, including “instructions” page and “get help” page

(d) Wording changes on FI home pages

(e) Updates to external content linked to from registration system

(f) Update to country drop down list for questions with countries

3. Enhancements

(a) Additional statuses added

(b) Additional information added on FI home pages, including link to manage branch information

(d) Added notifications to FI’s, including external email notifications to RO for certain status changes

For the period from the opening of the FATCA registration website through December 31, 2013, a financial institution (FI) will be able to access its online account to modify or add registration information.

FIs can use the remainder of 2013 to become familiar with the FATCA registration website, to input preliminary information, and to refine that information. On or after January 1, 2014, each FI will be expected to finalize its registration information by logging into its online account on the FATCA registration website, making any necessary additional changes, and submitting the information as final.

As registrations are finalized and approved in 2014, registering FIs will receive a notice of registration acceptance and will be issued a global intermediary identification number (GIIN).

Below find a link to IRS instructions, user guide and video materials to assist you and your financial institution with FATCA registration:

“How-to” videos to assist financial institutions with FATCA registration:

FATCA Compliance Program and Manual

The FATCA compliance officer responsible for an enterprise with multiple lines of business in multiple jurisdictions is particularly at risk of missing this critical registration deadline and other important compliance milestones, especially in jurisdictions that do not have a Model 1 IGA with the U.S. This LexisNexis® Guide to FATCA Compliance contains three chapters written specifically to guide a financial institution’s lead FATCA compliance officer in designing a plan of internal action within the enterprise, interaction with outside FATCA advisors with a view of best leveraging available resources and budget, and systems management [see Chapters 2, 3 and 4].

See: http://www.lexisnexis.com/store/catalog/booktemplate/productdetail.jsp?pageName=relatedProducts&prodId=prod19190327&ORIGINATION_CODE=00247

Posted in Compliance, FATCA | Tagged: FATCA, Financial institution, Foreign Account Tax Compliance Act, Foreign function interface, Internal Revenue Service, IRS, LexisNexis | Leave a Comment »

FATCA Foreign Financial Institutions (FFI) Agreement Draft Released

Posted by William Byrnes on October 29, 2013

On October 29, 2013, the IRS released the long awaited FFI draft agreement and an accompanying notice incorporating updates to certain due diligence, withholding, and other reporting requirements released earlier this year (click the FATCA category on the left for previous coverage). The FFI draft agreement provides the proposed guidance for FFIs to comply with the information reporting and withholding tax provisions of the Foreign Account Tax Compliance Act (FATCA).

The IRS is committed to finalizing the FFI agreement by the end of 2013 because client due diligence and withholding requirements begin July 1, 2014. These due diligence and withholding requirements were this summer pushed back 6 months from January 1, 2014. The first FATCA information reports are due by PFFIs to the IRS in March 2015 via IRS Form 8966, FATCA Report, and includes the FATCA Report XML.

The IRS FATCA registration website for FFIs has been open since August 19, but also cast off to a late start of over a month. Since August 19, FFI have begun testing the registration process and entering information. The IRS expects to issue GIINs (Global Intermediary Identification Numbers) in early 2014. A Model 2 Reporting FFI (RFFI) that registers with the IRS to obtain a global intermediary identification number (GIIN) and complies with the terms of the FFI agreement, as modified by the applicable Model 2 IGA, will be treated as complying with the requirements of, and not subject to FATCA withholding.

The draft FFI agreement released today is for participating FFIs (PFFI) that directly engage in an agreement with the IRS and those RFFIs reporting through a Model 2 intergovernmental agreement (IGA). To date, Treasury has signed nine IGAs of which two are based on Model 2, has reached 16 agreements in substance, and is engaged in related conversations with many more jurisdictions. For an in-depth compliance analysis of the elements of these IGAs, see LexisNexis® Guide to FATCA Compliance. The Model 2 IGA framework allows FFIs to report directly to the IRS to the extent that an account holder consents or that such reporting is otherwise legally permitted. Non-consenting account holders information may be obtained via normal information exchange between the governments.

An FFI may register on Form 8957, FATCA registration, via the FATCA registration website available at http://www.irs.gov/fatca to enter into an FFI agreement on behalf of its branches (including its home office) so that each of such branches may be treated as a participating FFI. A reporting Model 2 FFI may also register on the FATCA registration website, on behalf of one or more of its branches (including its home office), to obtain a GIIN and to agree to comply with the terms of an FFI agreement, as modified by an applicable Model 2 IGA. The PFFI must appoint a responsible officer to establish a FATCA compliance program who then periodically reviews the sufficiency of the FATCA compliance program.

“The Agreement and forthcoming guidance have been designed to minimize administrative burdens and related costs for foreign financial institutions and withholding agents,” Deputy Assistant Secretary for International Tax Affairs Robert B. Stack is reported to have said with today’s notice release. “Today’s preview demonstrates the Administration’s commitment to ensuring full global cooperation and a smooth implementation.”

Treasury added comments directed at critics of the compliance costs of FATCA: “The regulations were intentionally designed to appropriately balance the scope of entities and accounts subject to FATCA with due diligence requirements, while also phasing in the related obligations over several years. For example, the final regulations exempt all preexisting accounts held by individuals with $50,000 or less from review. For similar accounts with less than $1,000,000, an FFI is only required to search the account information that is electronically available. In many cases, FFIs are permitted to rely on information that they already must collect for local anti-money laundering and know-your-customer rules.”

“Treasury is releasing necessary pieces of this FATCA puzzle very close to the compliance deadlines, given the necessary systems implementation required by PFFIs and RFFIs – albeit the longer than 2 week government shutdown certainly wasn’t on anybody’s radar screen”, said Professor William Byrnes. “Some firms will simply not be FATCA-compliant by next year’s deadlines, and I don’t think there will be another postponement of due diligence deadlines. Moreover, as it stands now, I don’t foresee the FATCA withholding refund procedures working smoothly either. Congress is making too many commitments for Treasury without giving Treasury the necessary resources to meet those commitments, and the shutdown didn’t help.”

The IRS Notice is available as a PDF at > FATCA October 29 Notice and Draft FFI Agreement <
For 440 pages of detailed FATCA analysis see http://www.lexisnexis.com/store/catalog/booktemplate/productdetail.jsp?pageName=relatedProducts&prodId=prod19190327&ORIGINATION_CODE=00247
20% discount code for book available at https://profwilliambyrnes.com/2013/10/11/2436/

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Posted in Compliance, FATCA | Tagged: FFI, Foreign Account Tax Compliance Act, Foreign function interface, Internal Revenue Service, IRS, LexisNexis, Money Laundering, United States | 1 Comment »

LexisNexis Publishes William H. Byrnes “International Withholding Tax Treaty Guide – 2nd Edition”

Posted by William Byrnes on October 24, 2013

LexisNexis released in September 2013 the new and expanded 2^nd Edition of its International Withholding Tax Treaty Guide. Thomas Jefferson’s Associate Dean of Graduate & Distance Education William Byrnes is the co-author with Dr. Robert J. Munro, retired law librarian of University of Florida. This is William Byrnes and Robert Munro’s sixth book together.

When asked about how Dr. Munro and he started writing together, William Byrnes replied: “When I met him in 1998, Dr. Robert Munro was Co-Director of the Center for International Financial Crimes Studies at University of Florida’s College of Law, focusing on anti money laundering and anti terrorism financing, whereas I focused on international taxation and multinational behavior. We explored several overlapping areas of interest, approaching each from our very different perspectives. Dr. Munro brings to the table his experience as a national security expert and his research into undocumented marketplaces whereas I bring my experience with multinational organization decision making and risk management.”

“Dr. Munro, after retiring from University of Florida, actively teaches anti money laundering for the Thomas Jefferson graduate program and provides its graduate and juris doctorate students with publication opportunities through the publication course to promote their professional careers. He has been particularly helpful with assisting students seek national security careers.”

Regarding the 2^nd edition International Withholding Tax Treaty Guide published this month, Robert Munro added: “The second edition of International Withholding Tax Treaty Guide includes a new binder with new chapter structures of completely rewritten tax information and analysis. The International Withholding Tax Treaty Guide has been expanded to include many new countries to match the robust list of 110 countries of Foreign Tax & Trade Briefs. Moreover, International Withholding Tax Treaty Guide subscribers will receive new chapters of analysis and planning based on the OECD Model DTA articles and major trading country jurisprudence that are most relevant to corporate tax counsel, addressing topics such as capital gains, dividends, interest, rents, leasing income, royalties, and permanent establishment. Corporate counsel may combine the Foreign Tax & Trade Brief publications with Tax Havens of the World to form an international tax planning and risk management library at substantially less cost than competitive product suites.”

William Byrnes explained the history of this Lexis publication: “During the Second World War, Walter H. Diamond, then a banker, was tasked by the federal government to analyze and report on the investment and tax laws of each country and territory of which the Allies held confiscated Axis assets. Walter Diamond ventured though out the continents and Pacific meticulously collecting the local tax and investment laws and regulations applicable to the Allies new assets, and transcribed them into an understandable brief by country for the U.S. Treasury. In 1948, Matthew Bender published his country briefs in the first edition of Foreign Tax & Trade Briefs. Since 1948, the quarterly updated country briefs have been leveraged by thousands of multinational corporate counsel subscribers as part of their foreign tax and investments risk management best practices.”

“In 1974, Matthew Bender added a third binder to Foreign Tax & Trade Briefs, International Withholding Tax Treaty Guide, to specifically address the important role of tax treaties in tax risk management that had developed in the sixties. By 1975, nearly 1,000 tax treaties had been signed between countries based on the OECD’s Model with an additional 200 treaties in force based on the League of Nations Models. There are now more than 3,200 tax related treaties.”

When asked their next project together, Dr. Munro stated: “We are looking at tackling the rewrite of all three binders of Lexis’ Tax Havens of the World, with a new table of contents, new chapters, and a more modern ‘post-OECD reports’ approach.” William Byrnes added, “Yes, this major re-do should keep us creatively busy another couple years.”

Posted in book, Taxation | Tagged: Foreign Tax & Trade Brief, International taxation, LexisNexis, Organisation for Economic Co-operation and Development, Robert Munro, Tax treaty, Thomas Jefferson, University of Florida | Leave a Comment »

20% discount code for 400 page analysis of FATCA Compliance

Posted by William Byrnes on October 11, 2013

To purchase LexisNexis® Guide to FATCA Compliance and save 20%, visit the LexisNexis Store. The link for the 20% discount is:

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Over 400 pages of compliance analysis !! now available with the 20% discount code link in this flier –> LN Guide to FATCA_flier.

The LexisNexis® Guide to FATCA Compliance was designed in consultation, via numerous interviews and meetings, with government officials, NGO staff, large financial institution compliance officers, investment fund compliance officers, and trust companies, in consultation with contributors who are leading industry experts. The contributors hail from several countries and an offshore financial center and include attorneys, accountants, information technology engineers, and risk managers from large, medium and small firms and from large financial institutions. A sample chapter from the 25 is available on LexisNexis: http://www.lexisnexis.com/store/images/samples/9780769853734.pdf

Analysis by FATCA Experts –

Kyria Ali, FCCA is a member of the Association of Chartered Certified Accountants (“ACCA”) of Baker Tilly (BVI) Limited.

Michael Alliston, Esq. is a solicitor in the London office of Herbert Smith Freehills LLP.

Ariene d’Arc Diniz e Amaral, Adv. is a Brazilian tax attorney of Rolim, Viotti & Leite Campos Advogados.

Maarten de Bruin, Esq. is a partner of Stibbe Simont.

Jean-Paul van den Berg, Esq. is a tax partner of Stibbe Simont.

Amanda Castellano, Esq. spent three years as an auditor with the Internal Revenue Service.

Luzius Cavelti, Esq. is an associate at Tappolet & Partner in Zurich.

Bruno Da Silva, LL.M. works at Loyens & Loeff, European Direct Tax Law team and is a tax treaty adviser for the Macau special administrative region of the People’s Republic of China.

Prof. J. Richard Duke, Esq. is an attorney admitted in Alabama and Florida specializing over forty years in income and estate tax planning and compliance, as well as asset protection, for high net wealth families. He served as Counsel to the Ludwig von Mises Institute for Austrian Economics 1983-1989.

Dr. Jan Dyckmans, Esq. is a German attorney at Flick Gocke Schaumburg in Frankfurt am Main.

Arne Hansen is a legal trainee of the Hanseatisches Oberlandesgericht (Higher Regional Court of Hamburg), Germany.

Mark Heroux, J.D. is a Principal in the Tax Services Group at Baker Tilly who began his career in 1986 with the IRS Office of Chief Counsel.

Rob. H. Holt, Esq. is a practicing attorney of thirty years licensed in New York and Texas representing real estate investment companies.

Richard Kando, CPA (New York) is a Director at Navigant Consulting and served as a Special Agent with the IRS Criminal Investigation Division where he received the U.S. Department of Justice – Tax Division Assistant Attorney General’s Special Contribution Award.

Denis Kleinfeld, Esq., CPA. is a renown tax author over four decades specializing in international tax planning of high net wealth families. He is Of Counsel to Fuerst Ittleman David & Joseph, PL, in Miami, Florida and was employed as an attorney with the Internal Revenue Service in the Estate and Gift Tax Division.

Richard L. Knickerbocker, Esq. is the senior partner in the Los Angeles office of the Knickerbocker Law Group and the former City Attorney of the City of Santa Monica.

Saloi Abou-Jaoude’ Knickerbocker Saloi Abou-Jaoude’ Knickerbocker is a Legal Administrator in the Los Angeles office of the Knickerbocker Law Group concentrated on shari’a finance.

Jeffrey Locke, Esq. is Director at Navigant Consulting.

Josh Lom works at Herbert Smith Freehills LLP.

Prof. Stephen Polak is a Tax Professor at Thomas Jefferson School of Law’s International Tax & Financial Services Graduate Program where he lectures on Financial Products, Tax Procedure and Financial Crimes. As a U.S. Senior Internal Revenue Agent, Financial Products and Transaction Examiner he examined exotic financial products of large multi-national corporations. Currently, Prof. Polak is assigned to U.S. Internal Revenue Service’s three year National Research Program’s as a Federal State and Local Government Specialist where he examines states, cities, municipalities, and other governmental entities.

Dr. Maji C. Rhee is a professor of Waseda University located in Tokyo.

Jean Richard, Esq. a Canadian attorney, previously worked for the Quebec Tax Department, as a Senior Tax Manager with a large international accounting firm and as a Tax & Estate consultant for a pre-eminent Canadian insurance company. He is currently the Vice President and Sr. Wealth Management Consultant of the BMO Financial Group.

Michael J. Rinaldi, II, CPA. is a renown international tax accountant and author, responsible for the largest independent audit firm in Washington, D.C.

Edgardo Santiago-Torres, Esq., CPA, is also a Certified Public Accountant and a Chartered Global Management Accountant, pursuant to the AICPA and CIMA rules and regulations, admitted by the Puerto Rico Board of Accountancy to practice Public Accounting in Puerto Rico, and an attorney.

Hope M. Shoulders, Esq. is a licensed attorney in the State of New Jersey whom has previously worked for General Motors, National Transportation Safety Board and the Department of Commerce.

Jason Simpson, CAMS is the Director of the Miami office for Global Atlantic Partners, overseeing all operations in Florida, the Caribbean and most of Latin America. He has worked previously as a bank compliance employee at various large and mid-sized financial institutions over the past ten years. He has been a key component in the removal of Cease and Desist Orders as well as other written regulatory agreements within a number of Domestic and International Banks, and designed complete AML units for domestic as well as international banks with over three million clients.

Dr. Alberto Gil Soriano, Esq. worked at the European Commission’s Anti-Fraud Office in Brussels, and most recently at the Legal Department of the International Monetary Fund’s Financial Integrity Group in Washington, D.C. He currently works at the Fiscal Department of Uría Menéndez Abogados, S.L.P in Barcelona (Spain).

Lily L. Tse, CPA. is a partner of Rinaldi & Associates (Washington, D.C.).

Dr. Oliver Untersander, Esq. is partner at Tappolet & Partner in Zurich.

Mauricio Cano del Valle, Esq. is a Mexican attorney who previously worked for the Mexican Ministry of Finance (Secretaría de Hacienda) and Deloitte and Touche Mexico. He was Managing Director of the Amicorp Group Mexico City and San Diego offices, and now has his own law firm.

John Walker, Esq. is an accomplished attorney with a software engineering and architecture background.

Bruce Zagaris, Esq. is a partner at the Washington, D.C. law firm Berliner, Corcoran & Rowe, LLP.

Prof. William Byrnes was a Senior Manager then Associate Director at Coopers & Lybrand, before joining academia wherein he became a renowned author of 38 book and compendium volumes, 93 book & treatise chapters and supplements, and 800+ articles. He is Associate Dean of Thomas Jefferson School of Law’s International Taxation & Financial Services Program.

Dr. Robert J. Munro is the author of 35 published books is a Senior Research Fellow and Director of Research for North America of CIDOEC at Jesus College, Cambridge University, and head of the anti money laundering studies of Thomas Jefferson School of Law’s International Taxation & Financial Services Program.

Posted in book, FATCA | Tagged: FATCA, Internal Revenue Service, law, LexisNexis | Leave a Comment »

Second Edition of Lexis’ International Withholding Tax Treaty Guide released

Posted by William Byrnes on August 26, 2013

Associate Dean William Byrnes is also pleased to announce the publication of International Withholding Tax Treaty Guide, Second Edition by LexisNexis.

The second edition of International Withholding Tax Treaty Guide, authored by Professor William H. Byrnes and Dr. Robert J. Munro, includes new binders with new chapter structures of completely rewritten tax information and analysis. The second edition of Foreign Tax & Trade Briefs includes a new structure for all 110 country chapters to reflect the evolution of national tax systems since 1948. The International Withholding Tax Treaty Guide has been expanded to include many new countries to match the robust list of Foreign Tax & Trade Briefs, and its footnote numbering has been amended for brevity and modern coherence.

Moreover, International Withholding Tax Treaty Guide subscribers will receive new chapters of analysis and planning based on the OECD Model DTA articles and major trading country jurisprudence that are most relevant to corporate tax counsel, addressing topics such as capital gains, dividends, interest, rents, leasing income, royalties, and permanent establishment, as well as developing topics such as new standards of information exchange. Corporate counsel may combine these publications with the LexisNexis Matthew Bender publication Tax Havens of the World to form a complete international tax planning and risk management library.

Associate Dean William Byrnes said “The Second Edition completes my re-write process of this book to re-structure the citation architecture for a modern approach to tax treaty analysis,” Over the next two years I will author an in-depth, comparative analysis of tax treaty articles, to provide practitioners and arbitrators a go-to treatise for global corporate planning.”

William Byrnes continued “In 1974, Matthew Bender added a third binder to Foreign Tax & Trade Briefs, the International Withholding Tax Treaty Guide, to specifically address the important role of tax treaties in tax risk management that had developed in the sixties. By 1975, nearly one thousand tax treaties had been signed between countries based on the OECD’s Model with an additional 200 treaties in force based on the League of Nations Models. Moreover, many (former) territories had become independent, developing countries with the ability to establish their own tax treaties. There are now more than 3,200 tax treaties, of which 2,900 are signed and in effect with the remaining 300 yet to become effective by official legislative approval.”

Posted in book, Taxation | Tagged: Corporate tax, LexisNexis, OECD, Organisation for Economic Co-operation and Development, tax, Tax treaty, Withholding tax | Leave a Comment »

Practical Guide to U.S. Transfer Pricing coordinating author speaks …

Posted by William Byrnes on August 1, 2013

William Byrnes has been appointed a primary author for his sixth Lexis title.

Read Professor Byrnes’ comments at http://www.tjsl.edu/news-media/2013/9861

For the 2013 OECD policy initiative regarding multinational’s transfer pricing, see “Addressing Base Erosion and Profit Shifting” available at http://www.keepeek.com/Digital-Asset-Management/oecd/taxation/addressing-base-erosion-and-profit-shifting_9789264192744-en

and the more recently published “Action Plan on Base Erosion and Profit Shifting”: http://www.oecd.org/ctp/BEPSActionPlan.pdf

Posted in book, Transfer Pricing | Tagged: lexis, LexisNexis, transfer pricing, William Byrnes | Leave a Comment »

FATCA and Switzerland: Model II

Posted by William Byrnes on July 22, 2013

Note: The following is an excerpt from Chapter 19 of the LexisNexis® Guide to FATCA Compliance* – The title is now shipping to customers world-wide.

In General

…

Unlike Model I, the “Swiss” Model II does not establish automatic information exchange between governments. The Swiss government has thus not agreed to automatic information exchange between governmental authorities. Instead, the Swiss government has agreed that it will ensure that the Swiss financial institutions will be able to enter into an FFI agreement with the U.S. Treasury Department to directly report to the IRS (to become a “participating FFI”). In other words, the underlying mechanics of Model II are the same as under FATCA itself. The financial institutions organized under Swiss law annually report the U.S. accountholders and their U.S. beneficial owners.

For Switzerland it has become necessary to negotiate Model II, as Swiss law prohibits financial institutions from acting on behalf of a foreign government. Article 271 (1) of the Swiss Criminal Code states that “[a]ny person who carries out activities on behalf of a foreign state without lawful authority . . .”2 commits a crime. This provision would have put financial institutions in Switzerland in an untenable position where they would have had to decide whether they want to be in conflict with the Swiss Criminal Code or with FATCA. With the Model II Agreement, Swiss financial institutions have the guarantee that they will not be prosecuted in Switzerland if they report bank information to the IRS.3

… As regards existing U.S. accounts (and U.S. accounts yet to be opened), the relevant financial institution is to obtain prior consent from the accountholder regarding the reporting of bank information to the IRS. In particular, there is a duty to proceed actively. Where the accountholder declines consent, the financial institution may not deliver information to the IRS. Without prior consent it would violate Swiss banking secrecy rules, which are still in effect. What is reported, however, are “nameless aggregates” and the number of accounts that, in FATCA terms, belong to the “Recalcitrant Accountholders”.

This information is to form the basis of an IRS group request, through which the IRS, on request, can demandcomplete information on the Recalcitrant Accountholders.4 The group request provides the IRS, after a time lag, with the information that the financial institution would have reported according to the FATCA rules had it received consent to report (see article 2 2(c) of Model II).

It is interesting how the Model II agreement governs this group request mechanism, as the agreement includes no independent regulation, but refers in this regard to provisions of the double tax convention (article 2 2(a) of Model II). Nevertheless, the Model II itself provides that the group request and the requested information are “foreseeably relevant” within the meaning of the applicable relevant double tax convention. See article 2 2(b) of Model II: “The information requested […] shall be considered information that is foreseeably relevant […] covered by the Convention […].”5 The U.S. – Switzerland IGA Article 5 Exchange of Information provides that such requests shall be made pursuant to the Protocol of the Article 26 of the U.S. – Switzerland Double Tax Agreement when the Protocol enters into force. Furthermore, such requests shall apply only to information beginning upon the IGA’s entry into force. The requested information will be considered “…information that may be relevant for carrying out the administration or enforcement of the domestic laws of the United States …, without regard to whether the Reporting Swiss financial Institution or another party has contributed to noncompliance of the taxpayers in the group.”6

…

Analysis

…

The question now is what legal implications FATCA will entail in Switzerland, especially with regard to the group request reporting. The group request provision in Model II will, in our prediction, be tested in Swiss courts once the first account data of Recalcitrant Accountholders are the subject of an IRS group request. As regards the legal issues concerning this group request, the following points should suffice.

… read the entire chapter analysis excerpt at Lexis’ FATCA Central

______

[1] Agreement between the United States of America and Switzerland for Cooperation to Facilitate the Implementation of FATCA (February 14, 2013) (“U.S. – Switzerland IGA”) available at http://www.treasury.gov/resource-center/tax-policy/treaties/Documents/FATCA-Agreement-Switzerland-2-14-2013.pdf .

[2] Article 271 (1) of the Swiss Criminal Code. Emphasis added.

[3] Art. 4 of the U.S. – Switzerland IGA.

[4] Art. 5, Para. 1 of the U.S. – Switzerland IGA.

[5] Emphasis added. Model II also includes an exchangable phrase “may be relevant”.

[6] Article 5, para. 2 of the U.S. – Switzerland IGA.

[7] Article 6 of the U.S. – Switzerland IGA.

[8] Article 9 of the U.S. – Switzerland IGA.

[9] Annex II, Art. II, Para. A – Deemed-Compliant Financial Institutions.

…

Posted in Compliance, FATCA, Taxation | Tagged: FATCA, Financial institution, Foreign Account Tax Compliance Act, Internal Revenue Service, LexisNexis, Switzerland, United State, United States Department of the Treasury | Leave a Comment »

FATCA Withholding Compliance

Posted by William Byrnes on July 17, 2013

Note: The following is an excerpt from Chapter 11 of the LexisNexis® Guide to FATCA Compliance* – The title is now shipping to customers world-wide.

Importance of the Income Source

In cross-border transactions, the U.S. tax system, as well as the tax systems of most other nations or jurisdictions, contains rules to determine and identify items of income (or expense) derived from U.S. sources or foreign sources-referred to from the U.S, perspective as U.S. source income or foreign source income. This is generally referred to as the source of income rules. The U.S. Internal Revenue Code (IRC) contains source of income rules.1 Tax treaties also provide and often clarify source of income rules. The source of income rules provide the basis for taxation, but the operating rules are contained elsewhere in the IRC.

The income category generally determines the source of income rules. These rules attempt to assign income to a U.S. or non-U.S. source on a statutory basis by looking at the perception of what is the predominate situs (location) of the economic activity that generates the income, and the source of legal protections that facilitate such income generation.

Certain categories of U.S. source income are subject to withholding “at source”-i.e. in the U.S. Because the U.S. has no taxing authority or jurisdiction over foreign persons, the IRC finds one or more withholding agents who are required to withhold at source in the U.S. Generally when transfers of these certain categories of income are made to persons outside the U.S., the withholding agent in the U.S. withholds a certain percentage of the funds and remits the funds to the Internal Revenue Service (IRS). The withholding rules are generally described under the Qualified Intermediary (QI) program.

FATCA Is In Addition to QI

The U.S. added the Foreign Account Tax Compliance Act (FATCA) as an additional layer over QI.2 FATCA consists of worldwide reporting and withholding rules designed to greatly reduce U.S. tax noncompliance for accounts and certain assets held offshore by U.S. taxpayers. FATCA’s withholding rules are discussed in this chapter.

GENERAL RULE FOR WITHHOLDABLE PAYMENTS 3

…. read the entire chapter analysis excerpt at Lexis’ FATCA Central

_________

1 Primarily IRC §§ 861, 862, 863, 865.

2 See Chapter 10.

3 See Chapter 12.

Posted in Compliance, FATCA, Taxation | Tagged: FATCA, Foreign Account Tax Compliance Act, Internal Revenue Service, LexisNexis, tax, Taxation in the United States, United State, Withholding tax | 1 Comment »

U.S. Treasury delays FATCA withholding until July 1, 2014

Posted by William Byrnes on July 12, 2013

In a major U.S. Treasury announcement about FATCA this morning (July 12, 2013) titled “Engaging with More than 80 Countries to Combat Offshore Tax Evasion and Improve Global Tax Compliance”, Treasury extended by 6 months the start of the Foreign Account Tax Compliance Act (FATCA) withholding and account due diligence requirements.

Treasury stated that “due to overwhelming interest from countries around the world, a six-month extension to will be provided to allow more time to complete agreements with foreign jurisdictions.” Boiled down, Treasury has granted a 6 month extension, to July 1, 2014, for foreign financial institutions to achieve FATCA compliance because just three days before the FATCA Registration Portal should have opened, only 7 IGA have been agreed and signed by the United States and foreign countries.

FATCA Portal Opening Delayed

Moreover, on Monday, July 15, Treasury was supposed to open its FATCA Portal that foreign institutions could begin to register with the IRS. However, the IRS released Notice 2013-43 in conjunction with Treasury’s announcement that its FATCA portal would not be available before August 19, 2013. Thus, the IRS has had to push back the other key dates for registration by an additional 6 months as well. After the FATCA registration website opens, a financial institution will be able to begin the process of registering by creating an account and inputting the required information for itself, for its branch operations, and, if it serves as a “lead” financial institution, for other members of its expanded affiliated group.

The IRS will not issue any GIINs in 2013. Instead it expects to begin issuing GIINs as registrations are finalized in 2014. The IRS will electronically post the first IRS FFI List by June 2, 2014, and will update the list on a monthly basis thereafter. To ensure inclusion in the June 2014 IRS FFI List, FFIs would need to finalize their registration by the new deadline of April 25, 2014 instead of the original October 25, 2013 deadline.

6 Month Extension for New Account Opening Procedures

FATCA withholding agents generally will be required to implement new account opening procedures by July 1, 2014 instead of January 1. For Participating Foreign Financial Institutions (“PFFI”), new account opening procedures are correspondingly extended to at least July 1, 2014, but even further to the effective date of its FFI agreement if it registers timely via the FATCA Portal.

6 Month Extension for Pre-Existing Obligations

The IRS will modify the definition of “preexisting obligation” to take into account the new extended compliance deadlines. Accordingly, the definition will be modified:

With respect to a withholding agent other than a PFFI or a registered deemed-compliant FFI: any account, instrument, or contract maintained, executed, or issued by the withholding agent that is outstanding on June 30, 2014;
With respect to a PFFI: any account, instrument, or contract maintained, executed, or issued by the PFFI that is outstanding on the effective date of the FFI agreement; and
With respect to a registered deemed-compliant FFI: any account, instrument, or contract maintained, executed or issued by the FFI prior to the later of July 1, 2014, or the date on which the FFI registers as a deemed-compliant FFI and receives a GIIN.

Deadline Extension Coordination with Current and Future Intergovernmental Agreements (IGAs)

Treasury intends to include a similar change to the definition of the term “Preexisting Account” in both model IGAs. Thus, it is expected that future IGAs will define the term “Preexisting Account” to mean a Financial Account maintained as of June 30, 2014. For IGAs in force that contain the previous definition of the term “Preexisting Account,” the partner jurisdiction will be permitted under the coordination provision of the IGA to permit its FFIs to substitute the definition of the term “preexisting account” from the amended final regulations for the definition of the term “Preexisting Account” in the IGA. For IGAs concluded before the coordination provision was added, the coordination provision will apply through the operation of the most-favored nation provision once an IGA containing the coordination provision is in force.

2013 Eliminated As A FATCA Reportable Year

The final regulations provide that a PFFI will be required to file information reports on its U.S. accounts with respect to the 2013 and 2014 calendar years no later than March 31, 2015. Treasury and the IRS intend to modify these rules to require reporting on March 31, 2015, only with respect to the 2014 calendar year (for U.S. accounts identified by December 31, 2014).

Treatment of Financial Institutions Operating in Jurisdictions That Have Signed an Intergovernmental Agreement to Implement FATCA

A jurisdiction will be treated as having in effect an IGA if the jurisdiction is listed on the Treasury website as a jurisdiction that is treated as having an IGA in effect. In general, Treasury and the IRS intend to include on this list jurisdictions that have signed but have not yet brought into force an IGA. The list of jurisdictions that are treated as having an IGA in effect is available at the following address:

http://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCAArchive.aspx.

A financial institution resident in a jurisdiction that is treated as having an IGA in effect will be permitted to register on the FATCA registration website as a registered deemed-compliant FFI (which would include all reporting Model 1 FFIs) or PFFI (which would include all reporting Model 2 FFIs), as applicable. In addition, a financial institution may designate a branch located in such jurisdiction as not a limited branch.

A jurisdiction may be removed from the list of jurisdictions that are treated as having an IGA in effect if the jurisdiction fails to perform the steps necessary to bring the IGA into force within a reasonable period of time. If a jurisdiction is removed from the list, financial institutions that are residents of that jurisdiction, and branches that are located in that jurisdiction, will no longer be entitled to the status that would be provided under the IGA, and must update their status on the FATCA registration website accordingly.

FATCA Compliance Resource

For a 400 page analysis of how to cost effectively comply with FATCA, please see “LexisNexis® Guide to FATCA Compliance” containing 25 chapters for meaningful interactions among enterprise stakeholders, and between the FATCA Compliance Officer and the FATCA advisors and vendors, as well as analysis of the compliance requirements of the current IGAs signed by Treasury.

Posted in Compliance, FATCA, Taxation | Tagged: FATCA, Foreign Account Tax Compliance Act, IGA, Internal Revenue Service, IRS, LexisNexis, United States, United States Department of the Treasury | Leave a Comment »

Practical Considerations for Developing a FATCA Compliance Program

Posted by William Byrnes on May 14, 2013

Editor’s Note: The following is an excerpt from Chapter 2 of LexisNexis® Guide to FATCA Compliance by William Byrnes and Robert Munro.

…

The over-arching requirements for FATCA [the Foreign Account Tax Compliance Act] are three-fold:

obtain appropriate due diligence information and documentation for account holders, investors and payees;
report on relevant parties such as U.S. account holders, recalcitrant account holders and non-participating foreign financial institutions (“FFIs”); and
coordinate withholding as appropriate and if necessary. The requirements are largely intertwined, with due diligence serving as the foundation for the reporting and withholding requirements.

Now that the final FATCA Regulations are published and a number of intergovernmental agreements (“IGAs”) have been signed, FFIs must implement practical steps to be FATCA compliant by January 1, 2014. There is no one-size-fits-all compliance plan for FFIs; however, there are many similar and consistent steps FFIs, regardless of location, can take to develop a FATCA compliance program to meet the broad goal of FATCA: to combat offshore tax evasion by U.S. persons and become FATCA compliant.

Before a FFI can become FATCA compliant, a FFI should take certain preliminary steps to determine the impact FATCA will have on the FFI as well as plan the path toward compliance in an efficient and timely manner.

Early in the process, the FFI should develop a FATCA task force or program team that will oversee the day-to-day operations to becoming FATCA compliant. The task force should include representatives from tax, anti-money laundering (“AML”) and customer on-boarding groups, technology, change management and operations as well as, potentially, other stakeholders. The task force will oversee the broad program plan for the FFI and likely report to the FATCA sponsoring executives or steering committee.

FFIs have to determine what, if any, communications they will prepare for both internal and external stakeholders concerning FATCA. An internal awareness and training program should be developed to teach FFI employees about FATCA and its importance to the FFI. The awareness program should start at the highest level to establish the necessary “tone at the top.”

The FFI may also want to prepare a list of questions, a “FAQs of FATCA,” to ensure the FFI’s clients are receiving a consistent message, regardless of where in the world they are located. FFIs should also determine what if any message they want to provide directly to clients or put on their websites, although it is very important that the FFI does not give unintentional tax advice to its clients.

Additionally, some training of FFI staff, including client-facing personnel, could assist with customers of the FFI receiving a clear and consistent message. It may likely be the FFI’s client-facing personnel are already receiving questions from customers regarding FATCA.

FFIs should take a proactive approach to minimize costs and interference with the customer experience at the FFI. With that in mind, prior to developing a FATCA compliance strategy, FFIs should conduct an assessment of the impact FATCA will have on the FFI by collecting information relating to:

Number and activity of each legal entity and/or business line;
Products and services offered by the business line;
Types and volume of accounts;
Relevant policies and procedures; and
Identification of information technology (“IT”) systems and databases that maintain relevant information and may require updates.

The FFI should also determine what past interactions it has had with the IRS or home country tax authority relating to information reporting on their customers. FFIs may be able to leverage past reporting for FATCA compliance.

FFIs around the globe may rely on other parties to take on certain responsibilities. For example, a foreign fund may outsource some or all of its asset custody, compliance and regulatory functions, transfer agency services and/or distribution. In this case, the FATCA compliance program will only be as strong as the weakest link.

Coordinating and ensuring all relevant parties are working towards FATCA compliance will be important since a FATCA compliance failure on behalf of an agent of the FFI can be construed as a failure by the FFI itself. Asking questions of the FFI’s third-party service providers will be an important early step. If a third-party service provider is not working towards FATCA compliance, the FFI may want to re-assess their relationship and engagement with that party.

After the impact assessment is complete, the FFI will need to plan a path forward that not only makes all of the information technology systems and policy changes, but also develops a working corporate governance structure and functioning compliance program. …

Chapter contributors:

Jeffrey Locke, Esq. is Director at Navigant Consulting. Prior to joining Navigant, he served as an assistant New York state attorney general in the Criminal Prosecutions Bureau and worked in the prosecutor’s office for the United Nations in Kosovo.

Posted in Compliance, Money Laundering, OECD, Reporting, Tax Policy, Taxation | Tagged: FATCA, FFI, Foreign Account Tax Compliance Act, Internal Revenue Service, LexisNexis, Money Laundering, NFFE, tax | 1 Comment »

FATCA’s Application to Foreign Entities and Foreign Assets

Posted by William Byrnes on May 10, 2013

Editor’s Note: The following is an excerpt from Chapter 6 of LexisNexis® Guide to FATCA Compliance by William Byrnes and Robert Munro.

Types of Entities

The Foreign Account Tax Compliance Act (“FATCA”) provides for withholding taxes to enforce reporting requirements on specified foreign accounts owned by specified U.S. persons or by U.S. owned foreign entities.

FATCA requires specified U.S. persons (U.S. citizen, residents and certain non-resident aliens) and specified domestic entities to report interests in specified foreign financial assets (SFFAs) if the aggregate value of those assets exceeds certain threshold. The regulations apply to domestic entities formed or availed of to hold, directly or indirectly, specified foreign financial assets. These specified entities include certain closely held corporations and partnerships that meet certain conditions and aggregation rules. Specified entities include domestic trusts if they meet certain criteria and exceed certain reporting threshold.

A U.S. owned foreign entity is an entity with one or more substantial U.S. owners. With certain exceptions, a substantial U.S. owner is any U.S. person with greater than 10% direct or indirect ownership interest in the foreign entity.

FATCA applies to U.S. persons who have specified foreign financial assets (SFFAs) whose value exceeds certain thresholds. The IRS announced in January 2013 that reporting by domestic entities with interests in specified foreign financial assets will not be required to file the IRS reporting form for FATCA, Form 8938, until after the date specified by final regulations, which will not be earlier than taxable years beginning after December 31, 2012.1

All foreign entities and foreign trusts are potentially subject to FATCA, in addition to the current Qualified Intermediary (QI) rules. Withholding rules and reporting requirements under FATCA depend upon the entity’s classification. FATCA classifies foreign entities as either financial entities or non-financial entities. Financial entities are classified as Foreign Financial Institutions (FFIs) [see infra. Chapter 7] while non-financial entities are classified as Non-Financial Foreign Entities (NFFEs) [see infra. Chapter 8].

Entities and trusts are very different under U.S. law. Entities include partnerships, limited liability companies (LLCs), international business companies (IBCs), foundations, usufructs, and corporations. In entities, the title to the property owned is not divided.

In a trust, however, U.S. law splits the ownership of the title into two parts, legal and equitable. The trustee of the trust owns the legal title for the benefit of the beneficiary, who owns the equitable title. A trust is a relationship, not an entity, and is treated differently under both the existing QI rules and FATCA.

Specified Foreign Financial Assets (SFFAs)

Financial Accounts

The most common type of SFFA that banks will encounter is a financial account such as any depository or custodial account that is maintained by an FFI.2 A financial account also includes non-publically traded equity or debt interest in a depository or custodial institution, an insurance company, or an investment entity.3 …

Moreover, a financial account includes a non-publically traded equity or debt interest in a holding company or treasury center in an expanded affiliated group [See infra. Chapter 8]. This applies if the holding company or treasury center has at least one investment entity or passive NFFE and the income of the investment entity or passive NFFE in the group exceeds 50% of the group’s aggregate income.4 …

Assets

SFFAs include assets not held in an account. Stocks and securities issued by a non-U.S. person that are held for investment are SFFAs whether they are held in an account with a FFI or not. The same holds true for capital or profits interests in a foreign partnership, any form of debt issued by a non-U.S. person, or a beneficial interest in a foreign trust, foreign estate, or foreign entity. A litany of financial instruments collectively referred to as “swaps” are also SFFAs whether held in an account or not. Options and derivative instruments that have any non-U.S. parties or are issued by a non-U.S. issuer are also SFFAs.5 …

Exemptions from SFFA Definitions

FATCA does provide exemptions. An interest in a foreign security or social insurance program is not a SFFA. A stock of precious metals held in a foreign safe deposit box is not a SFFA. Any security or partnership interest used or held in the conduct of normal trade or business is considered not to be held for investment under FATCA. Stock, however, cannot be considered to be held in the conduct of normal trade or business for purposes of FATCA. Therefore, foreign stock is a SFFA.6 …

Example of SFFA

To clarify what may be considered an SFFA, consider the following example. Mr. Smith, a U.S. person resident in the U.S., has $1 million in a Swiss bank account. He owns a partnership interest in a hedge fund established in the Cayman Islands, and directly owns 5,000 shares of a publically traded Japanese corporation, JapanCo. He also has social security benefits in a foreign country. …

1. IRS Notice 2013-10, “Information Reporting by Domestic Entities under Section 6038D with Respect to Specified Foreign Financial Assets”.

2. IRC §1471(d)(2), Treas Reg §1.1471-5(b)(1)(i), (ii).

3. IRC §1471(d)(2), Treas Reg §1.1471-5(b)(1)(iii)(A). “Investment entity” is defined in Treas Reg §1.1471-5(e)(4)(i).

4. IRC §1471(d)(2), Treas Reg §1.1471-5(b)(1)(iii)(B)(1). “Treasury center” is defined in Treas Reg §1.1471-5(e)(1)(v).

5. See generally IRS Form 8938, Statement of Specified Foreign Financial Assets.

6. See generally IRS Form 8938, Statement of Specified Foreign Financial Assets.

7. Foreign social security or social insurance programs are not specified as FFA, so they are not subject to FATCA reporting. Instructions to IRS Form 8938, Statement of Specified Foreign Financial Assets, p. 4.

Posted in Compliance, Reporting, Tax Policy, Taxation, Uncategorized | Tagged: Cayman Islands, FATCA, FFI, Finance, Foreign Account Tax Compliance Act, Internal Revenue Service, international tax, IRS, LexisNexis, Limited liability company, NFFE, tax | Leave a Comment »

LexisNexis® Guide to FATCA Compliance release …

Posted by William Byrnes on May 3, 2013

Over 400 pages of compliance analysis !! now available with the 20% discount code link in this flier –> LN Guide to FATCA_flier.

Contributing FATCA Expert Practitioners