This section lists the table of contents for §§1.1471-1 through 1.1474-7 and §301.1474-1 of this chapter.
§1.1471-1 Scope of chapter 4 and definitions.
(a) Scope of chapter 4 of the Internal Revenue Code.
(b) Definitions.
(1) Account.
(2) Account holder.
(3) Active NFFE.
(4) AML due diligence.
(5) Annuity contract.
(6) Assumes primary withholding responsibility.
(7) Backup withholding.
(8) Beneficial owner.
(9) Blocked account.
(10) Branch.
(11) Broker.
(12) Cash value.
(13) Cash value insurance contract.
(14) Certified deemed-compliant FFI.
(15) Change in circumstances.
(16) Chapter 3.
(17) Chapter 4.
(18) Chapter 4 reportable amount.
(19) Chapter 4 status.
(20) Chapter 4 withholding rate pool.
(21) Clearing organization.
(22) Complex trust.
(23) Consolidated obligations.
(24) Custodial account.
(25) Custodial institution.
(26) Customer master file.
(27) Deemed-compliant FFI.
(28) Deferred annuity contract.
(29) Depository account.
(30) Depository institution.
(31) Direct reporting NFFE.
(32) Documentary evidence.
(33) Documentation.
(34) Dormant account.
(35) Effective date of the FFI agreement.
(36) EIN.
(37) Election to be withheld upon.
(38) Electronically searchable information.
(39) Entity.
(40) Entity account.
(41) Excepted NFFE.
(42) Exempt beneficial owner.
(43) Exempt recipient.
(44) Expanded affiliated group.
(45) FATF.
(46) FATF-compliant jurisdiction.
(47) FFI.
(48) FFI agreement.
(49) Financial account.
(50) Financial institution.
(51) Flow-through entity.
(52) Flow-through withholding certificate.
(53) Foreign entity.
(54) Foreign passthru payment.
(55) Foreign payee.
(56) Foreign person.
(57) GIIN.
(58) Grandfathered obligation.
(59) Grantor trust.
(60) Gross proceeds.
(61) Group annuity contract.
(62) Group insurance contract.
(63) Immediate annuity.
(64) Individual account.
(65) Insurance company.
(66) Insurance contract.
(67) Intergovernmental agreement (IGA).
(68) Intermediary.
(69) Intermediary withholding certificate.
(70) Investment entity.
(71) Investment-linked annuity contract.
(72) Investment-linked insurance contract.
(73) IRS FFI list.
(74) Life annuity contract.
(75) Life insurance contract.
(76) Limited branch.
(77) Limited FFI.
(78) Model 1 IGA.
(79) Model 2 IGA.
(80) NFFE.
(81) Non-exempt recipient.
(82) Nonparticipating FFI.
(83) Nonreporting IGA FFI.
(84) Non-U.S. account.
(85) NQI.
(86) NWP.
(87) NWT.
(88) Offshore obligation.
(89) Owner.
(90) Owner-documented FFI.
(91) Participating FFI.
(92) Participating FFI group.
(93) Partnership.
(94) Passive NFFE.
(95) Passthru payment.
(96) Payee.
(97) Payment with respect to an offshore obligation.
(98) Payor.
(99) Permanent residence address.
(100) Person.
(101) Preexisting account.
(102) Preexisting entity account.
(103) Preexisting individual account.
(104) Preexisting obligation.
(105) Pre-FATCA Form W-8.
(106) Prima facie FFI.
(107) QI.
(108) QI agreement.
(109) QI branch of a U.S. financial institution.
(110) Recalcitrant account holder.
(111) Registered deemed-compliant FFI.
(112) Relationship manager.
(113) Reportable payment.
(114) Reporting Model 1 FFI.
(115) Reporting Model 2 FFI.
(116) Responsible officer.
(117) Restricted distributor.
(118) Simple trust.
(119) Specified insurance company.
(120) Specified U.S. person.
(121) Sponsored FFI.
(122) Sponsored FFI group.
(123) Sponsored direct reporting NFFE.
(124) Sponsoring entity.
(125) Standardized industry coding system.
(126) Standing instructions to pay amounts.
(127) Subject to withholding.
(128) Substantial U.S. owner.
(129) Territory entity.
(130) Territory financial institution.
(131) Territory financial institution treated as a U.S. person.
(132) Territory NFFE.
(133) TIN.
(134) U.S. account.
(135) U.S. branch treated as a U.S. person.
(136) U.S. financial institution.
(137) U.S. indicia.
(138) U.S. owned foreign entity.
(139) U.S. payee.
(140) U.S. payor.
(141) U.S. person.
(142) U.S. source FDAP income.
(143) U.S. territory.
(144) U.S. withholding agent.
(145) Withholdable payment.
(146) Withholding.
(147) Withholding agent.
(148) Withholding certificate.
(149) WP.
(150) Written statement.
(151) WT.
(c) Effective/applicability date.
§1.1471-2 Requirement to deduct and withhold tax on withholdable payments to certain FFIs.
(a) Requirement to withhold on payments to FFIs.
(1) General rule of withholding.
(2) Special withholding rules.
(i) Requirement to withhold on payments of U.S. source FDAP income to participating FFIs and deemed-compliant FFIs that are NQIs, NWPs, or NWTs, and U.S. branches acting as intermediaries.
(ii) Residual withholding responsibility of intermediaries and flow-through entities.
(iii) Requirement to withhold if a participating FFI or registered deemed-compliant FFI makes an election to be withheld upon.
(A) Election to be withheld upon for U.S. source FDAP income.
(B) Election to be withheld upon for gross proceeds.
(iv) Withholding obligation of a territory financial institution.
(v) Withholding obligation of a foreign branch of a U.S. financial institution.
(vi) Payments of gross proceeds.
(3) Coordination of withholding under sections 1471(a) and (b).
(4) Payments for which no withholding is required.
(i) Exception to withholding if the withholding agent lacks control, custody, or knowledge.
(A) In general.
(B) Example.
(ii) Exception to withholding for certain payments made prior to July 1, 2016 (transitional).
(iii) Payments to a participating FFI.
(iv) Payments to a deemed-compliant FFI.
(v) Payments to an exempt beneficial owner.
(vi) Payments to a territory financial institution.
(vii) Payments to an account held with a clearing organization with FATCA-compliant membership.
(viii) Payments to certain excepted accounts.
(5) Withholding requirements if source or character of payment is unknown.
(b) Grandfathered obligations.
(1) Grandfathered treatment of outstanding obligations.
(2) Definitions.
(i) Grandfathered obligation.
(ii) Obligation.
(iii) Date outstanding.
(iv) Material modification.
(3) Application to flow-through entities.
(i) Partnerships.
(ii) Simple trusts.
(iii) Grantor trusts.
(4) Determination by withholding agent of grandfathered treatment.
(i) In general.
(ii) Determination of material modification.
(iii) Record retention.
(c) Effective/applicability date.
§1.1471-3 Identification of payee.
(a) Payee defined.
(1) In general.
(2) Payee with respect to a financial account.
(3) Exceptions.
(i) Certain foreign agents or intermediaries.
(ii) Foreign flow-through entity.
(iii) U.S. intermediary or agent of a foreign person.
(iv) Territory financial institution.
(v) Disregarded entity or limited branch.
(vi) U.S. branch of treated as a U.S. person.
(vii) Foreign branch of a U.S. person.
(b) Determination of payee's status.
(1) Determining whether a payment is received by an intermediary.
(2) Determination of entity type.
(3) Determination of whether the payment is made to a QI, WP, or WT.
(4) Determination of whether the payee is receiving effectively connected income.
(c) Rules for reliably associating a payment with a withholding certificate or other appropriate documentation.
(1) In general.
(2) Reliably associating a payment with documentation if a payment is made through an intermediary or flow-through entity that is not the payee.
(i) In general.
(ii) Exception to entity account documentation rules for an offshore account of an intermediary or flow-through entity.
(3) Requirements for validity of certificates.
(i) Form W-9.
(ii) Beneficial owner withholding certificate (Form W-8BEN).
(iii) Withholding certificate of an intermediary, flow-through entity, or U.S. branch (Form W-8IMY).
(A) In general.
(B) Withholding statement.
(1) In general.
(2) Special requirements for an FFI withholding statement.
(3) Special requirements for a chapter 4 withholding statement.
(4) Special requirements for an exempt beneficial owner withholding statement.
(5) Nonqualified intermediary withholding statement.
(C) Failure to provide allocation information.
(D) Special rules applicable to a withholding certificate of a QI that assumes primary withholding responsibility under chapter 3.
(E) Special rules applicable to a withholding certificate of a QI that does not assume primary withholding responsibility under chapter 3.
(F) Special rules applicable to a withholding certificate of a territory financial institution that agrees to be treated as a U.S. person.
(G) Special rules applicable to a withholding certificate of a territory financial institution that does not agree to be treated as a U.S. person.
(H) Rules applicable to a withholding certificate of a U.S. branch.
(iv) Certificate for exempt status (Form W-8EXP).
(v) Certificate for effectively connected income (Form W-8ECI).
(4) Requirements for written statements.
(5) Requirements for documentary evidence.
(i) Foreign status.
(A) Certificate of residence.
(B) Individual government identification.
(C) QI documentation.
(D) Entity government documentation.
(E) Third-party credit report.
(ii) Chapter 4 status.
(A) General documentary evidence.
(B) Preexisting obligation documentary evidence.
(C) Payee-specific documentary evidence.
(6) Applicable rules for withholding certificates, written statements, and documentary evidence.
(i) Who may sign the withholding certificate or written statement.
(ii) Period of validity.
(A) General rule.
(B) Indefinite validity.
(C) Indefinite validity in the case of certain offshore obligations.
(D) Exception for certificate for effectively connected income.
(E) Change in circumstances.
(1) Defined.
(2) Obligation to notify withholding agent of a change in circumstances.
(3) Withholding agent's obligation with respect to a change in circumstances.
(iii) Record retention.
(A) In general.
(B) Exception for documentary evidence received with respect to offshore obligations.
(iv) Electronic transmission of withholding certificate, written statement, and documentary evidence.
(v) Acceptable substitute withholding certificate.
(A) In general.
(B) Non-IRS form for individuals.
(vi) Electronic confirmation of TIN on withholding certificate.
(vii) Reliance on a prior version of a withholding certificate.
(7) Curing documentation errors.
(i) Curing inconsequential errors on a withholding certificate.
(ii) Documentation received after the time of payment.
(8) Documentation furnished on account-by-account basis unless exception provided for sharing documentation within expanded affiliated group.
(i) Single branch systems.
(ii) Universal account systems.
(iii) Shared account systems.
(iv) Document sharing for gross proceeds.
(v) Preexisting account.
(9) Reliance on documentation collected by or certifications provided by other persons.
(i) Shared documentation system maintained by an agent.
(ii) Third-party data providers.
(iii) Reliance on certification provided by introducing brokers.
(iv) Reliance on documentation and certifications provided between principals and agents.
(A) In general.
(B) Reliance upon certification of the principal.
(C) Document sharing.
(D) Examples.
(v) Reliance upon documentation for accounts acquired in merger or bulk acquisition for value.
(d) Documentation requirements to establish payee's chapter 4 status.
(1) Reliance on pre-FATCA Form W-8.
(2) Identification of U.S. persons.
(i) In general.
(ii) Reliance on documentary evidence.
(iii) Preexisting obligations.
(3) Identification of individuals that are foreign persons.
(i) In general.
(ii) Exception for offshore obligations.
(4) Identification of participating FFIs and registered deemed-compliant FFIs.
(i) In general.
(ii) Exception for payments made prior to January 1, 2017, with respect to preexisting obligations (transitional).
(iii) Exception for offshore obligations.
(iv) Exceptions for payments to reporting Model 1 FFIs.
(v) Reason to know.
(vi) Sponsored investment entities and sponsored controlled foreign corporations.
(A) In general.
(B) Payments made prior to January 1, 2017 (transitional).
(C) Payments made after December 31, 2016, to payees documented prior to January 1, 2017.
(5) Identification of certified deemed-compliant FFIs.
(i) In general.
(ii) Sponsored, closely-held investment vehicles.
(A) In general.
(B) Offshore obligations.
(iii) Certain investment entities that do not maintain financial accounts.
(A) In general.
(B) Offshore obligations.
(6) Identification of owner-documented FFIs.
(i) In general.
(ii) Auditor's letter substitute.
(iii) Documentation for owners and debt holders of payee.
(iv) Content of FFI owner reporting statement.
(v) Exception for preexisting obligations (transitional).
(vi) Exception for offshore obligations.
(vii) Exception for certain offshore obligations of $1,000,000 or less.
(7) Nonreporting IGA FFIs.
(i) In general.
(ii) Exception for offshore obligations.
(8) Identification of nonparticipating FFIs.
(i) In general.
(ii) Special documentation rules for payments made to an exempt beneficial owner through a nonparticipating FFI.
(9) Identification of exempt beneficial owners.
(i) Identification of foreign governments, governments of U.S. territories, international organizations, and foreign central banks of issue.
(A) In general.
(B) Exception for offshore obligations.
(C) Exception for preexisting offshore obligations.
(ii) Identification of retirement funds.
(A) In general.
(B) Exception for offshore obligations.
(C) Exception for preexisting offshore obligations.
(iii) Identification of entities wholly owned by exempt beneficial owners.
(10) Identification of territory financial institutions.
(i) Identification of territory financial institutions that are beneficial owners.
(A) In general.
(B) Exception for preexisting offshore obligations.
(ii) Identification of territory financial institutions acting as intermediaries or that are flow-through entities.
(iii) Reason to know.
(11) Identification of excepted NFFEs.
(i) Identification of excepted nonfinancial group entities.
(A) In general.
(B) Exception for offshore obligations.
(ii) Identification of excepted nonfinancial start-up companies.
(A) In general.
(B) Exception for offshore obligations.
(C) Exception for preexisting offshore obligations.
(iii) Identification of excepted nonfinancial entities in liquidation or bankruptcy.
(A) In general.
(B) Exception for offshore obligations.
(C) Exception for preexisting offshore obligations.
(iv) Identification of section 501(c) organizations.
(A) In general.
(B) Reason to know.
(v) Identification of non-profit organizations.
(A) In general.
(B) Exception for offshore obligations.
(C) Exception for preexisting offshore obligations.
(D) Reason to know.
(vi) Identification of NFFEs that are publicly traded corporations.
(A) Exception for offshore obligations.
(B) Exception for preexisting offshore obligations.
(vii) Identification of NFFE affiliates.
(A) Exception for offshore obligations.
(B) Exception for preexisting offshore obligations.
(viii) Identification of excepted territory NFFEs.
(A) Exception for payments made prior to January 1, 2017, with respect to preexisting obligations of $1,000,000 or less (transitional).
(B) Exception for offshore obligations.
(C) Exception for preexisting offshore obligations of $1,000,000 or less.
(ix) Identification of active NFFEs.
(A) Exception for offshore obligations.
(B) Exception for preexisting offshore obligations.
(C) Limit on reason to know.
(x) Identifying a direct reporting NFFE (other than a sponsored direct reporting NFFE).
(A) In general.
(B) Exception for offshore obligations.
(C) Special rule for preexisting offshore obligations.
(xi) Identifying a sponsored direct reporting NFFE.
(A) In general.
(1) Payments made prior to January 1, 2017 (transitional).
(2) Payments made after December 31, 2016, to payees documented prior to January 1, 2017.
(B) Exception for offshore obligations.
(xii) Identification of excepted inter-affiliate FFI.
(A) In general.
(B) Offshore obligations.
(C) Reason to know.
(12) Identification of passive NFFEs.
(i) Exception for offshore obligations.
(ii) Special rule for preexisting offshore obligations.
(iii) Required owner certification for passive NFFEs.
(A) In general.
(B) Exception for preexisting obligations of $1,000,000 or less (transitional).
(e) Standards of knowledge.
(1) In general.
(2) Notification by the IRS.
(3) GIIN verification.
(i) In general.
(ii) Special rules for reporting Model 1 FFIs.
(iii) Special rules for direct reporting NFFEs.
(iv) Special rules for sponsored direct reporting NFFEs and sponsoring entities.
(A) Sponsored direct reporting NFFEs.
(B) Sponsoring entities (transitional).
(4) Reason to know.
(i) Reason to know regarding an entity's chapter 4 status.
(ii) Reason to know applicable to withholding certificates.
(A) In general.
(B) Withholding certificate provided by an FFI.
(iii) Reason to know applicable to written statements.
(iv) Reason to know applicable to documentary evidence.
(A) In general.
(B) Standards of knowledge applicable to certain types of documentary evidence.
(v) Specific standards of knowledge applicable when only documentary evidence is a code or classification described in paragraph (c)(5)(ii)(B) of this section.
(A) U.S. indicia for entities.
(B) Documentation required to cure U.S. indicia.
(vi) Specific standards of knowledge applicable to documentation received from intermediaries and flow-through entities.
(A) In general.
(B) Limits on reason to know with respect to documentation received from participating FFIs and registered deemed-compliant FFIs that are intermediaries or flow-through entities.
(vii) Limits on reason to know.
(A) Scope of review for preexisting obligations of entities.
(B) Reason to know there are U.S. indicia associated with preexisting obligations.
(C) Reason to know there are U.S. indicia associated with preexisting offshore obligations.
(D) Limits on reason to know for multiple obligations belonging to a single person.
(viii) Reasonable explanation supporting claim of foreign status.
(5) Conduit financing arrangements.
(6) Additional guidance.
(f) Presumptions regarding chapter 4 status of the person receiving the payment in the absence of documentation.
(1) In general.
(2) Presumptions of classification as an individual or entity and entity as the beneficial owner.
(3) Presumptions of U.S. or foreign status.
(4) Presumption of chapter 4 status for a foreign entity.
(5) Presumption of chapter 4 status of payee with respect to a payment to an intermediary or flow-through entity.
(6) Presumption of effectively connected income for payments to certain U.S. branches.
(7) Joint payees.
(i) In general.
(ii) Exception for offshore obligations.
(8) Rebuttal of presumptions.
(9) Effect of reliance on presumptions and of actual knowledge or reason to know otherwise.
(i) In general.
(ii) Actual knowledge or reason to know that amount of withholding is greater than is required under the presumptions or that reporting of the payment is required.
(g) Effective/applicability date.
§1.1471-4 FFI agreement.
(a) In general.
(1) Withholding.
(2) Identification and documentation of account holders.
(3) Reporting.
(4) Expanded affiliated group.
(5) Verification.
(6) Event of default.
(7) Refunds.
(b) Withholding requirements.
(1) In general.
(2) Withholding determination.
(3) Satisfaction of withholding requirements.
(i) In general.
(ii) Withholding not required.
(iii) Election to withhold under section 3406.
(4) Foreign passthru payments.
(5) Withholding on limited FFIs and limited branches.
(i) Limited FFIs.
(ii) Limited branches.
(6) Special rule for dormant accounts.
(7) Withholding requirements for U.S. branches of FFIs treated as U.S. persons.
(c) Due diligence for the identification and documentation of account holders and payees.
(1) Scope of paragraph.
(2) General rules for the identification and documentation of account holders and payees.
(i) Overview.
(ii) Standards of knowledge.
(A) In general.
(B) Limits on reason to know with respect to certain accounts acquired in merger of bulk acquisition.
(1) In general.
(2) Participating FFIs and certain deemed-compliant FFIs that apply the due diligence rules, and U.S. financial institutions.
(iii) Change in circumstances.
(A) Obligation to identify a change in circumstances.
(B) Definition of change in circumstances.
(C) Requirements following a change in circumstances.
(iv) Record retention.
(v) Documentation rules for U.S. branches of FFIs that are treated as U.S. persons.
(3) Identification and documentation procedure for entity accounts and payees.
(i) In general.
(ii) Timeframe for applying identification and documentation procedure for entity accounts and payees.
(iii) Documentation exception for certain preexisting entity accounts.
(A) Accounts to which this exception applies.
(B) Aggregation of entity accounts.
(C) Election to forgo exception.
(4) Identification and documentation procedure for individual accounts other than preexisting accounts.
(i) In general.
(ii) Reliance on third-party for identification of individual accounts other than preexisting accounts.
(iii) Alternative identification and documentation procedure for certain cash value insurance or annuity contracts.
(A) Group cash value insurance contracts or group annuity contracts.
(B) Accounts held by beneficiaries of a cash value insurance contract that is a life insurance contract.
(5) Identification and documentation procedure for preexisting individual accounts.
(i) In general.
(ii) Special rule for preexisting individual accounts previously documented as U.S. accounts for purposes of chapter 3 or 61.
(iii) Exceptions for certain low value preexisting individual accounts.
(A) Accounts to which an exception applies.
(B) Aggregation of accounts.
(C) Election to forgo exception.
(iv) Specific identification and documentation procedures for preexisting individual accounts.
(A) In general.
(B) U.S. indicia and relevant documentation rules.
(1) U.S. indicia.
(2) Documentation to be retained upon identifying U.S. indicia.
(i) Designation of account holder as a U.S. citizen or resident.
(ii) Unambiguous indication of a U.S. place of birth.
(iii) U.S. address or U.S. mailing address.
(iv) Only U.S. telephone numbers.
(v) U.S. telephone numbers and non-U.S. telephone numbers.
(vi) Standing instructions to pay amounts.
(vii) Power of attorney or signatory authority granted to a person with a U.S. address or “in-care-of” address or “hold mail” address.
(C) Electronic search for identifying U.S. indicia.
(D) Enhanced review for identifying U.S. indicia in the case of certain high-value accounts.
(1) In general.
(2) Relationship manager inquiry.
(3) Additional review of non-electronic records.
(4) Limitations on the enhanced review in the case of comprehensive electronically searchable information.
(E) Exception for preexisting individual accounts previously documented as held by foreign individuals.
(6) Examples.
(7) Certifications of responsible officer.
(d) Account reporting.
(1) Scope of paragraph.
(2) Reporting requirements in general.
(i) Accounts subject to reporting.
(ii) Financial institution required to report an account.
(A) In general.
(B) Special reporting of account holders of territory financial institutions.
(C) Special reporting of account holders of a sponsored FFI.
(D) Special reporting of accounts held by owner-documented FFIs.
(E) Requirement to identify the GIIN of a branch that maintains an account.
(F) Reporting by participating FFIs and registered deemed-compliant FFIs (including QIs, WPs, WTs, and certain U.S. branches not treated as U.S. persons) for accounts of nonparticipating FFIs (transitional).
(G) Combined reporting on Form 8966 following merger or bulk acquisition.
(iii) Special U.S. account reporting rules for U.S. payors.
(A) Special reporting rule for U.S. payors other than U.S. branches.
(B) Special reporting rules for U.S. branches treated as U.S. persons.
(C) Rules for U.S. branches of FFIs not treated as U.S. persons.
(3) Reporting of accounts under section 1471(c)(1).
(i) In general.
(ii) Accounts held by specified U.S. persons.
(iii) Accounts held by U.S. owned foreign entities.
(iv) Special reporting of accounts held by owner-documented FFIs.
(v) Form for reporting accounts under section 1471(c)(1).
(vi) Time and manner of filing.
(vii) Extensions in filing.
(4) Descriptions applicable to reporting requirements of §1.1471-4(d)(3).
(i) Address.
(ii) Account number.
(iii) Account balance or value.
(A) In general.
(B) Currency translation of account balance or value.
(iv) Payments made with respect to an account.
(A) Depository accounts.
(B) Custodial accounts.
(C) Other accounts.
(D) Transfers and closings of deposit, custodial, insurance, and annuity financial accounts.
(E) Amount and character of payments subject to reporting.
(F) Currency translation.
(v) Record retention requirements.
(5) Election to perform chapter 61 reporting.
(i) In general.
(A) Election under section 1471(c)(2).
(B) Election to report in a manner similar to section 6047(d).
(ii) Additional information to be reported.
(iii) Special reporting of accounts held by owner-documented FFIs.
(iv) Branch reporting.
(v) Time and manner of making the election.
(vi) Revocation of election.
(vii) Filing of information under election.
(6) Reporting on recalcitrant account holders.
(i) In general.
(ii) Definition of dormant account.
(iii) End of dormancy.
(iv) Forms.
(v) Time and manner of filing.
(vi) Extensions in filing.
(vii) Record retention requirements.
(7) Special reporting rules with respect to the 2014 and 2015 calendar years.
(i) In general.
(ii) Participating FFIs that report under §1.1471-4(d)(3).
(A) Reporting with respect to the 2014 calendar year.
(B) Reporting with respect to the 2015 calendar year.
(iii) Participating FFIs that report under §1.1471-4(d)(5).
(iv) Forms for reporting.
(A) In general.
(B) Special determination date and timing for reporting with respect to the 2014 calendar year.
(8) Reporting requirements of QIs, WPs and WTs.
(9) Examples.
(e) Expanded affiliated group requirements.
(1) In general.
(2) Limited branches.
(i) In general.
(ii) Branch defined.
(iii) Limited branch defined.
(iv) Conditions for limited branch status.
(v) Term of limited branch status (transitional).
(vi) Exception from restriction on opening U.S. accounts and nonparticipating FFI accounts.
(3) Limited FFI.
(i) In general.
(ii) Limited FFI defined.
(iii) Conditions for limited FFI status.
(iv) Period for limited FFI status (transitional).
(v) Exception from registration requirement.
(A) Conditions for exception.
(B) Confirmation requirements of lead FI.
(vi) Exception from restriction on opening U.S. accounts and nonparticipating FFI accounts.
(4) Special rule for QIs.
(f) Verification.
(1) In general.
(2) Compliance program.
(i) In general.
(ii) Consolidated compliance program.
(A) In general.
(B) Requirements of compliance FI.
(1) Periodic certification.
(i) In general.
(ii) Late-joining electing FFIs.
(2) Preexisting account certification.
(3) Certification of compliance.
(i) In general.
(ii) Certification of effective internal controls.
(iii) Qualified certification.
(iv) Material failures defined.
(4) IRS review of compliance.
(i) General inquiries.
(ii) Inquiries regarding substantial non-compliance.
(g) Event of default.
(1) Defined.
(2) Notice of event of default.
(3) Remediation of event of default.
(h) Collective credit or refund procedures for overpayments.
(1) In general.
(2) Persons for which a collective refund is not permitted.
(3) Payments for which a collective refund is permitted.
(4) Procedural and other requirements for collective refund.
(i) Legal prohibitions on reporting U.S. accounts and withholding.
(1) In general.
(2) Requesting waiver or closure of a U.S. account.
(3) Legal prohibitions preventing withholding.
(i) In general.
(ii) Block or transfer accounts or obligations.
(j) Effective/applicability date.
(1) In general.
(2) Special applicability date.
§1.1471-5 Definitions applicable to section 1471.
(a) U.S. accounts.
(1) In general.
(2) Definition of U.S. account.
(3) Account holder.
(i) In general.
(ii) Financial accounts held by agents that are not financial institutions.
(iii) Jointly held accounts.
(iv) Account holder for insurance and annuity contracts.
(v) Examples.
(4) Exceptions to U.S. account status.
(i) Exception for certain individual accounts of participating FFIs.
(ii) Election to forgo exception.
(iii) Example.
(b) Financial accounts.
(1) In general.
(i) Depository account.
(ii) Custodial account.
(iii) Equity or debt interest.
(A) Equity or debt interests in an investment entity.
(B) Certain equity or debt interests in a holding company or treasury center.
(C) Equity or debt interests in other financial institutions.
(iv) Insurance and annuity contracts.
(2) Exceptions.
(i) Certain savings accounts.
(A) Retirement and pension accounts.
(B) Non-retirement savings accounts.
(C) Rollovers.
(D) Coordination with section 6038D.
(E) Account that is tax-favored.
(ii) Certain term life insurance contracts.
(iii) Account held by an estate.
(iv) Certain escrow accounts.
(v) Certain annuity contracts.
(vi) Account or product excluded under an intergovernmental agreement.
(3) Definitions.
(i) Depository account.
(A) In general.
(B) Exceptions.
(ii) Custodial account.
(iii) Equity interest in certain entities.
(A) Partnership.
(B) Trust.
(iv) Regularly traded on an established securities market.
(v) Value of interest determined, directly or indirectly, primarily by reference to assets that give rise (or could give rise) to withholdable payments.
(A) Equity interest.
(B) Debt interest.
(vi) Return earned on the interest (including upon a sale, exchange, or redemption) determined, directly or indirectly, primarily by reference to one or more investment entities or passive NFFEs.
(A) Equity interest.
(B) Debt interest.
(vii) Cash value insurance contract.
(A) In general.
(B) Cash value.
(C) Amounts excluded from cash value.
(D) Policyholder dividend.
(4) Account balance or value.
(i) In general.
(ii) Special rule for immediate annuity.
(A) Immediate annuities without minimum benefit guarantees.
(B) Immediate annuities with a minimum benefit guarantee.
(C) Net present value of amounts payable in future periods.
(iii) Account aggregation requirements.
(A) In general.
(B) Aggregation rule for relationship managers.
(C) Examples.
(iv) Currency translation of balance or value.
(5) Account maintained by financial institution.
(c) U.S. owned foreign entity.
(d) Definition of FFI.
(e) Definition of financial institution.
(1) In general.
(2) Banking or similar business.
(i) In general.
(ii) Exception for certain lessors and lenders.
(iii) Application of section 581.
(iv) Effect of local regulation.
(3) Holding financial assets for others as a substantial portion of its business.
(i) Substantial portion.
(A) In general.
(B) Special rule for start-up entities.
(ii) Income attributable to holding financial assets and related financial services.
(iii) Effect of local regulation.
(4) Investment entity.
(i) In general.
(ii) Financial assets.
(iii) Primarily conducts as a business.
(A) In general.
(B) Special rule for start-up entities.
(iv) Primarily attributable to investing, reinvesting, or trading in financial assets.
(A) In general.
(B) Special rule for start-up entities.
(v) Examples.
(5) Exclusions.
(i) Excepted nonfinancial group entities.
(A) In general.
(B) Nonfinancial group.
(C) Holding company.
(D) Treasury center.
(E) Captive finance company.
(ii) Excepted nonfinancial start-up companies or companies entering a new line of business.
(A) In general.
(B) Exception for investment funds.
(iii) Excepted nonfinancial entities in liquidation or bankruptcy.
(iv) Excepted inter-affiliate FFI.
(v) Section 501(c) entities.
(vi) Non-profit organizations.
(6) Reserving activities of an insurance company.
(f) Deemed-compliant FFIs.
(1) Registered deemed-compliant FFIs.
(i) Registered deemed-compliant FFI categories.
(A) Local FFIs.
(B) Nonreporting members of participating FFI groups.
(C) Qualified collective investment vehicles.
(D) Restricted funds.
(E) Qualified credit card issuers and servicers.
(F) Sponsored investment entities and controlled foreign corporations.
(ii) Procedural requirements for registered deemed-compliant FFIs.
(iii) Deemed-compliant FFI that is merged or acquired.
(iv) IRS review of compliance by registered deemed-compliant FFIs.
(A) General inquiries.
(B) Inquiries regarding substantial non-compliance.
(2) Certified deemed-compliant FFIs.
(i) Nonregistering local bank.
(ii) FFIs with only low-value accounts.
(iii) Sponsored, closely-held investment vehicles.
(iv) Limited life debt investment entities (transitional).
(v) Certain investment entities that do not maintain financial accounts.
(3) Owner-documented FFIs.
(i) In general.
(ii) Requirements of owner-documented FFI status.
(4) Definition of a restricted distributor.
(g) Recalcitrant account holders.
(1) Scope.
(2) Recalcitrant account holder.
(3) Start of recalcitrant account holder status.
(i) Preexisting accounts identified under the procedures described in §1.1471-4(c) for identifying U.S. accounts.
(A) In general.
(B) Accounts other than high-value accounts.
(C) High-value accounts.
(D) Preexisting accounts that become high-value accounts.
(ii) Accounts that are not preexisting accounts and accounts requiring name/TIN correction.
(iii) Accounts with changes in circumstances.
(4) End of recalcitrant account holder status.
(h) Passthru payment.
(1) Defined.
(2) Foreign passthru payment.
(i) Expanded affiliated group.
(1) Scope of paragraph.
(2) Expanded affiliated group defined.
(3) Member of expanded affiliated group.
(4) Ownership test.
(i) Corporations.
(A) Stock not to include certain preferred stock.
(B) Valuation.
(ii) Partnerships.
(iii) Trusts.
(5) Treatment of warrants, options, and obligations convertible into equity for determining ownership.
(6) Exception for FFIs holding certain capital investments.
(7) Seed capital.
(8) Anti-abuse rule.
(9) Exception for limited life debt investment entities.
(10) Partnerships, trusts, and other non-corporate entities.
(j) Sponsoring entity verification.
(1) In general.
(2) Compliance program.
(3) Certification of compliance.
(i) Certification requirement.
(A) In general.
(B) Extension of time for the certification period ending on December 31, 2017.
(ii) Late-joining sponsored FFIs.
(iii) Certification period.
(iv) Additional certifications or information.
(v) Certifications regarding sponsoring entity and sponsored FFI requirements.
(vi) Certifications regarding internal controls.
(A) Certification of effective internal controls.
(B) Qualified certification.
(vii) Material failures defined.
(4) IRS review of compliance.
(i) General inquiries.
(ii) Inquiries regarding substantial non-compliance.
(iii) Compliance procedures for a sponsored FFI subject to a Model 2 IGA.
(5) Preexisting account certification.
(6) Sponsorship agreement.
(k) Sponsoring entity event of default.
(1) Defined.
(2) Notice of event of default.
(3) Remediation of event of default.
(4) Termination.
(i) In general.
(ii) Termination of sponsoring entity.
(iii) Termination of sponsored FFI.
(iv) Reconsideration of notice of default or notice of termination.
(v) Sponsoring entity of sponsored FFIs subject to a Model 2 IGA.
(l) Trustee-documented trust verification.
(1) Compliance program.
(2) Certification of compliance.
(i) Certification requirement.
(A) In general.
(B) Extension of time for the certification period ending on December 31, 2017.
(ii) Late-joining trustee-documented trusts.
(iii) Certification period.
(iv) Certifications.
(3) IRS review of compliance by trustees of trustee-documented trusts.
(i) General inquiries.
(ii) Inquiries regarding substantial non-compliance.
(m) Applicability date.
§1.1471-6 Payments beneficially owned by exempt beneficial owners.
(a) In general.
(b) Any foreign government, any political subdivision of a foreign government, or any wholly owned agency or instrumentality of any one or more of the foregoing.
(1) Integral part.
(2) Controlled entity.
(3) Inurement to the benefit of private persons.
(c) Any international organization or any wholly owned agency or instrumentality thereof.
(d) Foreign central bank of issue.
(1) In general.
(2) Separate instrumentality.
(3) Bank for International Settlements.
(4) Income on certain transactions.
(e) Governments of U.S. territories.
(f) Certain retirement funds.
(1) Treaty-qualified retirement fund.
(2) Broad participation retirement fund.
(3) Narrow participation retirement funds.
(4) Fund formed pursuant to a plan similar to a section 401(a) plan.
(5) Investment vehicles exclusively for retirement funds.
(6) Pension fund of an exempt beneficial owner.
(7) Example.
(g) Entities wholly owned by exempt beneficial owners.
(h) Exception for commercial activities.
(1) General rule.
(2) Limitation.
(i) Effective/applicability date.
§1.1472-1 Withholding on NFFEs.
(a) In general.
(b) Withholdable payments made to an NFFE.
(1) In general.
(2) Transitional relief.
(c) Exceptions.
(1) Payments to an excepted NFFE.
(i) Publicly traded corporation.
(A) Regularly traded.
(B) Special rules regarding the regularly traded requirement.
(1) Year of initial public offering.
(2) Classes of stock treated as meeting the regularly traded requirement.
(3) Anti-abuse rule.
(C) Established securities market.
(1) In general.
(2) Foreign exchange with multiple tiers.
(3) Computation of dollar value of stock traded.
(ii) Certain affiliated entities related to a publicly traded corporation.
(iii) Certain territory entities.
(iv) Active NFFEs.
(A) Passive income.
(B) Exceptions from passive income treatment.
(C) Methods of measuring assets.
(v) Excepted nonfinancial entities.
(vi) Direct reporting NFFEs.
(vii) Sponsored direct reporting NFFEs.
(2) Payments made to an exempt beneficial owner.
(3) Definition of direct reporting NFFE.
(4) Election to be treated as a direct reporting NFFE.
(i) Manner of making election.
(ii) Effective date of election.
(iii) Revocation of election by NFFE.
(iv) Revocation of election by Commissioner.
(v) Event of default.
(vi) Notice of event of default.
(vii) Remediation of event of default.
(5) Election by a direct reporting NFFE to be treated as a sponsored direct reporting NFFE.
(i) Definition of sponsored direct reporting NFFE.
(ii) Requirements for sponsoring entity of a sponsored direct reporting NFFE.
(iii) Revocation of status as sponsoring entity.
(iv) Liability of sponsoring entity.
(d) Rules for determining payee and beneficial owner.
(1) In general.
(2) Payments made to a NFFE that is a QI, WP, or WT.
(3) Payments made to a partner or beneficiary of an NFFE that is an NWP or NWT.
(4) Payments made to a beneficial owner that is an NFFE.
(5) Absence of valid documentation.
(e) Information reporting requirements.
(1) Reporting on withholdable payments.
(2) Reporting on substantial U.S. owners.
(f) Sponsoring entity verification.
(1) In general.
(2) Certification of compliance.
(i) Certification requirement.
(A) In general.
(B) Extension of time for the certification period ending on December 31, 2017.
(ii) Late-joining sponsored direct reporting NFFEs.
(iii) Certification period.
(iv) Certifications.
(3) IRS review of compliance.
(i) General inquiries.
(ii) Inquiries regarding substantial non-compliance.
(4) Sponsorship agreement.
(g) Sponsoring entity event of default.
(1) Defined.
(2) Notice of event of default.
(3) Remediation of event of default.
(4) Termination.
(i) In general.
(ii) Termination of sponsoring entity.
(iii) Termination of sponsored direct reporting NFFE.
(iv) Reconsideration of notice of default or notice of termination.
(h) Effective/applicability date.
§1.1473-1 Section 1473 definitions.
(a) Definition of withholdable payment.
(1) In general.
(2) U.S. source FDAP income defined.
(i) In general.
(A) FDAP income defined.
(B) U.S. source.
(C) Exceptions to withholding on U.S. source FDAP income not applicable under chapter 4.
(ii) Special rule for certain interest.
(iii) Original issue discount.
(iv) REMIC residual interests.
(v) Withholding liability of payee that is satisfied by withholding agent.
(vi) Special rule for sales of interest bearing debt obligations.
(vii) Payment of U.S. source FDAP income.
(A) Amount of payment of U.S. source FDAP income.
(B) When payment of U.S. source FDAP income is made.
(3) Gross proceeds defined.
(i) Sale or other disposition.
(A) In general.
(B) Special rule for sales effected by brokers.
(C) Special rule for gross proceeds from sales settled by a clearing organization.
(ii) Property of a type that can produce interest or dividend payments that would be U.S. source FDAP income.
(A) In general.
(B) Contracts producing dividend equivalent payments.
(C) Regulated investment company distributions.
(iii) Payment of gross proceeds.
(A) When gross proceeds are paid.
(B) Amount of gross proceeds.
(4) Payments not treated as withholdable payments.
(i) Certain short-term obligations.
(ii) Effectively connected income.
(iii) Excluded nonfinancial payments.
(iv) Gross proceeds from sales of excluded property.
(v) Fractional shares.
(vi) Offshore payments of U.S. source FDAP income prior to 2017 (transitional).
(vii) Collateral arrangements prior to 2017 (transitional).
(viii) Certain dividend equivalents.
(5) Special payment rules for flow-through entities, complex trusts, and estates.
(i) In general.
(ii) Partnerships.
(iii) Simple trusts.
(iv) Complex trusts and estates.
(v) Grantor trusts.
(vi) Special rule for an NWP or NWT.
(vii) Special rules for determining when gross proceeds are treated as paid to a partner, owner, or beneficiary of a flow-through entity.
(6) Reporting of withholdable payments.
(7) Example.
(b) Substantial U.S. owner.
(1) Definition.
(2) Indirect ownership of foreign entities.
(i) Indirect ownership of stock.
(ii) Indirect ownership in a foreign partnership or ownership of a beneficial interest in a foreign trust.
(iii) Ownership and holdings through options.
(iv) Determination of proportionate interest.
(v) Interests owned or held by a related person.
(3) Beneficial interest in a foreign trust.
(i) In general.
(ii) Determining the 10 percent threshold in the case of a beneficial interest in a foreign trust.
(4) Exceptions.
(i) De minimis amount or value exception.
(ii) Trusts wholly owned by certain U.S. persons.
(5) Special rule for certain financial institutions.
(6) Determination dates for substantial U.S. owners.
(7) Examples.
(c) Specified U.S. person.
(d) Withholding agent.
(1) In general.
(2) Participating FFIs and registered deemed-compliant FFIs as withholding agents.
(3) Grantor trusts as withholding agents.
(4) Deposit and return requirements.
(5) Multiple withholding agents.
(6) Exception for certain individuals.
(e) Foreign entity.
(f) Effective/applicability date.
§1.1474-1 Liability for withheld tax and withholding agent reporting.
(a) Payment and returns of tax withheld.
(1) In general.
(2) Withholding agent liability.
(3) Use of agents.
(i) In general.
(ii) Authorized agent.
(iii) Liability of withholding agent acting through an agent.
(4) Liability for failure to obtain documentation timely or to act in accordance with applicable presumptions.
(i) In general.
(ii) Withholding satisfied by another withholding agent.
(b) Payment of withheld tax.
(1) In general.
(2) Special rule for foreign passthru payments and payments of gross proceeds that include an undetermined amount of income subject to tax.
(c) Income tax return.
(1) In general.
(2) Participating FFIs, registered deemed-compliant FFIs, and U.S. branches treated as U.S. persons.
(3) Amended returns.
(d) Information returns for payment reporting.
(1) Filing requirement.
(i) In general.
(ii) Recipient.
(A) Defined.
(B) Persons that are not recipients.
(2) Amounts subject to reporting.
(i) In general.
(ii) Exception to reporting.
(iii) Coordination with chapter 3.
(3) Required information.
(4) Method of reporting.
(i) Payments by U.S. withholding agent to recipients.
(A) Payments to certain entities that are beneficial owners.
(B) Payments to participating FFIs, deemed-compliant FFIs, and certain QIs.
(C) Amounts paid to a U.S. branch.
(D) Amounts paid to territory financial institutions that are flow-through entities or acting as intermediaries.
(E) Amounts paid to NFFEs.
(ii) Payments made by withholding agents to certain entities that are not recipients.
(A) Entities that provide information for a withholding agent to perform specific payee reporting.
(B) Nonparticipating FFI that is a flow-through entity or intermediary.
(C) Disregarded entities.
(iii) Reporting by participating FFIs and deemed-compliant FFIs (including QIs, WPs, and WTs) and U.S. branches not treated as U.S. persons.
(A) In general.
(B) Special reporting requirements of participating FFIs, deemed-compliant FFIs, FFIs that make an election under section 1471(b)(3), and U.S. branches not treated as U.S. persons.
(C) Reporting by a U.S. branch treated as a U.S. person.
(iv) Reporting by territory financial institutions.
(v) Nonparticipating FFIs.
(vi) Other withholding agents.
(vii) Combined Form 1042-S reporting.
(e) Magnetic media reporting.
(f) Indemnification of withholding agent.
(g) Extensions of time to file Forms 1042 and 1042-S.
(h) Penalties.
(i) Additional reporting requirements with respect to U.S. owned foreign entities and owner-documented FFIs.
(1) Reporting by certain withholding agents with respect to owner-documented FFIs.
(2) Reporting by certain withholding agents with respect to U.S. owned foreign entities that are NFFEs.
(3) Cross reference to reporting by participating FFIs.
(4) Extensions of time to file.
(j) Effective/applicability date.
§1.1474-2 Adjustments for overwithholding or underwithholding of tax.
(a) Adjustments of overwithheld tax.
(1) In general.
(2) Overwithholding.
(3) Reimbursement of tax.
(i) General rule.
(ii) Record maintenance.
(4) Set-offs.
(5) Examples.
(b) Withholding of additional tax when underwithholding occurs.
(c) Effective/applicability date.
§1.1474-3 Withheld tax as credit to beneficial owner of income.
(a) Creditable tax.
(b) Amounts paid to persons that are not the beneficial owners.
(c) Effective/applicability date.
§1.1474-4 Tax paid only once.
(a) Tax paid.
(b) Effective/applicability date.
§1.1474-5 Refunds or credits.
(a) Refund and credit.
(1) In general.
(2) Limitation to refund and credit for a nonparticipating FFI.
(3) Requirement to provide additional documentation for certain beneficial owners.
(i) In general.
(ii) Claim of reduced withholding under an income tax treaty.
(iii) Additional documentation to be furnished to the IRS for certain NFFEs.
(b) Tax repaid to payee.
(c) Effective/applicability date.
§1.1474-6 Coordination of chapter 4 with other withholding provisions.
(a) In general.
(b) Coordination of withholding for amounts subject to withholding under sections 1441, 1442, and 1443.
(1) In general.
(2) When withholding is applied.
(3) Special rule for certain substitute dividend payments.
(c) Coordination with amounts subject to withholding under section 1445.
(1) In general.
(2) Determining the amount of the distribution from certain domestic corporations subject to section 1445 or chapter 4 withholding.
(d) Coordination with section 1446.
(1) In general.
(2) Determining the amount of distribution subject to section 1446.
(e) Example.
(f) Coordination with section 3406.
(g) Effective/applicability date.
§1.1474-7 Confidentiality of information.
(a) Confidentiality of information.
(b) Exception for disclosure of participating FFIs.
(c) Effective/applicability date.
§301.1474-1 Required use of magnetic media for financial institutions filing Form 1042-S or Form 8966.
(a) Financial institutions filing certain information returns.
(b) Waiver.
(c) Failure to file.
(d) Meaning of terms.
(1) Magnetic media.
(2) Financial institution.
(e) Effective/applicability date.
[T.D. 9610, 78 FR 5899, Jan. 28, 2013; 78 FR 55203, Sept. 10, 2013; as amended by T.D. 9809, 82 FR 2144, Jan. 6, 2017; T.D. 9852, 84 FR 10979, Mar. 25, 2019; T.D. 9890, 85 FR 204, Jan. 2, 2020]
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