(a) Financial institutions filing certain information returns. If a financial institution is required to file a Form 1042-S, “Foreign Person's U.S. Source Income Subject to Withholding,” (or such other form as the IRS may prescribe) under §1.1474-1(d) of this chapter, the financial institution must file the information required by the applicable forms and schedules on magnetic media. Additionally, if a financial institution is required to file Form 8966, “FATCA Report,” (or such other form as the IRS may prescribe) to report certain information about U.S. accounts, substantial U.S. owners of foreign entities, or owner-documented FFIs as required under this chapter, the financial institution must file the required information on magnetic media or other machine-readable form. Returns filed on magnetic media must be made in accordance with applicable regulations, revenue procedures, publications, forms, instructions, and the IRS.gov Internet site. In prescribing regulations, revenue procedures, publications, forms, and instructions, including those on the IRS.gov Internet site, the Commissioner may direct the type of magnetic media or other machine-readable form used for filing.

(b) Waiver. The Commissioner may grant waivers from the requirements of this section in cases of undue hardship. A request for waiver must be made in accordance with applicable revenue procedures or publications. The waiver also will be subject to such terms and conditions regarding the method of filing as may be prescribed by the Commissioner.

(c) Failure to file. If a financial institution fails to file a Form 1042-S or a Form 8966 on magnetic media when required to do so by this section, the financial institution is deemed to have failed to comply with the information reporting requirements under section 6721 of the Code. See section 6724(c) for failure to meet magnetic media requirements. In determining whether there is reasonable cause for failure to file the return, §301.6651-1(c) and rules similar to the rules in §301.6724-1(c)(3) (undue economic hardship related to filing information returns on magnetic media) will apply.

(d) Meaning of terms. The following definitions apply for purposes of this section—(1) Magnetic media. The term magnetic media means any magnetic media permitted under applicable regulations, revenue procedures, publications, forms, or instructions. These generally include magnetic tape, tape cartridge, and diskette, as well as other media, such as electronic filing, specifically permitted under the applicable regulations, revenue procedures, publications, forms, or instructions.

(2) Financial institution. The term financial institution has the meaning set forth in section 1471(d)(5) of the Code and the regulations thereunder.

(e) Effective/applicability date. This section applies to any Form 1042-S or Form 8966 (or any other form that the IRS may prescribe) filed with respect to calendar years ending after December 31, 2013.

[T.D. 9610, 78 FR 5994, Jan. 28, 2013, as amended by T.D. 9809, 82 FR 2192, Jan. 6, 2017]