The IRS issues transitory relief for Model 1 IGA FFIs that do not have TINs for pre-existing US clients
On September 25, 2017 the IRS released Notice 2017-46 that provides transitory relief for Model 1 IGA FFIs that do not hold a US TIN in relation to FATCA reportable accounts of pre-existing clients, including US specified persons and controlling persons. The Model 1 IGA generally requires FFIs to obtain a US TIN from pre-existing US clients before January 1, 2017, and starting with the FATCA reporting for the 2017 tax year a US TIN must be reported.
Many FFIs are concerned that the inability to obtain US TINs from pre-existing US clients may result in a finding of significant non-compliance with the IGA requirement by the IRS. To address this issue, the transitory relief in Notice 2017-46 provides that FFIs will not be considered non-compliant in case: 1) the FFI reports the client’s date of birth in the FATCA report (for individuals), 2) the FFI requests a US TIN from affected clients annually, and 3) prior to performing FATCA reporting for the 2017 tax year the FFI searches its electronic records for the missing US TINs. This transitional relief applies to calendar years 2017, 2018 and 2019.
Model I IGA FFIs that do not have US TINs for FATCA reportable clients should implement policies and procedures in 2017 in order to meet the provisions of this transitory relief.