The IRS recently announced it will soon begin a review of Global Intermediary Identification Numbers (“GIIN”) to identify unused sponsor GIINs. A dormant sponsor GIIN exists when no sponsored entities have been registered under the sponsor GIIN. The IRS will soon be notifying financial institutions (“FI”) with a dormant sponsor GIIN via the FATCA Portal and request its cancellation.

A sponsor GIIN is used to identify an FI (sponsor FI) that agrees to perform the FATCA due diligence and reporting on behalf of another FI (sponsored FI). The sponsor FI will register the sponsored FI on the FATCA Portal and the sponsored FI is issued a GIIN that is associated with the GIIN of the sponsor FI. Sponsor GIINs are commonly used for funds and trusts.

It is unclear how the IRS plans to address cases of certified deemed-compliant sponsored FIs. For example, the sponsor FI of a ‘Closely Held Investment Vehicle’ must hold a sponsor GIIN but the sponsored FI, as a certified deemed-compliant FI, is not issued a GIIN.

We recommend that FIs that possess a sponsor GIIN perform a review of their sponsor profile on the FATCA Portal to ensure that sponsored FIs are registered, and in case the sponsor GIIN in no longer needed to cancel the dormant sponsor GIIN.

On the first of January the IRS sent an email to all QIs informing them that the renewal of the QI agreement was available and must be completed by March 1, 2023. Many of our clients, after checking their home page on the Qualified Intermediary Application and Account Management System (“QAAMS”), contacted us asking why there was no renewal option in the activity center. We noticed that the affected QIs with the missing renewal link had performed a renewal for the 2017 QI agreement.

Did the absence of the renewal link mean that the 2023 QI agreement was automatically renewed for these QIs or was it a glitch on the part of the IRS? It turns out to the be the latter, and last Friday (January 20, 2023) the IRS released Issue Number 2023-01 acknowledging that the renewal link was not available for some QIs and that steps were being taken to ensure that this link will be available to all QIs.

Importantly, the 2017 QI agreement expired on December 31, 2022 and in order to retain QI status from January 1, 2023 a QI must agree to the terms of the 2023 QI agreement (contained in Revenue Procedure 2022-43).

Due to the unavailability of the renewal link the IRS has extended the deadline to perform the renewal of the QI agreement from March 1, 2023 to May 1, 2023.

The renewal procedure is pretty straightforward and requires confirmation of the responsible officer and contact person, indication of prior name in case of a name change as well as general information regarding the QI. Note that Part 2 of the renewal procedure, which requests statistical information (e.g., the number and type of clients and value of assets), does not need to be completed (enter zeros or leave the pre-populated figures).

There are two important requirements to note: First, the QI must confirm it has performed the required QI reporting in the period prior to renewal (e.g., Form 1042, Form 1042-S and Form 1099). Second, as a condition to renew the QI agreement (or to obtain QI status), the QI will be required to consent to having its name, status as a QI and QI-EIN disclosed on a public list to be published by the IRS.

We recommend that QIs monitor their profile on QAAMS and timely perform the renwal in order to maintain QI status from January 1, 2023.

The IRS is currently implementing enhanced sign in procedures for access to on-line services, including access to the QI Portal. The enhanced sign in procedure for the QI Portal will require users to create an account with Once the account has been created, a second level password will be required which is sent to the user’s mobile phone.

Currently, once a user signs in to the QI portal a new page appears with the following options:

  • Create an account;
  • Sign in with; or
  • Sign in with an existing IRS username.

By selecting the last option (sign in with an existing IRS username) users can enter the QI Portal with their existing username and password without creating an account. The IRS has not indicated when the enhanced sign in procedure will be completed, thus it is recommended to migrate to an account.

In case a user selects to create an account, care needs to be taken to ensure that:

  • The user name exactly matches the email address associated with user.
  • The password must contain at least eight characters and include a lower case and upper case letter and a number.
  • The first name and last name of the user exactly matches the names registered on the QI Portal.

Before creating an account we recommend accessing the QI portal (with an existing IRS username) and conserve a copy of the current users and their associated email addresses.

Changes Incorporate New PTP Withholding and Reporting Rules – Notice 2022-23

The current QI agreement, Revenue Procedure 2017-15, will expire on December 31, 2022. The IRS has issued  Notice 2022-23 that contains changes to the QI agreement and the IRS is expected to publish the final version of the new QI agreement before the end of the year. The new QI agreement will take effect on January 1, 2023.

The primary changes to the QI agreement contained in Notice 2022-23 relate to recent US tax changes under section 1446(f), applicable to the sale of publicly traded partnership (“PTP”) interests by non-US persons. Under section 1446(f), the purchaser of a PTP interest from a non-US person must apply 10% withholding on the sales proceeds. Section 1446(a) retains the current withholding on PTP distributions to non-US partners: 37% in case of non-US individual partners and 21% for non-US corporate partners.

The changes in Notice 2022-23 are designed to facilitate withholding and reporting obligations of QIs whose clients hold PTP interests. Specifically, the changes cover three areas; documentation of non-US clients that invest in PTPs, implementation of procedures to ensure PTP transactions are properly taxed and reported, and nominee reporting.

Note that Notice 2022-23 also changes the documentation and reporting procedures for QIs that make payments of PTP distributions or proceeds from the sale of PTP interests to private arrangement intermediaries, nonqualified intermediaries, non-US partnerships and non-US trusts. Discussion of these changes are not addressed in this news alert.