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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.