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FATCA: The Global Financial System Must Now Implement a New U.S. Reporting and Withholding System for Foreign Account Tax Compliance, Which Will Create Significant New Exposures - Managing this Risk (Part III)

109 Pages Posted: 18 Dec 2010  

Dean Marsan

Formerly Charles Schwab and Co., Inc.

Date Written: September 1, 2010

Abstract

This part of the article discusses common types of with-holdable payments, the impact of fatca on audited financial statements, investor disclosure for fatca, investment fund fatca issues, the possible U.S. Treasury guidance on customer accounts and best practices for customer accounts, comparison of the qualified intermediary rules to the new rules for foreign financial institutions, the importance of distinguishing between foreign financial institutions and non-financial foreign entities, the need for clarification of whose treaty rights are waived if the FFI elects out of withholding responsibility, the general fatca provisions, confidentiality, effective date and grandfather rules, comments on the successful implementation of Chapter 4 and coordination with Chapter 3 and related prioritization issues, reporting of foreign financial assets and the definition of “specified foreign financial asset,” the new PFIC reporting rules, electronic filing of certain information returns, abusive equity swaps, the Stop Tax Haven Abuse Act proposal to withhold on dividend equivalents, the 2010 Green Book proposal to prevent the avoidance of dividend withholding taxes, the tax treatment of substitute dividends and dividend equivalent payments received by foreign persons, the repeal of certain foreign exceptions to the registered bond provisions, foreign trust provisions, IRS U.S. withholding tax and information reporting examinations, the IRS Industry Directive on total return swaps, liabilities for U.S. withholding tax, interest and penalties, including the new 6-year statute of limitations, new penalties for failure to disclose foreign financial assets and the new 40% accuracy related penalty for undisclosed foreign financial assets, U.S. account exposures, prophylactic planning and action steps, corporate governance and compliance to manage the U.S. account risk.

Keywords: FATCA, HIRE Act, withholding, withholding taxes, reporting, reserves, financial institutions, investment funds, private equity, evasion, governance, FAS 5, FIN 48, withholdable payments, financial account, FFI agreement, FFI, NFFE, QI, PFIC, Chapter 4, Chapter 3, electronic filing, privacy waiver

Suggested Citation

Marsan, Dean, FATCA: The Global Financial System Must Now Implement a New U.S. Reporting and Withholding System for Foreign Account Tax Compliance, Which Will Create Significant New Exposures - Managing this Risk (Part III) (September 1, 2010). Taxes - The Tax Magazine, Vol. 88, No. 9, 2010. Available at SSRN: https://ssrn.com/abstract=1726093

Dean Marsan (Contact Author)

Formerly Charles Schwab and Co., Inc. ( email )

CO
United States
917.669.9422 (Phone)

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