U.S. IRS Extends FATCA TIN Relief Through 2027

by | Dec 20, 2024 | Accounting, Income Tax, Tech News

The U.S. Internal Revenue Service (IRS) has expanded temporary compliance relief for financial institutions (FIs) struggling to obtain U.S. Taxpayer Identification Numbers (TINs) under the Foreign Account Tax Compliance Act (FATCA). Notice 2024-78, issued in October 2024, extends relief originally granted under Notice 2023-11 through calendar years 2025, 2026, and 2027—but imposes stricter reporting conditions.

Key Developments:

  1. Extended Relief Period: FIs will not be deemed in “significant non-compliance” for failing to report U.S. TINs on preexisting accounts until 2028, provided they meet new requirements.
  2. Critical New Obligations:
    • Foreign TIN Reporting: If an FI’s electronic records contain a Foreign Taxpayer Identification Number (FTIN) for a U.S. person lacking a TIN, the FTIN must be reported.
    • AddressFix Mandate: FIs must use the AddressFix element to submit the city and country of residence for all specified U.S. persons with missing TINs.
  3. Scope: Applies solely to preexisting accounts where TIN sourcing remains challenging despite documented due diligence.

Context:

Notice 2023-11 initially offered procedural relief to FIs facing systemic hurdles in obtaining U.S. TINs. The extension acknowledges persistent operational challenges but tightens oversight by requiring supplemental taxpayer identifiers (FTINs) and enhanced residency data.

Compliance Implications:

FIs leveraging this relief must implement systems updates immediately to capture and report FTINs and AddressFix data. Failure to meet these new conditions voids relief eligibility, exposing institutions to penalties for non-compliance.

This update is critical for financial institutions across Singapore and FATCA-partner jurisdictions managing U.S. account holder reporting. Institutions should prioritize system adjustments to align with the enhanced 2025-2027 requirements.

Singapore’s Inland Revenue Authority (IRAS) has updated its FATCA FAQ (Section B.9) detailing technical implementation. FIs are advised to review these guidelines alongside the IRS notices.

Source: IRAS, 19 December 2024.