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2026 Investment Management Tax Reporting and Withholding Conference Key Takeaways  

2026 Investment Management Tax Reporting & Withholding Conference Key Takeaways (Featured Image)

This month’s Comply Connect looks a little different. 

On February 4, we sponsored and attended the 2026 Investment Management Tax Reporting and Withholding Conference in New York. Regulators, tax leaders, and industry practitioners gathered to discuss major developments in digital asset reporting, FATCA/CRS enforcement, treaty changes, and operational compliance risks. 

If you weren’t able to attend — or just want a refresher — here are the key takeaways and what they mean in practice. 

As always, we’re happy to connect to discuss how these changes may impact your organization and how automation can help reduce operational burden. 

CRS (Common Reporting Standard) 2.0

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Enhanced Reporting Standards: 

  • New data elements include account types, joint account details, controlling-person roles, and classifications of accounts.

Implementation Timeline: 

  • CRS 2.0 becomes effective January 1, 2026, with first exchange of information in 2027 for the 2026 reporting year.

Operational Readiness: 

  • CRS 2.0 is not just a schema update — it requires operational redesign. Investment managers should: 
    • Perform gap analyses against current onboarding data 
    • Update due diligence procedures 
    • Upgrade systems to capture expanded data fields 
    • Strengthen governance, documentation, and training

This is an infrastructure change, not a reporting tweak. 

CARF (Crypto-Asset Reporting Framework) Updates

Global Adoption: 

  • 48 jurisdictions will begin CARF exchange by 2027, with another 27 by 2028. The U.S. is expected to join by 2029.

Key Requirements: 

  • Investment managers must assess readiness for CARF alongside CRS 2.0 implementation. 
  • CARF introduces transaction-level crypto reporting and requires expanded self-certifications identifying controlling persons.

Challenges for Asset Managers: 

  • CARF introduces new compliance obligations, such as identifying controlling persons and reporting equity interests in partnerships. 
  • Systems must be upgraded to capture and report crypto-asset transactions accurate.

Global Enforcement Trends

Enforcement Actions: 

  • Regulatory fines are increasing, particularly in regions like the UAE, where enforcement is becoming more frequent and visible. 
  • Public disclosure of enforcement actions is being used as a deterrent.

Increased Audits: 

  • CRS audits are intensifying globally, with jurisdictions like Luxembourg, Canada, and the British Virgin Islands conducting in-depth reviews of compliance. 
  • Audits focus on data quality, governance frameworks, due diligence, and reporting accuracy.

IRS Enforcement Campaigns: 

  • The IRS Large Business and International (LB&I) Division has intensified compliance campaigns targeting Form 1042/1042-S reporting, NRA treaty exemptions, and financial service entities engaged in U.S. trade or business.

Peer Reviews: 

  • The OECD’s Global Forum is conducting peer reviews to assess jurisdictions’ compliance with CRS standards. 
  • Poor ratings can lead to reputational damage, financing restrictions, and increased scrutiny.

Voluntary Disclosure Program: 

  • Withholding agents can disclose delinquent returns and avoid penalties if corrective measures are implemented. This program is limited to six years of delinquent returns and does not include formal closing agreements. 

IRS Regulatory Updates

Draft Form W-9 Instruction Updates:

    • Sole proprietors must use SSNs, not EINs (Disregarded entities must report the owner’s TIN) 
    • New exempt recipient category for certain digital asset brokers 
    • New certification checkbox for digital asset broker exemption

These updates signal increased enforcement focus on TIN accuracy and entity  classification. 

E-Filing Transition to IRS IRIS Platform: 

  • The FIRE system will be permanently retired on December 31, 2026. All electronic filings for tax year 2026 (due in 2027) must be submitted via IRIS. 
  • The IRS transition from FIRE to IRIS is a data modernization project, not just a filing change.

Form 1099 Reporting Threshold Changes: 

  • The reporting threshold for Forms 1099-NEC and 1099-MISC has increased from $600 to $2,000 for payments made in 2026, with inflation adjustments starting in 2027. 
  • This change aligns backup withholding rules with the new threshold. 
IRS Releases Updated Draft Instructions for Form W-9 (Rev. January 2026)
Draft Instructions for Form W-9 | Article

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FATCA/CRS Regulatory Updates

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2024 IRS Form Updates Key Changes You Need to Know

British Virgin Islands: 

  • CRS 2.0 applies from January 2026, with expanded due diligence and data collection requirements. 
  • CARF implementation is expected by 2028, with new reporting obligations for digital products and controlling-person roles.

Canada: 

  • CRS 2.0 implementation deferred to January 2027, with first reporting in 2028. 
  • Updates to due diligence requirements include stricter validation of self-certifications and controlling-person information.

Cayman Islands: 

  • New CRS regulations require earlier registration and reporting deadlines for financial institutions. 
  • Enhanced due diligence and record-keeping requirements have been introduced, with penalties for non-compliance capped at $50,000.

Luxembourg: 

  • Updated FAQs clarify self-certification validation, reporting requirements, and record retention. 
  • Financial institutions must maintain detailed registers of actions and compliance checks.

Switzerland-U.S. FATCA Agreement: 

  • A reciprocal automatic exchange of information agreement is expected to take effect on January 1, 2028. 
  • Swiss financial institutions must resubmit their registration within 20 days of the agreement’s entry into force to maintain their GIINs.

TIN Relief: 

  • Temporary relief for Model 1 FFIs extended through 2027, allowing alternative reporting measures for missing U.S. TINs. 
  • FFIs must report foreign taxpayer identification numbers (FTINs) and city/country of residence for specified U.S. persons missing TINs.

As the regulatory landscape continues to shift across industry, and staying ahead of change isn’t just helpful—it’s essential. The insights shared at the Investment Management Tax Reporting and Withholding Conference made one thing clear: tax operations teams need tools and information they can trust reduce to risk and absorb regulatory change more easily. 

The Comply Connect brings you a monthly roundup of the biggest regulatory updates, industry shifts, and practical takeaways—so you’re never caught off guard by what’s coming down the line. And when it comes to turning insight into action, Comply Exchange is built to help teams automate with confidence. 

If you’d like to discuss how these developments impact your organization, we’re always happy to connect. 

2026 Investment Management Tax Reporting & Withholding Conference Key Takeaways (Featured Image)
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Written By

Lauren Pierce

Lauren has 15 years of experience in U.S. Information Reporting and Withholding. Prior to joining Comply, she worked in the Global Information Reporting and Withholding Practice at Deloitte, advising a variety of clients, including major financial institutions and multinational corporations, on Chapter 3, Chapter 61, FATCA, and CRS regulations. She also focused on documentation review and remediation, procedure enhancements, and reporting, including FATCA, CRS, 1099, 1042, and FBAR. Lauren is a graduate of Sacred Heart University in Fairfield, CT (BS in Accounting).

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