Key Takeaways from the EEI International Tax & Information Reporting Conference

In an era of increasing tax transparency and data collection requirements, staying ahead of tax regulations and requirements is more crucial than ever. The 2024 International Tax & Information Reporting Conference held in New York City last week brought together leading experts and industry professionals to discuss the latest trends, regulatory changes, and strategic insights shaping our tax world. Here are some key takeaways from the event:

Session: Proposed Crypto Reporting Regulations

Erin Fennimore, TaxBit; Tara Ferris, EY; Beatriz Castaneda, Coinbase; Seth Wilks, IRS

  • Draft Form 1099-DA
    • The Form 1099-DA and its instructions are expected to go final this year with a 2025 Revision Date. This would mean we can expect to use the 2025 Form 1099-DA to report for tax year 2025.
    • On the Form 1099-DA, an explanation is requested if there is not a TIN for the recipient. It is not known the exact reason the IRS is requesting this, but this could lead to a customer service impact as recipients are going to get their tax form and see an explanation if their TIN is missing.

Session: Discussion With IRS Chief Counsel International

Chip Collins, UBS; John Sweeney, IRS Chief Counsel; Subin Seth, IRS ACCI; Laurie Hatten-Boyd, KPMG; Jonathan Jackel, EY

  • New Form W-9 (March 2024)
    • It was noted during the discussion that a payor should have 6 months before it is required to use the new form. This is similar to the 6-month sunset period allowable for Forms W-8. This would mean that the new Form W-9 should be used by October 2024.
    • New Line 3b requires a flow through entity to check the box indicating if they have any foreign partners, owners, or beneficiaries. Similar with other substitute form requirements, this line/box can be hidden if not applicable.

  • Form 15397, Application for Extension of Time to Furnish Recipient Statements
    • Form 15397 allows filers to request a one-time extension for Forms 1042-S and 1099, other than the Form 1099-NEC. The Nov. 2023 revision of this form only granted extensions for the following situations –
      • Transmitter suffered catastrophic event in a federally declared disaster area
      • Fire, casualty, or natural disaster
      • Death, serious illness, or unavoidable absence of person responsible for filing
      • Transmitter was in first year of establishment
      • Transmitter did not receive data on other payee statement (K-1, 1042-S)
    • The Feb. 2024 revision only requires the above conditions be met for the Form W-2 or Form 1099-NEC. With that in mind, these conditions are not currently required for Forms 1042-S and other Forms 1099.

  • Form W-8EXP Certification Period for Withholding Qualified Holder
    • Final regulations for the new entity classification of Withholding Qualified Holder under Section 1445 on the W-8EXP provides that the certification is valid for the year of signature, plus 2 years. This differs from the standard expiration typically seen for most Forms W-8s of signature year plus 3 years.

Session: Hot Topics, Including CRS And CARF

Cyrus Daftary, KPMG; Rob Limerick, PWC; Susan Segar, Deloitte; Jenny Turner, UBS

  • 2025 Greenbook Proposal
    • The current proposal would require payees to provide Forms W-9 for other 1099 payment types effective December 31, 2024. This would include payments required to be reported on the Form 1099-MISC and Form 1099-K. The proposal would be effective for payments made after December 31, 2024.
    • The current proposal would also require earlier electronic filing deadlines for certain information returns to be filed on or before the date returns are required to be furnished to payees and other recipients. This would mean that payors will need to start preparing for reporting even earlier in the season. The proposal would be effective for information returns required to be filed after December 31, 2024.

  • Automatic Exchange of Information Updates
    • Switzerland will be switching from a Model 2 IGA to a Model 1 IGA. We are not sure when exactly this will take effect but when it does, Reporting FFI’s in Switzerland will report directly to Switzerland instead of reporting to the U.S. This also means that Switzerland will be entitled to receive information on accounts held in the U.S. by Swiss citizens.

Session: IRS Enforcement and Electronic Filing Update

Cyrus Daftary, KPMG; Chip Collins, UBS; Yuen Chan, IRS; Dianne Garibotto, IRS; Nicole Cammarota, Office of Chief Counsel; David Oyler, IRS

  • It was noted during this sessions that the IRS has ramped up the number of Form 1042 audits around the country. This is not industry specific; audits are happening across industry, including Accounts Payable groups. The IRS is specifically looking at things like –
    • Foreign TIN requirements
      • The IRS is challenging the “not legally required” checkbox on withholding certificates and whether that is applicable.
      • They are maintaining that taxpayers have “reason to know” which jurisdictions have/issue TINs.
      • Looking at/verifying Foreign TIN format is consistent with the OECD guidance.
    • Treaty Exemptions
      • Looking at whether claims are being made for countries that do not have an existing tax treaty.
      • Confirming that the treaty exemption being claimed actually applies.
    • Information reporting penalties can be incurred for failure to file correct information returns with the IRS by the date required and for failure to furnish correct information returns to the payees by the date required. The latest information return penalties can be found here.

  • Form 1042 e-File Requirements
    • Notice 2024-26 was released in March 2024, announcing that the IRS was delaying the requirement to electronically file Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. For 2024, all withholding agents are exempt from the electronic filing requirement; for 2025, the notice announced that withholding agents that are foreign persons will be exempt from the electronic filing requirement for Forms 1042 required to be filed in calendar year 2025.
    • Withholding agents are not required to file a request for this exemption, rather it has been automatically applied.

A common thread runs through these regulatory updates and discussions across various tax regimes: the demand for personal identification information is not diminishing, nor is it becoming less onerous. As requirements to collect more information upfront increase, let Comply’s innovative and automated electronic form collection and validation application ease the burden.

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There were many exciting topics discussed, and it is clear this is going to be a year filled with impactful regulatory updates. For example, we can likely expect some additional treaty updates this year, including a potential treaty with Taiwan and a new tax treaty with Hungary. We will continue to stay on top of these updates for you. To get these updates faster, make sure to follow us on LinkedIn.

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This document contains general information only and is not a substitute for accounting, tax, or any other professional advice or services. The information provided is considered accurate at the time of publishing and will not be updated with new regulation requirements.