New Internal Revenue Service and Automatic Exchange of Information Guidance in April 2020

Who is Impacted


Anyone making payments of U.S. reportable income will be interested in a listing of notable new guidance posted by the Internal Revenue Service (IRS) in April 2020.


Anyone with Automatic Exchange of Information (AEoI) filing requirements under the Foreign Account Tax Compliance Act (FATCA) or the Common Reporting Standard (CRS) will be interested in staying connected with updates from tax authorities in various jurisdictions, including the Internal Revenue Service (IRS), the Treasury Department, and Organization for Economic Cooperation and Development (OECD) to find new and changing information as a result of the global COVID-19 crisis.


What Changed


In April 2020, the IRS published several important updates. Be sure to check the IRS site for other forms that your organization uses.


Also, over the last few weeks, a number of countries have published guidance regarding reporting in the year 2020. Due to the ongoing COVID-19 crisis, many have delayed the reporting dates for this year among other changes.


This article will provide a quick listing of new IRS published materials and certain notable AEoI reporting updates.


IRS Publications and other Guidance


2018 Publication 575, Pension and Annuity Income. Published on April 16, 2020, and includes a coversheet regarding changes to the original 2018 Publication 575, due to the Taxpayer Certainty and Disaster Tax Relief Act of 2019.


2018 Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs). Published on April 16, 2020 and includes a coversheet regarding changes to the original 2018 Publication 590-B, due to the Taxpayer Certainty and Disaster Tax Relief Act of 2019.


2019 Publication 550, Investment Income and Expenses.


2019 Publication 1187, Specifications for Electronic Filing of Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding.


2020, Free File Fillable Forms User’s Guide.


2020 Publication 5084, IRS Congressional Update.


Publication 5370, Key Insights Report (Rev. February 2020).


Winter 2020 Publication 1693, SSA/IRS Reporter.


IRS Forms and Instructions


Form 941, Employer’s QUARTERLY Federal Tax Return (Rev. January 2020). Note, there is a coverpage with information related to the Employee Retention Credit for employers that are subject to closure due to the COVID-19 crisis.

Instructions to Form 941, Instructions for Form 941, Employer’s Quarterly Federal Tax Return (Rev. January 2020). Note, there is a coverpage with information related to the Employee Retention Credit for employers that are subject to closure due to the COVID-19 crisis.


Form 941-SS, Employer’s QUARTERLY Federal Tax Return, American Samoa, Guam, the Commonwealth of Northern Mariana Islands, and the U.S. Virgin Islands (Rev. January 2020). Note, there is a coverpage with information related to the Employee Retention Credit for employers that are subject to closure due to the COVID-19 crisis.


Instructions to Form 941-SS, Instructions for Form 941, Employer’s Quarterly Federal Tax Return, American Samoa, Guam, the Commonwealth of Northern Mariana Islands, and the U.S. Virgin Islands (Rev. January 2020). Note, there is a coverpage with information related to the Employee Retention Credit for employers that are subject to closure due to the COVID-19 crisis.


2019 Form 1065, U.S. Return of Partnership Income. Note, there is a cover page regarding Form 1065 Bipartisan Budget Act of 2015 (BBA) Partnerships Filing Amended Returns for Coronavirus Aid, Relief, and Economic Security (CARES) Act Relief.


2020 Form 5498, RA Contribution Information (Info Copy Only). Also posted as a draft on April 16, 2020.


IRS Notable Draft Forms


DRAFT 2020 Form 941, Employer’s QUARTERLY Federal Tax Return (Rev. April 2020), as of April 29, 2020.


DRAFT 2020 Instructions for Form 941, Employer's Quarterly Federal Tax Return (Rev. April 2020), as of April 29, 2020.


AEoI Updates


U.S. IRS


In response to the COVID-19 crisis, the IRS added new FAQs providing the following:


  • Reporting FAQ 5 provides an extension of time for Model 1 IGA jurisdictions to provide their FATCA data for tax year 2019 to the U.S. Competent Authority to 31 December 2020. Added April 14, 2020.

  • Reporting FAQ 4 provides an extension of time for a Reporting Model 2 FFI or Participating FFI to file the FATCA Report (Form 8966) to the IRS from 31 March 2020 to 15 July 2020. There is no need to file a Form 8809-I, Application for Extension of Time to File FATCA Form 8966. This extension applies to other entities that have a FATCA Report filing obligation as well (e.g. U.S. Withholding Agents or Direct Reporting NFFEs). Updated April 20, 2020.


Registration Update FAQ 18 explains that an FFI with a registration status of "Agreement Terminated" has this status because the IRS identified an issue with its registration. These FFIs should review their registration message board for additional information. Further, entities that with a terminated registration and Global Intermediary Identification Number (GIIN) removed from the FFI List due to noncompliance with the FATCA certification requirement must not register again for a new GIIN. The IRS reviews the GIIN list for terminated FFIs and will not approve their new registration status. Entities that need to reinstate their GIIN must contact the IRS's Foreign Payments Practice (FPP) by mail or email to apply for reinstatement and follow the outlined Procedures for FATCA Certification Event of Default Notices. This new manual described the FPP process for addressing noncompliance with the FATCA certification requirements including the Event of Default Notice timeline, the request for reconsideration process, and the remediation plan guidance. Added 15 April 2020.


British Virgin Islands


On 20 April 2020, the British Virgin Islands International Tax Authority (ITA) announced that the FATCA enrollment deadline has been extended to 31 July 2020, and the FATCA filing deadline has been extended 31 August 2020.


Although there is no indication of a general extension of filing and enrollment deadlines for CRS, the deadline for CRS enrollment has been extended to 30 June 2020, and the CRS filing deadline has been extended to 31 July 2020.


The ITA maintains that adjustments can be made with respect to filing and enrolment deadlines. This means that if a Financial Institution finds itself in a position where it is unable to meet the extended deadlines, then it must indicate the name of Jurisdiction, the reason(s) affecting filings, and why an extension is being sought so that the ITA can be address each issue on a case by case basis. Financial Institution’s Primary Users must send an email to info@bviita.vg seeking further extensions.


See BVI ITA 20 April 2020 Release


Canada

The Canada Revenue Authority extended the dates for filing 2019 information returns under Part XVIII and Part XIX of the Income Tax Act. This includes FATCA and CRS filings. The deadline has been extended to 1 September 2020.


See Income tax filing and payment dates: CRA and COVID-19


Cayman Islands


The Department for International Tax Cooperation (DITC) of the Cayman Islands announced updates for both FATCA and CRS reporting in response to the COVID-19 pandemic. The DITC:

  • Extended the FATCA reporting deadline for the 2019 reporting period to 16 November 2020.

  • Released a new CRS compliance form with the 2020 submission deadline of 31 December 2020. Note that the CRS reporting deadline for the 2019 reporting period is unchanged and remains as 18 September 2020.


For additional information, please refer to the Cayman Island Industry Advisory: Cayman Islands Industry Advisory.


Also see, the DITC News and Updates Publication, as of 22 April 2020.


Guernsey


The States of Guernsey Revenue Service have not issued any changes to the reporting of 2019 financial account data. All Reporting Guernsey Financial Institutions must submit their 2019 FATCA and CRS reports to the Revenue Service on or before 30 June 2020; however, if a Guernsey Reporting Financial Institution requires an extension to the current deadline for reporting FATCA only, it may submit a request to the Revenue Service at, AEOI_compliance@gov.gg. The request must explain the reason for the delay and a proposed submission date for consideration by the Revenue Service.


See, States of Guernsey Revenue Service, Bulletin 2020/1, Notices issued for the US IGA and CRS Reporting Deadlines.


Please also refer to our last article published on 17 April 2020 for additional AEoI updates this month


For all other updates and additional information please visit the following links:


The IRS:

https://www.irs.gov/coronavirus


The Department of Treasury:

https://home.treasury.gov/coronavirus


The U.S. Government:

https://www.usa.gov/coronavirus (In English)

https://www.usa.gov/espanol/coronavirus (In Spanish)


Update on OECD Tax Work:

https://search.oecd.org/tax/beps/coronavirus-covid-19-update-on-oecd-tax-work.htm


Center for Disease Control (CDC):

https://www.coronavirus.gov/


How to Implement

Visit these websites often to stay informed of changes, both tax and health related!

Share your experiences with us in the comments or e-mail us!

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