Non-US persons are facing difficulties meeting ID.me login authentication to transition to the new IR Application for TCC portal by 1 August 2023 and IRS e-Services registration for new electronic Form 1042 reporting. No problem should exist for the new login to the QI portal.
Electronic filing of Forms 1042-S
As a reminder, in order to keep filing Forms 1042-S electronically using the FIRE system, QI banks are required to register with the new IR Application for Transmitter Control Code (“TCC”) portal by 1 August 2023. Without registration, existing TCC will be cancelled after 1 August 2023.
A timely registration is key for filing Forms 1042-S for the year 2023 (to be filed in 2024) and onwards, but also for filing amended or new Forms 1042-S for the year 2022 after 1 August 2023. Without a registration on the new IR Application for TCC, QI banks will need to enlist an authorized third party (for example KPMG) for filing.
Registration on the IR Application for TCC portal currently requires a valid ID.me account including authentication of the identity of the registered individual user. This process was designed for US persons and requires a US TIN and other information typically only available to US persons. Most QI banks are therefore currently not able to register with the IR Application for TCC.
The IRS has publicly stated that it is aware of the issue and that it is working on a solution for non-US persons and that QI banks will be given sufficient time to transition. It is anticipated that the IRS will provide updates to the above topics during the upcoming KAPLAN conference on International Tax Withholding and Information Reporting in June 2023.
Electronic filing of Form 1042
The IRS announced that, starting in 2024 (i.e. for tax years 2023 and onwards), it plans to provide the ability to electronically file Form 1042 through their Modernized e- File (MeF), using an XML schema.
The electronic file transmission, either through an Application-to-Application (A2A) or an Internet Filing Application (IFA) (see IRS Publication 4164 for further details), as well as access to the schemas and business rules for 1042 MeF on the IRS’ Secure Object Repository (SOR), require a valid e-Services registration with the IRS. This requires a valid ID.me account including authentication of the identity of the individual user.
QI banks outside the US currently face similar registration issues as with the registration for TCC described above. Although the IRS has not publicly commented on this matter to date, we anticipate it will also provide a solution for non-US persons similar to the one they are working on for the registration for TCC.
Login into QAAMS
Beginning 17 May 2023, accessing the IRS Qualified Intermediary, Withholding Foreign Partnership, Withholding Foreign Trust Application and Account Management System (QAAMS) will require a registration on ID.me or Login.gov. Solely for the purpose of accessing QAAMS, a simple two-way-authentication on ID.me or Login.gov is sufficient, and no additional verification steps are required. Access to the QAAMS will thus remain possible for non-US persons (without having to obtain a US TIN).
We recommend that QI banks update their registration on QAAMS in a timely manner, to ensure their access to the system remains available without interruption.