United States: Sponsoring entities with no registered sponsored entities in FATCA registration system
IRS will be requesting that the sponsoring entities cancel their FATCA agreement if they do not meet the requirements for being a sponsoring entity.
Sponsoring entities with no registered sponsored entities
The IRS today issued a release announcing that “sponsoring entities” that have not registered any sponsored foreign financial institutions (FFIs) or sponsored direct reporting non-financial foreign entities (NFFEs) in the FATCA registration system—and therefore are not performing the obligations of a sponsoring entity—will be contacted by a message posted on their FATCA registration system message board.
The IRS transmittal message notes that the IRS will be requesting that the sponsoring entities cancel their FATCA agreement if they do not meet the requirements for being a sponsoring entity of sponsored FFIs and/or sponsored direct reporting NFFEs (including the requirement to have registered sponsored FFIs and/or sponsored direct reporting NFFEs).
If the entity has sponsored FFIs or sponsored direct reporting NFFEs, they can proceed with registering the sponsored entities in the FATCA registration system.
If no action is taken within 60 days of notification, the entity will be removed from the published FFI List and may be subject to 30% withholding.
A sponsoring entity is an entity that will perform the due diligence, withholding, and reporting obligations of one or more sponsored FFIs, or the due diligence and reporting obligations of one or more sponsored direct reporting NFFEs. After a sponsoring entity’s registration is approved, it must register its sponsored FFIs and/or sponsored direct reporting NFFEs, as applicable.
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