The Internal Revenue Service is giving foreign banks and financial institutions more time to file their forms about U.S. taxpayers with overseas bank accounts and other holdings in compliance with the Foreign Account Tax Compliance Act, or FATCA, because of the coronavirus pandemic.
FATCA was included as part of the HIRE Act of 2010 and requires foreign financial institutions, or FFIs, to report information about U.S. taxpayers with bank accounts, or else face stiff penalties. The coronavirus outbreak is being felt across the world, and the IRS and Treasury Department have been granting various forms of tax relief in response to the crisis, including pushing back the tax filing and payment deadline for U.S. taxpayers to July 15.
In response to the COVID-19 virus, the IRS said Wednesday it will provide an extension of time for a Reporting Model 2 FFI or a Participating FFI to file the FATCA Report (Form 8966) to the IRS. Under the intergovernmental agreements the Treasury has signed with tax authorities in other countries, there are two models for reporting the information on U.S. taxpayers, one in which the banks report it to their own government, which in turn shares it with the IRS, and the other in which the banks report the information directly to the IRS, and another under . Most countries favor the first model.
The IRS said the filing deadline for the FATCA Report (Form 8966) will be extended from March 31, 2020 to July 15, 2020. Form 8809-I, Application for Extension of Time to File FATCA Form 8966, will not be required for this extension. For more information on the extension, see FAQ Q4 in the “Reporting” category on the FATCA – FAQs General page.
Separately, the IRS said it has also updated and published new FAQs (frequently asked questions) relating to CCGs (consolidated compliance groups) on the QI/WP/WT (qualified intermediaries/withholding foreign partnerships and withholding foreign trusts) FAQs page. For more information, see the updated FAQ (Q5) and new FAQ (Q18) under the heading Certifications and Periodic Reviews.