Daily Tax Update - December 26, 2013: IRS Releases Foreign Financial Institution Agreement Guidance

IRS RELEASES FOREIGN FINANCIAL INSTITUTION AGREEMENT GUIDANCE:  Revenue Procedure 2014-10  provides guidance to foreign financial institutions (FFIs) entering into an FFI agreement with the Internal Revenue Service (IRS) under section 1471(b) of the Internal Revenue Code (Code) and § 1.1471-4 of the Income Tax Regulations1 (the FFI agreement) to be treated as participating FFIs.

This revenue procedure also provides guidance to FFIs and branches of FFIs treated as reporting financial institutions under an applicable Model 2 intergovernmental agreement (IGA) (reporting Model 2 FFIs) on complying with the terms of the FFI agreement, as modified by the Model 2 IGA. A reporting Model 2 FFI should interpret the FFI agreement by substituting the term “reporting Model 2 FFI” for “participating FFI” throughout the FFI agreement, except in cases where the FFI agreement explicitly refers to a reporting Model 2 FFI.