Daily Tax Update - February 20, 2014: IRS Issues Final Rules Under FATCA

IRS ISSUES FINAL RULES UNDER FATCA:  Today, Treasury and the IRS released two packages of additional regulations implementing the Foreign Account Tax Compliance Act (“FATCA”).  The first package (T.D. 9657) contains over 50 amendments and clarifications to the final FATCA regulations issued in January 2013, including changes relating to direct reporting to the IRS by certain entities, the treatment of disregarded entities as branches of foreign financial institutions, the definition of an expanded affiliated group, and transitional rules for certain types of payments (including the extension of a transitional offshore payment rule to insurance brokers).  The second package (T.D. 9658) coordinates the FATCA rules with pre-FATCA withholding and reporting rules under Internal Revenue Code chapters 3 and 61 and section 3406.

The regs can be accessed via: TD 9657 (2).pdf & TD 9658.pdf

A Treasury Department fact sheet can be accessed via: http://www.treasury.gov/resource-center/tax-policy/treaties/Documents/022014%20-%20FATCA%20Fact%20Sheet.pdf

Revenue Ruling 2014-8 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274. The rates are published monthly for purposes of sections 42, 382, 412, 1288, 1274, 7520, 7872, and various other sections of the Internal Revenue Code.