Daily Tax Update - June 25, 2014: IRS Releases Instructions to FATCA and Foreign Account Reporting on Forms W-8BEN-E, 8966, and 8938

Internal Revenue Service Releases Instructions to FATCA and Foreign Account Reporting on Forms W-8BEN-E, 8966, and 8938:  The IRS today released final instructions to Forms W-8BEN-E and 8966.  Form W-8BEN-E is used by entities that are beneficial owners of offshore financial accounts to document non-resident status to avoid 30% withholding tax.  These long-awaited instructions, appearing just before the July 1, 2014 FATCA compliance deadline, include definitional clarifications that will be important for foreign entities considering their compliance obligations.

Form 8966 is used by foreign financial institutions (FFIs) reporting information about  US accounts.  It is also used for reporting by qualified intermediaries and by a number of other entities.

The IRS also released draft instructions for Form 8938.  Form 8938 is used by US individual taxpayers to report information about certain foreign financial accounts and offshore assets.

Tax Extenders Offered as Amendment to Highway Bill:  Chairman Ron Wyden (D-OR) of the Senate Finance Committee offered an amendment to the Preserving American’s Transit and Highways Act, legislation to pay for the Highway Trust Fund, that includes the tax cuts contained in the EXPIRE Act of 2014.  The EXPIRE Act includes extensions of more than 50 tax benefits, some of which expired at the end of 2013 and others that would expire at the end of 2014.  Although the EXPIRE Act had been approved by the Finance Committee in April, it has stalled in the Senate.

The amendment can be accessed here.

Miscellaneous Guidance Released:
In TD 9670, the IRS and Treasury Department issued final regulations relating to disregarded entities and the indoor tanning services excise tax, as well as disregarded entities and certain exceptions from taxes under the Federal Insurance Contributions Act and the Federal Unemployment Tax Act.