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FATCA-Noncompliant Foreign Institutions Will Soon Hear From IRS

June 6, 2019, 9:52 PM

The IRS has started sending notices of default to foreign financial institutions that haven’t yet certified with U.S. reporting and compliance rules.

Notices of default—or event of default (EOD) notices—are the first step to a foreign institution losing its compliant status under the Foreign Account Tax Compliance Act, which would bring major reputational damage, or canceling qualified intermediary agreements, which would result in compliance issues for foreign investors.

“As of today, the IRS has issued EODs for financial institutions that should have submitted their FATCA certifications but didn’t,” said Trevon Singh, a senior tax analyst at the ...