ExpressIRSForms Presents New FATCA Compliant 1099s

With the passing of the Foreign Account Tax Compliance Act (or FATCA) in 2014, certain IRS Forms have changed in order to help counter tax evasion in the U.S. Now, certain Foreign financial institutions (FFIs) are required to report U.S. accounts it maintains that are held by specified U.S. persons on Form(s) Form 1099-MISC, 1099-INT, and/or 1099-DIV. ExpressIRSForms offers all of these Forms, and we've updated our program to include these new reporting requirements. Create a free account today to make sure you stay in good standing with the IRS this upcoming tax season!

The New FATCA Filing Requirement Check Box

If you're used to filing 1099 forms, you might notice something a little different about them this year. In order to comply with the FATCA, Form 1099-DIV now has a check box for identifying FFIs filing this form to satisfy chapter 4 reporting requirements. Mark this box with an "X" if it's applicable to you.

FATCA Reporting Bond Premiums on Tax-Exempt Bonds

In addition to the checkbox for identifying FFIs, Box 13 was added to Form 1099-INT to report bond premium on tax-exempt bonds. All boxes thereafter have been renumbered.

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Frequently Asked Questions

FATCA stands for the Foreign Account Tax Compliance Act. It is a new piece of legislation to help counter tax evasion in the US. The provisions under the FATCA became law in 2010.

The FATCA was introduced by the US Department of Treasury and the IRS to encourage better tax compliance by preventing US persons from using banks and other financial organizations to avoid US taxation on their income and assets.

A significant number of countries worldwide are expected to sign inter-governmental agreements (IGAs) relating to FATCA compliance with the United States government. These IGAs will result in FATCA legislation becoming a part of these countries' local laws.

The FATCA affects both personal and business customers who are treated as a US person for US tax purposes. Those affected by the FATCA include, but are not limited to:

  • US companies with significant cross-border transactions and/or investments
  • Foreign financial service firms, including retail banks, financial advisory firms, and securities brokerages
  • Foreign investment funds (e.g. PE funds, VC funds, hedge funds, etc.)
  • Foreign companies holding passive investments in the US
  • Foreign enterprises conducting business in the US
  • Foreign pension funds and other special foreign exempt entities with US investments

No. If your account holds any of the following seven criteria, you may need to report information or documentation to determine if you are a U.S person under the FATCA.

  • U.S citizenship or U.S residence
  • U.S place of birth
  • U.S address, including U.S PO boxes
  • U.S telephone number
  • Repeating payment instructions to pay amounts to a US address or an account maintained in the U.S
  • Current power of attorney or signatory authority granted to a person with a U.S address
  • In care of or hold mailing address which is the sole address of the account holder
The impact of the FATCA should not be underestimated, as it will have a broad impact on a number of persons. On an annual basis, banks and other financial organizations will be required to report information on financial accounts held directly or indirectly by US persons.
For most individuals, the FATCA has a minimal impact, and there will be no action required. Check the IRS's website if you're unsure of whether or not you're affected by FATCA.
The FFI List is issued by the IRS; it includes all financial institutions and branches that have submitted for and been assigned a Global Intermediary Identification Number (GIIN) at the time the list was compiled.
If the FFI has a withholding obligation and will be filing Forms 1042 and 1042-S with the IRS, it will be required to have an EIN. You can access the IRS's publication 515 ("Withholding of Tax on Nonresident Aliens and Foreign Entities") for more information about US withholding requirements. An FFI is also required to have an EIN when it is a QI, WP, or WT, or if the FFI is a participating FFI that elects to report its US accounts on 1099 forms.
If you're an FFI that is eligible to make an election described in Regulations section 1.1471-4(d)(5)(i)(A) or (B), or are a US payer reporting as described in Regulations section 1.1471-4(d)(2)(iii)(A), you must do so by filing each appropriate 1099 forms with the IRS. Use these forms to report the payments required to be reported by a US payer with respect to the account.
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