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ARTICLE · 17 MARCH 2021

FFI Agreements Specifically Permit The IRS To Request Account Information

Winston Taylor
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In an IRS Technical Assistance Memorandum issued by the Office of Associate Chief Counsel (International) in December 2020, the IRS determined that it may request from specified foreign financial institutions information ...

United StatesFinance and Banking
Richard A. Nessler
Richard A. Nessler

In an IRS Technical Assistance Memorandum issued by the Office of Associate Chief Counsel (International) in December 2020, the IRS determined that it may request from specified foreign financial institutions ("FFIs") information regarding the accounts held by them by certain US individuals.1 The IRS may request this information for each year under the terms of § 6.02 of the FFI agreement. This request is permitted under the FFI agreement regardless of whether the United States has a tax-exchange agreement in effect with the country of residence of any of the participating foreign financial institutions ("PFFIs").

Analysis

Under § 1471(a), an FFI that does not meet the requirements of § 1471(b) is subject to withholding on withholdable payments made to it at the rate of 30%. The requirements of § 1471(b) are met with respect to any FFI that has an agreement in effect between it and the IRS under which the FFI agrees to (among other things) obtain information on

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