January 6, 2011: FATCA: IRS Issues Proposed Rules on Reporting Interest Paid to Foreign Individuals
On January 6, 2011 the U.S. Treasury Department issued proposed regulations that would require the reporting of U.S. bank deposit interest paid to all foreign individuals.
Under the section 6049 Regulations that are currently in effect, U.S. banks are only required to report bank deposit interest that is paid to a U.S. person or to a foreign individual who is a resident of Canada. Under the new regulation, banks would be required to report annual bank deposit interest paid to ALL Foreign individuals.
This change paves the way for the U.S. to share information with foreign governments about non-U.S. citizens' U.S. deposits. It will also provide the U.S. Government with income information that may be useful in enforcing the implementation of the new FATCA provisions.
This new requirement will apply to payments made after December 31 of the year in which the regulation becomes final and may require financial institutions to reprogram their reporting systems.
The attached PDF contains the language of the proposed Regulations as printed in the Federal Register. Additionally, please download the attached article to learn more about additional contacts.
For further information click here.