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IRS updates FAQs for QI / WP / WT

IRS updates FAQs for QI / WP / WT

The IRS today announced it has updated a list of “frequently asked questions” (FAQs) as guidance for qualified intermediary / withholding foreign partnership / withholding foreign trust (QI/WP/WT) entities that may have FATCA reporting requirements.

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The updated FAQs are available on the IRS website and appear under the topic, “Certifications and Periodic Reviews.” Text of the updated FAQs is as follows (emphasis in the original):

Q9. When is the deadline for QI/WP/WT entities to select the periodic review year of their certification?

A9. All QI/WP/WT entities must select the periodic review year of their certification period before July 1, 2020. This includes those entities selecting 2019 as their periodic review year.

If a QI/WP/WT entity is applying for a waiver of the periodic review when making its periodic certification, it must select 2017 for its periodic review year, complete Parts I, II, and III of the certification, and submit its waiver application before July 1, 2020. However, the entity will not be required to perform a periodic review if its waiver application is approved.

The IRS will notify the entity when a request for a waiver of the periodic review is approved or denied. If such request is denied with less than 6 months remaining before the certification due date, including any extensions, the entity will be granted a six-month extension from the date of denial of the waiver to complete the periodic review and resubmit the certification. At that time, the entity may select a year other than 2017 as its periodic review year. If the entity encounters difficulty selecting a year other than 2017, the entity should contact the FI Team at lbi.fi.qiwpissues@irs.gov. The resubmitted certification should include a completed Part IV and Part VI (if applicable).

Updated: 02-05-2020


Q10. When are the due dates for submission of QI/WP/WT Certifications covering a 3 full calendar year certification period ending December 31, 2019?

A10. The certification due date depends on which year the QI/WP/WT selected for its periodic review, and whether the QI/WP/WT is applying for a waiver of the periodic review requirement with its periodic certification (waiver application). According to section 10.03 of the QI Agreement (QI Agreement) and section 8.03 of the WP Agreement and WT Agreement, the certification due date for a QI/WP/WT that selected 2017 or 2018 for its periodic review and that has a certification period ending December 31, 2019 is July 1, 2020.

According to those same sections noted above, the certification due date for a QI/WP/WT that selected 2019 for its periodic review is December 31, 2020.

If a QI/WP/WT entity is applying for a waiver of the periodic review when making its periodic certification, it must select 2017 for its periodic review year, complete Parts I, II, and III of the certification and submit its waiver application by July 1, 2020. However, the entity will not be required to perform a periodic review if its waiver application is approved.

The IRS will notify the entity when a request for a waiver of the periodic review is approved or denied. If such request is denied with less than six months remaining before the certification due date, including any extensions, the entity will be granted a six-month extension from the date of denial of the waiver to complete the periodic review and resubmit the certification. At that time, the entity may select a year other than 2017 as its periodic review year. If the entity encounters difficulty selecting a year other than 2017, the entity should contact the FI Team at lbi.fi.qiwpissues@irs.gov.  Following completion of the periodic review, the QI/WP/WT’s resubmitted certification should include a completed Part IV and Part VI (if applicable).

Updated: 02-05-2020


Q18. When is the deadline for QI/WP/WT entities, with a certification date of July 1, 2020, to select the periodic review year of their certification?

A18. All QI/WP/WT entities with a certification due date of July 1, 2019, which includes entities with an effective date later than 1/1/2016 and earlier than 1/2/2017, must select the periodic review year of their certification period by July 1, 2020. This includes those entities selecting 2019 as their periodic review year. This FAQ does not apply to termination certifications.

If a QI/WP/WT entity is applying for a waiver of the periodic review when making its periodic certification, it must select 2017 for its periodic review year, complete Parts I, II, and III of the certification and submit its waiver application by July 1, 2020. However, the entity will not be required to perform a periodic review if its waiver application is approved.

The IRS will notify the entity when a request for a waiver of the periodic review is approved or denied. If such request is denied with less than six months remaining before the certification due date, including any extensions, the entity will be granted a six-month extension from the date of denial of the waiver to complete the periodic review and resubmit the certification. At that time, if the entity wants to select a year other than 2017 as its periodic review year, the entity should contact the FI Team at lbi.fi.qiwpissues@irs.gov. The resubmitted certification should include a completed Part IV and Part VI (if applicable).

QI/WP/WT entities should consult Publication 5262, Qualified Intermediary, Withholding Foreign Partnership, and Withholding Foreign Trust Application & Account Management User Guide (PDF) before beginning their certification on the system to verify that their account login credentials are up to date and for login assistance, if needed.  QI/WP/WT entities should also consult the IRS FAQ homepage for Qualified Intermediaries, Withholding Foreign Partnerships, and Withholding Foreign Trusts under the heading Certifications and Periodic Reviews.

Updated: 02-05-2020

KPMG observation

There is apparently a typo in the IRS transmittal message (February 11, 2020) concerning FAQ 18 that provides the following (emphasis added):

All QI/WP/WT entities with a certification due date of July 1, 2020, which includes entities with an effective date later than 1/1/2016 and earlier than 1/2/2017, must select the periodic review year of their certification period by July 1, 2020. 

The text of FAQ 18, however, provides the following:

All QI/WP/WT entities with a certification due date of July 1, 2019, which includes entities with an effective date later than 1/1/2016 and earlier than 1/2/2017, must select the periodic review year of their certification period by July 1, 2020. This includes those entities selecting 2019 as their periodic review year. This FAQ does not apply to termination certifications.

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