Channel Islands: Updated FATCA guidance, invalid or missing U.S. TINs (Jersey)

Channel Islands: Updated FATCA guidance

The government of Jersey cancelled and replaced an advisory note (March 2021) with new guidance concerning information from the U.S. tax agency (IRS) regarding the reporting of individual account reports without a valid U.S. taxpayer identification number (TIN).

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Within the revised advisory note, there is no longer a requirement to send Revenue Jersey a list of the default TINs when financial institutions do not have a valid U.S. TIN for an account holder. The updated note advises that:

  • Financial institutions must be aware that the Intergovernmental Agreement (IGA) with the United States obliges foreign financial institutions (FFIs) to obtain a valid U.S. TIN for U.S. individual account holders.
  • Transitional rules allowed FFIs to report using a default TIN for reporting periods up to the end of 2019 when their efforts to obtain a TIN in relation to an account had been unsuccessful.
  • Reports relating to the year 2020 and later are expected to include a valid U.S. TIN. If not, the IRS will stop suppressing error notifications when it receives reports containing default TINs such as AAAAAAAAA (9 As).
  • As a result, some Jersey FFIs could receive a significant number of error notifications regarding invalid TINs after the IRS has received and processed the 2020 reports in the autumn of 2021.
  • Revenue Jersey normally expects FFIs to correct any errors within 30 days of notification. If an FFI does not hold a U.S. TIN for an account holder at that point, and cannot therefore submit a corrected report, it will need to provide Revenue Jersey with an explanation for this.
  • The IRS will evaluate the data received and determine through a consideration of the facts and circumstances if there is significant non-compliance on the part of the reporting FFI, taking into account factors such as whether the FFI has adequate procedures in place to obtain TINs and the efforts made by the FFI to obtain them.
  • FFIs are encouraged to provide information that a TIN has been collected for an account holder and included in the 2020 report in every instance (Revenue Jersey is aware of cases when TINs have been correctly obtained but inadvertently not included in reports).
  • FFIs must also provide that their procedures and records are sufficient to evidence, if challenged, the steps they have taken to obtain TINs as required under the FATCA regulations, noting that these may be different from similar requirements under the common reporting standard (CRS).
  • There are additional codes that can be used when a TIN is not available. FFIs have the option of using these additional default codes in their 2020 reports (that are due by 30 June 2021).
  • The previous default TIN of 9As will continue to be accepted by the Jersey AEOI portal.

Read a March 2021 report [PDF 81 KB] prepared by the KPMG member firm in the Channel Islands

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