United States: Updated FAQs, periodic certifications extended

United States: Periodic certifications extended

The IRS updated a set of “frequently asked questions” (FAQs) as guidance for qualified intermediary (QI), withholding foreign partnership (WP), and withholding foreign trust (WT) to provide an additional extension for periodic certifications.

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The IRS updated FAQ 10 (reproduced below) under the “Certifications and Periodic Reviews” section. Read the FAQs (updated 8 April 2021).

Text of FAQ 10

Q10. What are the due dates for submission of QI/WP/WT Certifications covering a 3 full calendar year certification period ending December 31, 2020?

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 and section 8.03 of the WP Agreement and WT Agreement, the certification due date for a QI/WP/WT that selected 2018 or 2019 for its periodic review and that has a certification period ending December 31, 2020 is July 1, 2021.

According to those same sections noted above, the certification due date for a QI/WP/WT that selected 2020 for its periodic review is December 31, 2021.

However, the periodic certification due dates have been extended as follows:

  1. The due date for periodic certifications of QI/WP/WTs that select 2018 or 2019 as their periodic review year or request a waiver of the periodic review requirement is extended until December 1, 2021.
  2. The due date for periodic certifications of QI/WP/WTs that selected 2020 as their periodic review year is extended until March 1, 2022.

These extensions are automatic and require no further action by the QI/WP/WT.

QI/WP/WTs should also be aware that an entity applying for a waiver of the periodic review when making its periodic certification, must select 2018 for its periodic review year and complete Parts I, II, and III of the certifications.  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 2018 as its periodic review year. If the entity encounters difficulty selecting a year other than 2018, 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: 04-08-2021

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