IEIM402045 - Reportable Information: Tax Identification Number FATCA
Tax Identification Number FATCA
The taxpayer identification number (TIN) is the unique identifier assigned to the Account Holder by the tax administration in the Account Holder’s jurisdiction of tax residence. It is a unique combination of letters and/or numbers used to identify an individual or entity for the purposes of administering the tax laws of that jurisdiction.
The TIN to be reported for FATCA purposes is the US Federal Taxpayer Identification Number.
The TIN is a mandatory item for reporting for FATCA in respect of pre-existing accounts for the 2017 reporting year onwards. However in September 2017 the U.S. Internal Revenue Service published Notice 2017-46 relaxing this requirement https://www.irs.gov/pub/irs-drop/n-17-46.pdf
The Notice confirms that foreign financial institutions (FFIs) in Model 1 IGA jurisdictions (including the UK) will not be in significant non-compliance with an applicable IGA during 2017, 2018, and 2019 solely as a result of a failure to report U.S. TINs for preexisting accounts, provided the FFI reports the account holder’s date of birth, makes annual requests for the TIN, and searches its electronic records for missing U.S. TINs before reporting information on 2017.
In view of the IRS Notice and the fact that UK Financial Institutions may find it difficult to obtain TINs for all U.S. account holders, HMRC will not regard a failure by a UK Financial Institution to provide U.S. TINs in respect of pre-existing accounts during 2017, 2018 and 2019 as a failure to comply with the UK regulations provided that the requirements of the IRS Notice are met.
In October 2019 the IRS published FAQ3 on Reporting, giving further guidance on reporting TINS for 2020 and future reportable periods: https://www.irs.gov/businesses/corporations/frequently-asked-questions-faqs-fatca-compliance-legal#reporting
The IRS FAQ confirms that Financial Institutions are not required automatically to close accounts that do not contain a TIN.
The IRS FAQ also confirms that if a Financial Institution is unable to obtain a TIN, this will not automatically lead the IRS to conclude that there is significant non-compliance. Instead, the IRS will consult with HMRC so they can take account of valid reasons why TINs could not be obtained and the efforts made to collect them. To help with this HMRC will approach Financial Institutions on a case by case basis to gather those reasons and to evidence that the Financial Institution has adequate procedures in place to obtain TINs.
In 2021, in order to better understand the reasons why a Foreign Financial Institution (FFI) in a U.S. Model 1 IGA jurisdiction may not have been able to obtain a U.S. TIN, the IRS developed a series of codes that may be used by an FFI to populate the TIN field in circumstances where the TIN is not available, as an alternative to using nine zeros. The use of these codes is optional and does not mean that an FFI will not be at risk of being found significantly non-compliant due to a failure to report each required U.S. TIN. The IRS will take into account the facts and circumstances leading to the absence of the U.S. TIN, such as the reasons why the TIN could not be obtained, whether the FFI has adequate procedures in place to obtain TINs, and the efforts made by the FFI to obtain TINs.
The codes issued in 2021 are as follows:
222222222 – Preexisting individual account with only U.S. indicia being a U.S. place of birth.
333333333 – New individual account that (1) has indicia of a U.S. place of birth, and (2) either:
(a) has a change in circumstances causing the self-certification originally obtained at account opening to be incorrect or
unreliable, and a new self-certification has not been obtained, or
(b) was below the threshold for documenting and reporting the account at the time of account opening and subsequently
exceeded the threshold, and a self-certification has not been obtained.
444444444 – Preexisting individual and entity account that (1) has U.S, indicia other than a U.S. place of birth, and (2) either:
(a) has a change in circumstances, causing the self-certification or other documentation originally obtained to be incorrect or
unreliable, and a new self-certification or other documentation has not been obtained, or
(b) was below the threshold for documenting and reporting the account at the time of account opening and subsequently
exceeded the threshold, and a self-certification or other documentation has not been obtained.
555555555 – New individual and entity account that has a U.S. indicia other than a U.S. place of birth, and (2) either:
(a) has a change in circumstances causing the self-certification or other documentation originally obtained to be incorrect or
unreliable, and a new self-certification or other documentation has not been obtained, or
(b) was below the threshold for documenting and reporting the account at the time of account opening and subsequently
exceeded the threshold, and a self-certification or other documentation has not been obtained.
666666666 – Pre-existing entity account with account balance exceeding $1,000,000 held by a passive NFFE with respect to which no self-certifications have been obtained, and no U.S. indicia has been identified in relation to its controlling persons.
777777777 - Pre-existing account where there is no TIN available and the account has been dormant or inactive, but remains above the reporting threshold, also known as ‘‘dormant account’’. The U.S. defines ‘‘dormant account’’ in U.S. Treasury Regulations §1.1471-4(d)(6)(ii).
The above codes may only be used by FFIs in jurisdictions with a U.S. Model 1 IGA.
On 30 December 2022 the IRS issued Notice 2023-11 which provides reporting relief to Model 1 FFIs who have been unable to obtain U.S. TINs for their pre-existing accounts that are U.S. reportable accounts if they follow the procedures in the Notice. The notice can be found at https://www.irs.gov/pub/irs-drop/n-23-11.pdf. The IRS has also published an update to FAQ6 on reporting. The FAQ includes updates to the TIN codes issued in 2021.
Model 1 IGA FFIs must use the newly updated codes for reporting in respect of calendar years 2023 and 2024 to be eligible for the relief. The updated codes are as follows:
222222222 Pre-existing individual account with only U.S. indicia being a U.S. place of birth, other than an account reported under code 000222111. This code takes precedence if any other code (other than 000222111) could also be applicable.
000222111 Pre-existing depository individual account with only U.S. indicia being a U.S. place of birth. Additionally, FFI must determine that the account holder is a resident of the jurisdiction where the account is maintained for AML and tax purposes. For reference, “depository account” has the meaning defined in the applicable Model 1 Intergovernmental Agreement (Model 1 IGA). This code takes precedence if any other code could also be applicable.
333333333 New individual account that:
(1) has indicia of a U.S. place of birth, and
(2) either:
(a) has a change in circumstances causing the self-certification originally obtained at account opening to be incorrect or unreliable, and a new self-certification has not been obtained, or
(b) was below the threshold for documenting and reporting the account at the time of account opening and subsequently exceeded the threshold, and a self-certification has not been obtained.
444444444 Pre-existing individual or entity account that:
(1) has U.S. indicia other than a U.S. place of birth, and
(2) either:
(a) has a change in circumstances that either results in one or more U.S. indicia being associated with the account or causes a self-certification or other documentation originally obtained to be incorrect or unreliable, and a valid self-certification or other documentation has not been obtained subsequent to the change in circumstances, or
(b) was below the threshold for documenting and reporting the account on the determination date provided in the applicable Model 1 IGA and subsequently exceeded the threshold, and a self-certification or other documentation has not been obtained.
555555555 New individual or entity account that:
(1) has a U.S. indicia other than a U.S. place of birth, and
(2) either:
(a) has a change in circumstances causing the self-certification or other documentation originally obtained to be incorrect or unreliable, and a new self-certification or other documentation has not been obtained, or
(b) was below the threshold for documenting and reporting the account at the time of account opening and subsequently exceeded the threshold, and a self-certification or other documentation has not been obtained.
666666666 Preexisting entity account held by a passive NFFE with one or more controlling persons with respect to which self-certifications have not been obtained, and no U.S. indicia have been identified in relation to any controlling persons.
777777777 Dormant Accounts – For pre-existing accounts where there is no TIN available and the account has been dormant or inactive, but remains above the reporting threshold, also known as a “dormant account.” A “dormant account” is one that meets the definition set out in U.S. Treasury Regulations §1.1471-4(d)(6)(ii) and had had no financial activity for three years, except for the posting of interest. If an account could be classified into multiple TIN codes, the other code takes precedence.
999999999 Any account for which the FFI cannot obtain a TIN and none of the other TIN codes would be applicable. The use of this code indicates that an FFI has completed its review of accounts without U.S. TINs and has in good faith applied TIN codes to records when applicable.
Reporting to HMRC in respect of calendar year 2022, due by 31 May 2023, is considered to be a transitional year. FFIs are encouraged to use either the TIN codes issued in 2021 or the updated TIN codes issued in 2023 to assist the IRS in understanding the reasons for missing U.S. TINs.
For reporting in respect of the calendar years up to and including 2022, it is still possible to report an account without a TIN to HMRC by entering nine zeros in the TIN field.
In November 2024, the IRS issued Notice 2024-78, which extends the reporting relief given under Notice 2023-11 for a further three calendar years, 2025, 2026 and 2027, subject to certain conditions. The Notice can be found at: https://www.irs.gov/pub/irs-drop/n-24-78.pdf
The conditions are that for each reportable account missing a required US TIN, the FFI must: obtain and report the date of birth for each individual account holder or controlling person; make annual requests for the missing US TIN; annually search electronically searchable data for the missing US TIN; report an accurate TIN code; where electronically searchable information contains a foreign TIN (or functional equivalent), report that foreign TIN, and report the city and country of residence.
For guidance on reporting TINs for CRS purposes see IEIM402040.