IRS Publishes FATCA Guidance
Summary: The Hiring Incentives to Restore Employment (“HIRE”) Act, enacted in March 2010, includes a provision known as the Foreign Account Tax Compliance Act (“FATCA”), which is designed to police offshore investments, accounts and trust interests held by certain U.S. persons. Although FATCA does not come into effect until 2013, it has already been the subject of rather intense attention and concern on the part of foreign entities — including banks, hedge funds and others — that must determine how to comply so as to avoid a potential new U.S. withholding tax.
In response thereto, on August 27, 2010, the IRS issued Notice 2010-60 (the “2010 Notice”). On April 8, 2011, the IRS issued Notice 2011-34 (the “2011 Notice”), which provides additional guidance regarding the implementation of FATCA. The attached Client Alert summarizes certain key aspects of the 2010 Notice and the 2011 Notice.