Qi Agreement Revenue Procedure 2017-15: A Guide for Tax Professionals
The Internal Revenue Service (IRS) has released Revenue Procedure 2017-15, which governs Qualified Intermediary (QI) agreements for tax years beginning on or after January 1, 2017. QI agreements are designed to simplify tax reporting for non-U.S. financial institutions that act as intermediaries in securities transactions involving U.S. investments.
As a tax professional, it is important to understand the details of this revenue procedure and how it may impact your clients. Here, we will break down the key points of the Qi Agreement Revenue Procedure 2017-15.
What is a QI Agreement?
A QI agreement is an agreement between a non-U.S. financial institution and the IRS. Under this agreement, the financial institution agrees to perform certain due diligence procedures, such as collecting and verifying tax identification numbers and determining the tax status of its account holders. The QI also agrees to report certain information about U.S. investors to the IRS.
The purpose of a QI agreement is to simplify tax reporting for non-U.S. financial institutions by allowing them to report information on behalf of their U.S. customers. This reduces the burden on U.S. investors who would otherwise need to report their own tax information to the IRS.
What Has Changed in Revenue Procedure 2017-15?
Revenue Procedure 2017-15 updates the requirements for QI agreements for tax years beginning on or after January 1, 2017. Some of the key changes include:
— An updated QI Agreement that reflects changes made by the Foreign Account Tax Compliance Act (FATCA).
— New compliance requirements related to withholding and reporting for certain derivatives and equity-linked instruments.
— New procedures for requesting relief from certain penalties related to QI agreements.
— Clarification of the treatment of certain entities under QI agreements.
It is important to review the full text of Revenue Procedure 2017-15 for a complete understanding of its requirements and implications.
What Should Tax Professionals Do?
Tax professionals who work with non-U.S. financial institutions should review the requirements of Revenue Procedure 2017-15 and ensure that their clients are in compliance. This may involve reviewing existing QI agreements and updating them to reflect the new requirements, as well as advising clients on the due diligence procedures required under the QI agreement.
In addition, tax professionals should stay up-to-date on any future changes to the QI agreement requirements, as well as any other regulatory changes that may impact their clients.
Final Thoughts
The Qi Agreement Revenue Procedure 2017-15 is an important update to the requirements for QI agreements. Tax professionals who work with non-U.S. financial institutions should review the changes and ensure that their clients are in compliance. By staying up-to-date on regulatory changes, tax professionals can help their clients avoid penalties and maintain compliance with IRS requirements.