Form to Certify FATCA Status May Spur Errors, Practitioners Say

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IRS issues a new draft version of a form that intermediaries and other entities will need to submit to withholding agents under the Foreign Account Tax Compliance Act, but practitioners tell BNA the form is complicated and will be difficult for many taxpayers to complete. IRS unveils the draft Form W-8IMY as the next step in implementing the complex law. Under FATCA, foreign financial institutions could face a 30 percent withholding tax if they do not tell U.S. tax authorities about their U.S.-owned accounts. “It is going to be very complicated to prepare,” Candace Ewell, a director in the Washington National Tax practice of PricewaterhouseCoopers LLP, tells BNA. Noting that the form has gone from two pages to eight pages, Ewell predicts that in many cases, “this form is not going to be prepared properly.”