FATCA Registrations: Sponsoring Entities with no Registered Sponsored Entities
The IRS has identified Sponsoring Entities that do not appear to have Sponsored Entities registered in the FATCA Registration System.
A Sponsored Entity is a Sponsored FFI or a Sponsored Direct Reporting NFFE.
A Sponsoring Entity is an entity that will perform the due diligence, withholding, and reporting obligations of one or more Sponsored FFIs, or the due diligence and reporting obligations of one or more Sponsored Direct Reporting NFFEs. After a Sponsoring Entity’s registration is approved, it must register its Sponsored FFIs and/or Sponsored Direct Reporting NFFEs, as applicable.
The IRS has identified Sponsoring Entities that have not registered any Sponsored FFIs or Sponsored Direct Reporting NFFEs and, therefore, are not performing the obligations of a Sponsoring Entity.
The IRS will be contacting impacted Sponsoring Entities by posting a message on their FATCA registration system message board.
The IRS will be requesting that the Sponsoring Entities cancel their FATCA agreement if they do not meet the requirements for being a Sponsoring Entity of Sponsored FFIs and/or Sponsored Direct Reporting NFFEs, including the requirement to have registered Sponsored FFIs and/or Sponsored Direct Reporting NFFEs.
If the entity has Sponsored FFIs or Sponsored Direct Reporting NFFEs, they can proceed with registering the Sponsored Entities in the FATCA registration system.
If no action is taken within 60 days of notification, the entity will be removed from the published FFI List and may be subject to 30% withholding.
