1545-2246-SS_2025-Clean

SUPPORTING STATEMENT

Internal Revenue Service

Foreign Account Tax Compliance Act Reporting

by

Foreign Financial Institutions and Non-Financial Foreign Entities

OMB Control Number 1545-2246

1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

The Foreign Account Tax Compliance Act (FATCA) amended the Internal Revenue Code (IRC) by adding Sections 1471 through 1474. FATCA requires that foreign financial Institutions and certain other non-financial foreign entities report on the foreign assets held by their U.S. account holders or be subject to withholding on withholdable payments.

FATCA generally requires a withholding agent that does not receive proper documentation needed for compliance with FATCA's reporting requirements to withhold 30% of a withholdable payment to a foreign financial institution (FFI) or non-financial foreign entity (NFFE), unless an exception applies. FFIs generally include banks, investment companies or similar financial institutions, while NFFEs are defined as any entity that is not a financial institution. 

To implement the FATCA provisions, IRS has published guidance including Treasury Decision (TD) 9610, TD 9657, IRS Notice 2013-43, IRS Notice 2014-33, IRS Notice 2023-11, IRS Notice 2024-78, Revenue Procedure (Rev Proc) 2014-38, Rev Proc 2014-47, Rev Proc 2017-21, and Announcement 2014-17.

As part of the reporting requirements under 26 CFR 1.1471-1, FFIs and NFFEs need to obtain either a Global Intermediary Identification Number (GIIN) or FATCA Identification number (FIN). The FFIs obtain this by registering with the IRS through the online FATCA Registration system (formerly Form 8957), as detailed in Publication 5118. The NFFEs obtain a FIN by emailing IRS with the specific information as detailed on the IRS’s website, FINEnrollment process | Internal Revenue Service.

As part of the registration process, the Responsible Officer (RO) must provide a FATCA certification which consists of questions that of certain entities must answer and submit to the IRS to confirm the entities’ compliance with FATCA requirements.  There are two types of certifications: Certification of Preexisting Accounts, or COPA, which relates to an entity’s preexisting accounts at the time of their initial registration, and Periodic Certification, which relates to the entity’s compliance with various ongoing FATCA requirements.

26 CFR 1.1471-4 includes that a FFI or NFFE keep records of US accounts and report certain account information to the IRS. Form 8966 – FATCA Report is used by FFI and NFFE to report investments made by, on behalf of, U.S. citizens and residents. These FATCA reports are mainly submitted to IRS through the online system, International Data Exchange Service (IDES). Publication 5190 provides instructions on how to use IDES to transmit FATCA data. IRS Notice 2023-11 and IRS Notice 2024-78 include the reporting of information about any account missing a U.S. Taxpayer Identification Number (TIN).

For any paper submissions of Form 8966, FFI or NFFE must request a waiver using Form 8508-I, Request for Waiver From Filing Information Returns Electronically. Additionally, FFI and NFFEs must include Form 8966-C, Cover Sheet for Form 8966 Paper Submissions, which provides information about the submitter, the type of submission, and number of forms being submitted.

FFI and NFFE may use Form 8809-I, Application for Extension of Time to File FATCA Form 8966, to request an extension of time to file.

2. USE OF DATA

The collections are used by IRS to verify compliance with sections 1471 through 1474 of the Internal Revenue Code.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN

Electronic filing is currently available.

4. EFFORTS TO IDENTIFY DUPLICATION

The information obtained through this collection is unique and is not already available for use or adaptation from another source.

5. METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER SMALL ENTITIES

The IRS proactively works with both internal and external stakeholders to minimize the burden on small businesses, while maintaining tax compliance. The Agency also seeks input regarding the burden estimates from the public via notices and tax product instructions. Entities can file electronically, which further reduces any burden to small businesses.

6. CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL PROGRAMS OR POLICY ACTIVITIES

A less frequent collection will not enable the IRS to meet its mission by verifying the foreign tax credits are being computed properly, which would hinder the IRS from meeting its mission.

7. SPECIAL CIRCUMSTANCES REQUIRING DATA COLLECTION TO BE INCONSISTENT WITH GUIDELINES IN 5 CFR 1320.5(d)(2)

There are no special circumstances requiring data collection to be inconsistent with Guidelines in 5 CFR 1320.5(d)(2).

8. CONSULTATION WITH INDIVIDUALS OUTSIDE OF THE AGENCY ON AVAILABILITY OF DATA, FREQUENCY OF COLLECTION, CLARITY OF INSTRUCTIONS AND FORMS, AND DATA ELEMENTS

In response to the Federal Register notice dated November 27, 2024 (89 FR 93905), we received no comments during the comment period for these revenue procedures.

9. EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO RESPONDENTS

No payment or gift has been provided to any respondents.

10. ASSURANCE OF CONFIDENTIALITY OF RESPONSES

Generally, tax returns and tax return information are confidential as required by 26 USC 6103.

11. JUSTIFICATION OF SENSITIVE QUESTIONS

A privacy impact assessment (PIA) has been conducted for information collected under this request as part of the “Foreign Account Tax Compliance Act (FATCA, FATCA FI Registration” system and Privacy Act System of Records notices (SORN) have been issued for this system under IRS 42.017 – International Enforcement Program Information Files, IRS 42.021 – Compliance Programs and Projects Files, and IRS 34.037 – Audit Trail and Security Records.  The Internal Revenue Service PIAs can be found at https://www.irs.gov/uac/Privacy-Impact-Assessments-PIA.

Title 26 USC 6109 requires inclusion of identifying numbers in returns, statements, or other documents for securing proper identification of persons required to make such returns, statements, or documents and is the authority for social security numbers (SSNs) in IRS systems.

12. ESTIMATED BURDEN OF INFORMATION COLLECTION

The burden estimate is as follows:

Description	# Respondents	# Responses Per Respondent	# Annual Responses	Hours Per Response	Total Burden
FATCA Registration and FIN request	30,620	1	30,620	8.14	249,247
FATCA Report (Form 8966)	5,429,560	1	5,429,560	.42	2,280,415
Form 8966-C Cover Sheet for Form 8966 Paper Submissions	1,000	1	1,000	.12	120
Form 8809-I Application for Extension of Time to File FATCA Form 8966	50,000	1	50,000	3.36	168,000
Form 8508-I Request for Waiver From Filing Information Returns Electronically	50,000	1	50,000	4.29	214,500
Total	5,561,180		5,561,180		2,912,282

The following regulations impose no additional burden. Please continue to assign OMB number 1545-2246 to these regulations.

• 1.1471-1

• 1.1471-2

• 1.1471-3

• 1.1471-4

• 1.1472-1

• 1.1474-1

13. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS

To ensure more accuracy and consistency across its information collections, IRS is currently in the process of revising the methodology it uses to estimate burden and costs. Once this methodology is complete, IRS will update this information collection to reflect a more precise estimate of burden and costs.

14. ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT

The Federal government cost estimate is based on a model that considers the following three cost factors for each information product: aggregate labor costs for development, including annualized start-up expenses, operating and maintenance expenses, and distribution of the product that collects the information.

The government computes cost using a multi-step process. First, the government creates a weighted factor for the level of effort to create each information collection product based on variables such as; complexity, number of pages, type of product and frequency of revision. Second, the total costs associated with developing the product such as labor cost, and operating expenses associated with the downstream impact such as support functions, are added together to obtain the aggregated total cost. Then, the aggregated total cost and factor are multiplied together to obtain the aggregated cost per product. Lastly, the aggregated cost per product is added to the cost of shipping and printing each product to IRS offices, National Distribution Center, libraries and other outlets. The result is the Government cost estimate per product.

Product	Aggregate Cost per Product (factor applied)		Printing and Distribution		Government Cost Estimate per Product
Form 8966	87,378	+	0	=	87,378
Form 8966 Instructions	14,563	+	0	=	14,563
Form 8966-C	75,728	+	0	=	75,728
Form 8809-I	25,243	+	0	=	25,243
Form 8809-I Instructions	7,282	+	0	=	7,282
Form 8508-I	19,417	+	0	=	19,417
Grand Total	229,611		0		229,611
Table costs are based on 2024 actuals obtained from IRS Chief Financial Office and Media and Publications

15. REASONS FOR CHANGE IN BURDEN

There are no changes to the forms that would affect burden at this time.

16. PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION

There are no plans for tabulation, statistical analysis, and publication.

17. REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS INAPPROPRIATE

The agency believes that displaying the OMB expiration date is inappropriate because it would cause confusion by leading taxpayers to believe that the collection sunsets as of the expiration date. Taxpayers may not be aware that the IRS intends to request renewal of the OMB approval and obtain a new expiration date before the old one expires.

18. EXCEPTIONS TO THE CERTIFICATION STATEMENT

There are no exceptions to the certification statement for this collection.