Foreign Financial Institution Temporary U.S. Taxpayer Identification Number Relief

Part III - Administrative, Procedural, and Miscellaneous

Notice 2023-11

SECTION 1. PURPOSE

This notice provides temporary relief procedures for certain foreign financial

institutions (FFIs) required to report U.S. taxpayer identification numbers (U.S. TINs) for

certain preexisting accounts as defined in an applicable Model 1 intergovernmental

agreement (IGA). If an FFI in an eligible Model 1 IGA jurisdiction (as further defined in

section 3.05 of this notice) complies with the procedures described in this notice, then

the U.S. Competent Authority will not determine there is significant non-compliance

(described in Article 5(2) or 5(3) of the relevant IGA) with the reporting Model 1 FFI’s

obligations under the IGA solely as a result of its failure to report U.S. TINs associated

with its preexisting accounts.

The relief described in this notice is intended to enable the Internal Revenue

Service (IRS) to collect and analyze additional information for accounts without U.S.

TINs. To obtain the relief provided by this notice, the reporting Model 1 FFI must, as

part of its requirements under this notice, use certain codes provided by the IRS that

identify features of these accounts that may explain why the reporting Model 1 FFI does

not report a U.S. TIN. The Department of the Treasury (Treasury Department) and the

IRS intend to use this data to enhance IRS compliance procedures and to inform

potential future options for reporting Model 1 FFIs who continue to be unable to obtain

and report the U.S. TIN for certain accounts. If permanent relief is granted in the future,

it is anticipated that the scope of the accounts for which an FFI may obtain such relief

will be narrower than the scope of accounts for which relief is given under this notice.

SECTION 2. BACKGROUND

On March 18, 2010, the Hiring Incentives to Restore Employment Act of 2010,

Pub. L. No. 111-147, 124 Stat. 71 (2010) (HIRE Act), added chapter 4 of Subtitle A

(chapter 4), comprising sections 1471 through 1474, to the Internal Revenue Code

(Code). Chapter 4 (commonly known as the Foreign Account Tax Compliance Act, or

FATCA) addresses non-compliance by U.S. taxpayers holding foreign financial

accounts or assets. FATCA requires certain FFIs to report to the IRS information about

financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers

hold certain ownership interests. FATCA generally requires withholding agents to

withhold 30 percent tax on certain U.S. source payments to FFIs that do not agree to

report information to the IRS about their U.S. accounts. FATCA was enacted to ensure

compliance with U.S. taxpayers’ tax obligations.

In order to facilitate the exchange of information on financial accounts held by

U.S. taxpayers, the Treasury Department collaborated with foreign governments to

develop two alternative model IGAs (Model 1 IGAs and Model 2 IGAs) that are intended

to provide an effective and efficient means for complying with FATCA while reducing the

burden FATCA compliance imposes on financial institutions. The Model 1 IGA provides

that a reporting Model 1 FFI will report certain information on U.S. reportable accounts

maintained by the FFI to the Model 1 IGA jurisdiction tax authority, which will

automatically exchange such information with the U.S. Competent Authority.

Each Model 1 IGA provides that a reporting Model 1 FFI shall be treated as

complying with, and not subject to withholding under, section 1471 of the Code if the

Model 1 IGA jurisdiction complies with its obligations under the IGA with respect to the

FFI and the FFI complies with its reporting and registration obligations in accordance

with the IGA. Under Model 1 IGAs, a reporting Model 1 FFI that does not satisfy those

obligations shall not be subject to withholding under section 1471 of the Code unless

the FFI is treated by the IRS as a nonparticipating financial institution under the

procedures described below. Each Model 1 IGA also provides that the United States

shall not require a reporting Model 1 FFI to withhold tax under section 1471 or 1472 of

the Code with respect to an account held by a recalcitrant account holder or to close

such account if the U.S. Competent Authority receives certain information specified in

the Model 1 IGA with respect to such account.

The information required to be reported by a reporting Model 1 FFI includes the

U.S. TIN of each specified U.S. person that is an account holder and, in the case of a

non-U.S. entity with one or more specified U.S. persons who are controlling persons,

the U.S. TIN of each controlling person for its U.S. reportable accounts (required U.S.

TINs). The U.S. TIN of a U.S. citizen is the individual’s U.S. Social Security number

(SSN). Notwithstanding this reporting requirement, before 2017, a reporting Model 1

FFI was not required to report a required U.S. TIN for an account maintained as of the

determination date specified in the applicable Model 1 IGA (preexisting account) that is

a U.S. reportable account if the U.S. TIN was not in the reporting Model 1 FFI's records.

In such cases, a reporting Model 1 FFI was required to report the date of birth of the

relevant person, but only if the date of birth was in the reporting Model 1 FFI's records.

Model 1 IGA jurisdictions committed to establish rules for 2017 and subsequent years

requiring reporting Model 1 FFIs to obtain and report the required U.S. TINs for such

accounts.

Each Model 1 IGA requires that the Model 1 IGA jurisdiction obtain and

exchange the information specified in the Model 1 IGA (including each required U.S.

TIN) with respect to each U.S. reportable account. The suspension of withholding

under sections 1471 and 1472 of the Code pursuant to each Model 1 IGA is conditioned

on adequate reporting and exchange of information. If a reporting Model 1 FFI fails to

report required U.S. TINs, the U.S. Competent Authority may notify the Model 1 IGA

jurisdiction competent authority that there is significant non-compliance with respect to

the reporting Model 1 FFI, in accordance with the Model 1 IGA. During the 18 months

following the notification, the U.S. Competent Authority would work with the Model 1

IGA jurisdiction competent authority to address the non-compliance. If the reporting

Model 1 FFI remains non-compliant for 18 months after the notification, under the

relevant Model 1 IGA, the United States may treat the reporting Model 1 FFI as a

nonparticipating financial institution that is subject to withholding under section 1471 of

the Code.

On September 25, 2017, the Treasury Department and the IRS released Notice

2017-46, 2017-41 I.R.B. 275, which provided relief and guidance for reporting Model 1

FFIs that were unable to obtain and report required U.S. TINs for preexisting accounts.

If a reporting Model 1 FFI complied with the conditions in Notice 2017-46, the U.S.

Competent Authority would not determine that there had been significant non-

compliance with the obligations under an applicable Model 1 IGA solely because of a

reporting Model 1 FFI’s failure to obtain and report each required U.S. TIN for a

preexisting account. In order to qualify for the relief in Notice 2017-46, a reporting

Model 1 FFI was required to: (1) obtain and report the date of birth of each account

holder, and of each controlling person, whose U.S. TIN is not reported; (2) request

annually from each account holder any missing required U.S. TIN; and (3) before

reporting information that relates to calendar year 2017 to the Model 1 IGA jurisdiction,

search electronically searchable data maintained by the reporting Model 1 FFI for any

missing required U.S. TINs. The relief in Notice 2017-46 was limited to reporting for

calendar years 2017, 2018, and 2019, and was intended to provide reporting Model 1

FFIs additional time to implement practices and procedures to obtain and report

required U.S. TINs.

Pursuant to the Model 1 IGAs and Notice 2017-46, reporting Model 1 FFIs had

up to six years to obtain required U.S. TINs and could report information on such

accounts without the U.S. TINs without being treated as in significant non-compliance

with the obligations under an applicable Model 1 IGA. Consequently, U.S. citizens who

reside abroad also had up to six years to obtain (if necessary) and provide an SSN or

renounce their U.S. citizenship before facing consequences from their financial

institutions (if any).

In addition, in 2019, the IRS issued relief procedures for certain persons who

have relinquished, or intend to relinquish, their U.S. citizenship in order to ease the tax

obligations that are part of the U.S. expatriation process. The procedures are available

to U.S. citizens with a net worth of less than $2 million and an aggregate tax liability of

$25,000 or less for the taxable year of expatriation and the five prior years. An

applicant for the relief is not required to obtain an SSN for purposes of using the

procedures and may use his or her best efforts in computing his or her total tax for each

year. The relief procedures are available at https://www.irs.gov/individuals/international-

taxpayers/relief-procedures-for-certain-former-citizens.

Notwithstanding the years of relief the Treasury Department and the IRS have

provided to reporting Model 1 FFIs that have not been reporting required U.S. TINs for

preexisting accounts, the IRS continues to receive reporting from Model 1 IGA

jurisdictions that does not include required U.S. TINs for all preexisting accounts that

are U.S. reportable accounts. Obtaining U.S. TINs from U.S. taxpayers connected to

accounts at FFIs, including accounts located in the taxpayer’s country of residence, is

crucial to ensuring that the IRS has the necessary information to determine whether

U.S. taxpayers are complying with their U.S. tax obligations. To better understand the

issues that FFIs were facing in obtaining required U.S. TINs, the IRS developed a series

of codes (TIN Codes) a reporting Model 1 FFI could use to populate the TIN field for

2020 data. The IRS shared the TIN Codes with each Model 1 IGA jurisdiction in early

2021 and then issued the TIN Codes in an FAQ on IRS.gov on May 13, 2021, available

at https://www.irs.gov/businesses/corporations/frequently-asked-questions-faqs-fatca-

compliance-legal. These TIN Codes indicated that a required U.S. TIN had not been

obtained in specified scenarios. The use of TIN Codes was not mandatory and did not

affect the obligations of a reporting Model 1 FFI to collect and report required U.S. TINs.

The Treasury Department and the IRS have received communications from

Model 1 IGA jurisdictions, FFIs, and U.S. citizens expressing concern that FFIs are

closing or may close bank accounts of U.S. citizens who have failed to provide a

required U.S. TIN, including accounts of U.S. citizens resident outside the United

States. FFIs have indicated that these closures are based on concerns about being

treated as in significant non-compliance with their obligations under a Model 1 IGA.

Model 1 IGA jurisdictions have also indicated that FFIs are unable to close certain

accounts, which may increase the risk that the FFI is found to be in significant non-

compliance with its obligations.

The Treasury Department and the IRS also have received communications

expressing concern that some FFIs are refusing to provide accounts to U.S. citizens

resident in the FFI’s jurisdiction, or otherwise providing access to accounts on less

favorable terms than apply to other account holders, even if the U.S. citizen provides a

U.S. TIN.

The Treasury Department and the IRS have determined that merely providing

additional time for reporting Model 1 FFIs to implement practices and procedures to

obtain and report required U.S. TINs for preexisting accounts will not address the

concerns described above. Section 3 of this notice sets forth interim measures

intended to address the concerns of FFIs and Model 1 IGA jurisdictions while providing

the IRS additional information to enhance compliance procedures and addressing other

concerns described above.

SECTION 3. U.S. TIN REPORTING BY REPORTING MODEL 1 FFIS

.01 In general

In order for the Treasury Department and the IRS to determine an appropriate

permanent solution to the concerns expressed above, the IRS needs to collect

additional information from reporting Model 1 FFIs explaining why they have not

provided all required U.S. TINs. Accordingly, as an interim measure, sections 3.02,

3.03 and 3.04 of this notice provide that reporting Model 1 FFIs that follow specified

procedures will not be treated as in significant non-compliance with their obligations

under an applicable Model 1 IGA solely because of the failure to report a required U.S.

TIN with respect to a preexisting account. Section 3.05 of this notice limits this relief to

reporting Model 1 FFIs that are in a Model 1 IGA jurisdiction that makes good faith

efforts to increase the likelihood that U.S. citizens residing in that jurisdiction will report

their U.S. TINs to the FFIs and that takes other steps specified in section 3.05.

.02 Relief for reporting on certain preexisting accounts that are U.S. reportable accounts

For reporting on calendar years 2022 (due by September 30, 2023), 2023 (due

by September 30, 2024), and 2024 (due by September 30, 2025), the U.S. Competent

Authority will not determine that there is significant non-compliance with the obligations

of a reporting Model 1 FFI under an applicable Model 1 IGA with respect to reporting

required U.S. TINs for preexisting accounts solely because of a failure to obtain and

report each required U.S. TIN for such accounts, provided that the reporting Model 1

FFI complies with the conditions set forth in sections 3.03 and 3.04 of this notice and is

in a Model 1 IGA jurisdiction that satisfies the requirements of section 3.05 of this

notice.

This relief is limited to reporting on preexisting accounts. It does not apply to

U.S. reportable accounts opened after the determination date specified in the applicable

Model 1 IGA (new accounts), including new accounts held by account holders of

preexisting accounts.

Nothing in this notice prevents the U.S. Competent Authority from finding

significant non-compliance for a failure to satisfy any obligation under the applicable

Model 1 IGA other than a failure to obtain and report each required U.S. TIN for

preexisting accounts. Furthermore, nothing in this notice affects a reporting Model 1

FFI's obligations under chapter 3 or chapter 61 with respect to a reportable amount or

reportable payment.

.03 Requirements for reporting Model 1 FFIs

A reporting Model 1 FFI is eligible for the relief described in section 3.02 of this

notice only if, for each U.S. reportable account (including new accounts) with a missing

required U.S. TIN, the reporting Model 1 FFI: (1) obtains and reports the date of birth of

each account holder that is an individual and controlling person whose U.S. TIN is not

reported; (2) starting in calendar year 2023, annually requests from each account holder

any missing required U.S. TIN, as described in further detail in section 3.04 below; (3)

starting in calendar year 2023, annually searches electronically searchable data

maintained by the reporting Model 1 FFI for any missing required U.S. TINs; and (4)

reports an accurate TIN Code for each account that is missing a required U.S. TIN. For

reporting on calendar year 2022, the fourth condition may be satisfied by a reporting

Model 1 FFI by using either the TIN Codes issued by the IRS in May 2021 or updated

TIN Codes issued by the IRS in early 2023. For reporting on calendar years 2023 and

2024, the fourth condition must be satisfied by a reporting Model 1 FFI by using the

most recent TIN Codes issued by the IRS.

.04 Annual request for missing required U.S. TINs

To satisfy the requirement to make an annual request from each account holder

for missing required U.S. TINs, reporting Model 1 FFIs must use the method of

communication that is, in the FFI’s reasonable judgment, most likely to reach the

account holder. In addition, the communication must include either of the following:

• the web address of the State Department’s Joint FATCA FAQs

(https://travel.state.gov/content/travel/en/international-travel/while-

abroad/Joint-Foreign-Account-Tax-Compliance-FATCA-FAQ.html),

• (i) a copy of the FAQs described in the preceding bullet and (ii) either

o a copy of the relief procedures provided by the IRS for certain

former citizens, or

o the web address for such procedures

(https://www.irs.gov/individuals/international-taxpayers/relief-

procedures-for-certain-former-citizens).

The Joint FATCA FAQs provide information on how to obtain an SSN, how to renounce U.S. citizenship,

and relevant U.S. tax consequences (including a link to the IRS’s relief procedures for certain former U.S.

citizens).

An FFI must retain records of the policies and procedures adopted to satisfy this

requirement and documentation that those policies and procedures were followed to

establish its compliance with the requirements of this section 3.04 until the end of

calendar year 2028.

.05 Eligible Model 1 IGA jurisdictions

For a reporting Model 1 FFI to be eligible for the relief described in this section

with respect to reporting for a particular calendar year or other appropriate reporting

period, the applicable Model 1 IGA jurisdiction must make good faith efforts, by the date

that is nine months after the end of the calendar year to which the information relates, to

do the following:

(1) Encourage U.S. citizens resident in the jurisdiction to provide U.S. TINs to

FFIs when requested;

(2) Take measures to enforce compliance by reporting Model 1 FFIs identified by

the U.S. Competent Authority to the Model 1 IGA jurisdiction as potentially non-

compliant;

(3) Encourage FFIs located in a Model 1 IGA jurisdiction to not discriminate

against U.S. citizens that do provide a U.S. TIN; and

(4) If notified by the U.S. Competent Authority, take steps to conclude Competent

Authority Arrangements with the U.S. Competent Authority, to implement an IGA,

amend an Annex II to an IGA, or exchange country-by-country information.

In order to provide a transition period for the satisfaction of these conditions,

section 3.05 will be deemed to have been satisfied for reporting on calendar year 2022.

SECTION 4. DRAFTING INFORMATION

The principal author of this notice is Sarah Stein of the Office of Associate Chief

Counsel (International). For further information regarding this notice, contact Sarah

Stein at (202) 317-4917 (not a toll-free call).