BVI ITA updates industry on mandatory TIN information for Financial Institutions, relevant to US IRS filings
23 May 2023
On 12 May 2023, the International Tax Authority (ITA) issued a reminder to all Financial Institutions (FIs) regarding the inclusion of mandatory Tax Identification Number (TIN) information in filings, for the 2020 reporting year onwards. Additionally, the ITA provided an update on the acceptable sequential codes issued by the United States Internal Revenue Service (IRS) for reporting purposes from calendar year 2022 onwards.
The key points are:
- Mandatory TIN information and reporting: FIs are reminded that TIN information in filings is compulsory from the 2020 reporting year and onwards. The purpose is to ensure accurate and transparent reporting. Failure to include TIN information can result in non-compliance issues.
- Transition year for reporting: For the calendar year 2022, a transition year, FIs are granted flexibility. They can use either the TIN codes issued in May 2021 or the updated codes provided on the IRS website in the Reporting section's FAQs page. This temporary allowance aims to facilitate a smooth transition to the updated codes.
- Important TIN codes: Several new and amended TIN codes have been introduced. The key codes and their descriptions can be accessed at Q6. of the Reporting section on the FAQs page.
- Reporting errors and corrections: While using these TIN codes, it is important to note that the IRS system may generate an error notification if an entry is deemed invalid. In such cases, FIs should make the necessary corrections within 120 days of receiving the error. Failure to correct errors within this timeframe will not automatically result in significant non-compliance. However, FIs must document their attempts to obtain any missing TINs if contacted by the IRS.
For further details on the filing format and a full discussion of the significant non-compliance process, please refer to Q3 and Q6 of the Reporting section on the FAQs page or visit the IRS website here.
The ITA’s press release can be found here.