New Form 1099 draft instructions include FATCA update

New Form 1099 draft instructions include FATCA update
The IRS recently released draft instructions for several 1099 forms, which include a change related to the Foreign Account Tax Compliance Act (FATCA). The update was made for Form 1099-MISC, Miscellaneous Income; Form 1099-DIV, Dividends and Distributions; Form 1099-OID, Original Issue Discount; and Form 1099-INT, Interest Income.

The change is the addition of a checkbox for foreign financial institutions (FFIs). It refers to the FFIs chapter 4 filing requirements.

"Beginning in 2014, an FFI with a chapter 4 requirement to report a US account maintained by the FFI that is held by a specified US person may satisfy this requirement by reporting on Form(s)1099 under the election described in Regulations section 1.1471-4(d)(5)(i)(A)," the instructions read.

The instructions went on to say US payors can fulfill their chapter 4 obligations using the check box.

Bibliography: convey.com, irs.gov