SECTION 4. QUALIFIED

INTERMEDIARY WITHHOLDING AGREEMENT

The text of the QI agreement is set forth below. Upon receipt and review of an application to become a qualified intermediary, the IRS will complete the QI agreement (e.g., insertion of the QI’s name, etc.). A prospective QI should ensure that it has provided to the IRS all of the information that is required to complete the agreement. It may be necessary for the IRS to contact the potential qualified intermediary, or its authorized repre

2 Generally, the IRS will not permit a QI to establish the identity of an account holder without obtaining documentation directly from the account holder.

January 24, 2000 388 2000–4 I.R.B.

sentative, to obtain additional information. Once the IRS has obtained all the information required to complete the agreement, the IRS will send two unsigned copies of the QI withholding agreement to the prospective QI for signature. Both copies of the agreement should be signed by a person with the authority to sign the agreement and returned to the IRS at the address specified in section 3.01. The IRS will sign the QI agreement and return one of the originals to the qualified intermediary. The IRS will consider changes to the text of the QI agreement as set forth below only in rare and unusual circumstances. The IRS will not accept, however, any changes that it determines would provide a potential QI with a competitive advantage over other similarly situated QIs.

COUNTRY-BY-COUNTRY REPORTING

The IRS and Treasury have decided that a QI that has executed a QI withholding agreement prior to January 1, 2001, will not be required to provide a country-bycountry break down of reporting pools on Form 1042-S. See section 8.03 of the QI withholding agreement for a definition of reporting pool. It was decided that requiring such information at this time would impede implementation of the QI system since it is recognized that financial institutions will be required to commit substantial information technology resources to address technology issues that have been delayed by the year 2000 problem. The IRS and Treasury, however, are continuing to study whether to require country code information for reporting pools in the future. Therefore, the IRS and Treasury may require a potential QI that enters into an agreement after December 31, 2000, or a QI that enters into an agreement after the expiration of an agreement’s initial term, to provide a country-by-country break down of reporting pools.