SECTION 2. BACKGROUND

Chapter 4 of subtitle A of the Internal Revenue Code (Code) (commonly known as the Foreign Account Tax Compliance Act, or 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 was enacted to ensure U.S. taxpayers comply with their tax obligations.

The Department of the Treasury (Treasury Department) collaborated with foreign governments to develop two alternative model intergovernmental agreements (the Model 1 IGA and the Model 2 IGA) to facilitate the implementation of FATCA and avoid legal impediments under local law that would otherwise limit an FFI’s ability to comply with FATCA. The Model 1 IGA provides that a reporting Model 1 FFI reports certain information on its U.S. reportable accounts to the Model 1 IGA jurisdiction tax authority, which automatically exchanges the information with the U.S. Competent Authority.

A reporting Model 1 FFI that complies with its reporting and registration obligations in accordance with the IGA is treated as complying with section 1471 of the Code. One requirement is that the reporting Model 1 FFI reports 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). Under Model 1 IGAs, a reporting Model 1 FFI that satisfies its reporting and registration obligations is not subject to withholding under section 1471 of the Code unless the FFI is treated

by the IRS as a nonparticipating financial institution.

Transitional relief was implemented to provide time for reporting Model 1 FFIs to obtain and report the required U.S. TINs for preexisting accounts, including the publication of a series of codes (TIN Codes) a reporting Model 1 FFI could use to populate the TIN field for certain missing required U.S. TINs. ¹ The TIN Codes provide the IRS with information intended to allow it to better understand the issues that FFIs were facing in obtaining required U.S. TINs.

To extend additional transitional relief, on January 17, 2023, the IRS published Notice 2023-11, 2023-3 I.R.B. 404, which provided temporary relief for the 2022, 2023, and 2024 calendar years for reporting Model 1 FFIs in eligible Model 1 IGA jurisdictions that were unable to obtain and report required U.S. TINs for preexisting accounts. Notice 2023-11 required these reporting Model 1 FFIs to provide an accurate TIN Code for each account that was missing a required U.S. TIN, in addition to other obligations specified in the notice.

For reporting Model 1 FFIs that complied with the requirements of Notice 2023-11, the U.S. Competent Authority would not determine there was significant non-compliance with the obligations under the 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. This relief was limited to reporting on preexisting accounts. It did 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.

The IRS continues to evaluate the reported TIN Codes and other information provided by Model 1 FFIs to understand account characteristics that may make it difficult for a reporting Model 1 FFI to obtain and report the required U.S. TINs. However, the IRS believes addi

1 Reporting FAQ 6 (as of the publication date of this notice, https://www.irs.gov/businesses/corporations/frequently-asked-questions-faqs-fatca-compliance-legal#reporting).

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tional information from TIN Code reporting in more calendar years is necessary to develop future potential compliance options. The IRS has also concluded that certain additional data points are necessary to ensure sufficient individual identifiers are reported where required U.S. TINs are missing. Accordingly, section 3 of this notice provides an additional three calendar years of the temporary relief from the U.S. TIN reporting requirements for preexisting accounts provided the reporting Model 1 FFI in an eligible Model 1 IGA jurisdiction complies with the requirements of this notice.