The existence of a robust Compliance Program has become a requirement of most U.S. tax regimes. A financial institution’s Compliance Program must include policies, procedures, and processes sufficient to satisfy documentation, reporting, and withholding requirements found in the regulations. GCS’s wholistic solution allows a financial institution to choose our complete compliance program or select only the necessary components.
WRITTEN POLICIES AND PROCEDURES
An FI must have written policies and procedures that incorporate the requirements for documentation, withholding and reporting. In addition, each FI must determine its compliance with FATCA requirements.
GCS’s materials covering Policies and Procedures provide a clear understanding of the seemingly endless requirements.
TRAINING
An FI must facilitate training programs that communicate policies and procedures to any line of business responsible for: obtaining, reviewing, and retaining documentation; making payments subject to withholding; reporting payments; or for a FI acting as a Qualified Derivatives Dealer (QDD), entering into potential section 871(m) transactions.
GCS’s Training addresses the complexities of the regulations in a clear, flexible, live training environment with accompanying reference materials or via webinar. Our thorough training will equip professionals with the knowledge to achieve compliance.
MONITORING AND SYSTEMS
An FI must monitor relevant business practices and arrangements that affect the FI’s compliance. This includes, for example, the FI’s acquisition of lines of businesses or accounts that give rise to documentation, withholding, or reporting obligations. In addition, the FI must ensure that proper systems and processes exist that allow for the FI to fulfill its accountabilities with the regulations.
GCS can test the systems and processes to identify any gaps toward compliance along with assessing business changes.
TAX REPORTING
An FI is required to file annual tax returns to the IRS, as well as electronically file data pertaining to U.S. source income payments made to its clients. Preparing and filing of 1099 and 1042-S forms can prove both time-consuming and potentially carry the risk of costly compliance errors. GCS provides various levels of support and assistance aimed at reducing this tedious operational burden and mitigating the risk of detrimental errors.
GCS provides various levels of support and reporting assistance, ranging from electronic transmission of reporting data to full outsourcing of the reporting function to meet the requirements.
DIAGNOSTIC REVIEWS
FIs should plan routine reviews by examining overall level of compliance with the requirements before mandated reviews or visits from the IRS.
GCS offers diagnostic reviews that involve examining compliance in a relaxed environment without disclosure of results. At the conclusion of a diagnostic review, GCS provides the FI with a comprehensive report reflecting: evaluation of compliance with regulations, identification of compliance gaps, guidance on remediation of compliance gaps and recommendations toward a successful future reviews.
PERIODIC REVIEW
For a QI, the periodic review must be conducted during a 3-year certification period by a reviewer that regularly engages in the practice of performing reviews of a FI’s policies, procedures and processes. The reviewer must report findings that reflect the reviewer’s independent judgment. The Periodic Review must include.
- Documentation requirements, withholding rate pools, withholding responsibilities, return filing and information reporting and significant changes of circumstances.
- Test a sample of transactions and accounts related to the FI’s documentation, withholding, reporting, and other requirements, and identify any deficiencies.
GCS can conduct the periodic review and related reporting to the RO, which would furnish the RO with the requisite knowledge that he/she needs to provide certifications to the IRS.