FATCA responsible officer certifications of compliance - YouTube video text script

YAMALIS: So, I see it's the top of the hour. For those of you just joining us, welcome to today's webinar, FATCA Responsible Officer Certifications of Compliance or FATCA. We're glad you're joining us today. My name is Philip Yamalis and I'm a Stakeholder Liaison with the Internal Revenue Service. And I will be your moderator for today's webinar which is slated for approximately two hours or 120 minutes.

Before we begin our webinar, if there is anyone in the audience that is with the media, we ask that you please send an email to the address on the slide. Be sure to include your contact information and the news publication that you're with.

Our Media Relations and Stakeholder Liaison staff will assist you and answer any questions that you might have. As a reminder, this webinar will be recorded and posted to the IRS Video Portal [IRS Video Portal is not available, please refer to IRS.gov], we're sorry for that technical difficulty.

It will be included and posted to the IRS video portal [IRS Video Portal is not available, please refer to IRS.gov] in just a few weeks. This portal is located at www.irsvideos.gov, again, that's irsvideos.gov [IRS Video Portal is not available, please refer to IRS.gov]. Please note, however, that Continuing Education Credits or Certificates of Completion are not offered if you view an archived version or a recorded version of our webinars on this IRS Video Portal [IRS Video Portal is not available, please refer to IRS.gov].

As I mentioned before the top of the hour, in case you experience a technology issue today, this slide does – it shows some helpful tips and reminders for you. Don't forget, we posted a Technical Help Document that you might download from the materials section on the left side of your screen.

It does provide the minimum system requirements for viewing this webinar along with some best practices and quick solutions. After you've completed and passed the system check but yet you're still having problems, we ask that you try one of the following options that you see here.

The first option is to simply close the screen or the browser where you're viewing the webinar and just re-launch it. That usually does the trick. Now, the second option is to get in there and click on the settings on your browser viewing screen and select HLS as the slide shows.

Now, also, you should have received a Resource Document as well as the PDF copy of today's PowerPoint in a previous reminder email. But if you haven't received it, no worries, you can download them by clicking on the materials dropdown arrow on the left side of your screen as indicated on this slide.

A Closed Captioning is available for today's presentation. If you’re having trouble hearing the audio through your computer speakers, please click the Closed Captioning dropdown arrow located on the left side of your screen. This feature will be available throughout today's webinar.

During the presentation, we will take a few breaks to share knowledge-based questions with you. At those times, a polling-style feature will pop up on your screen with a question and some multiple-choice answers. We ask that you select the response that you believe is correct by clicking on the Radio Button next to your selection and then click Submit.

Some of you may not get the polling question and this could be because you have your Pop-up Blocker on. So, please, right now, take a moment to disable your Pop-up Blocker, this way you can see and answer the questions that pop up.

If you have a topic-specific question today, we ask that you please submit it by clicking the Ask Question dropdown arrow to reveal a text box. Simply type your question in the text box and then click Send. Now, this is very, very important, we ask that you please do not enter any specific or sensitive taxpayer-specific information when submitting your question. We are live on the Internet after all.

Again, ladies and gentlemen, welcome and thank you for joining us for today's webinar. Before we move along with our session, let me make sure that you're in the right place. Today, our Large Business and International Division of the Internal Revenue Service will share information related to the Foreign Account Tax Compliance Act also commonly referred to as FATCA.

This webinar is scheduled for approximately 120 minutes. So, without further ado, let me take this opportunity to introduce to you Yuen Chan. Yuen is the Program Manager for Foreign Payments Practice in our Large Business and International Division. Good morning Yuen.

YUEN CHAN: Good morning, Philip. Thank you. Hello. My name is Yuen Chan and I'm the Senior Manager of the Foreign Payment Practice Program Office. I would like to thank our colleagues from Communications & Liaison in putting together this webinar. We appreciate the opportunity to discuss and provide an overview of the FATCA certification process.

In today's webinar, we will provide a background on the FATCA program and walk you through the FATCA certification process. If there are other FATCA-related topics that you are interested in to learn more about such as FATCA registration or the other FFI list, please type this in the Chat Box. This will help in planning future events.

For today's webinar, the Subject Matter Experts speaking with you are Todd Allen, Senior Program Analyst with 21 years of IRS experience; Bob Simmons, Senior Revenue Agent with a total of 32 years of tax experience and 25 of the 32 years in International Tax; and Trevon Singh, Senior Tax Analyst with six years of IRS experience.

Without further ado, I will now pass the floor to Todd to begin our presentation. Todd?

TODD ALLEN: Thank you, Yuen. Good day. My name is Todd Allen and I'm an analyst in the FATCA program. As previously mentioned, today's session will be focused on FATCA certification.

So, today, we will give a brief introduction to the Foreign Account Tax Compliance Act program. For the most part, we'll be using the abbreviation of FATCA since Foreign Account Tax Compliance Act is a mouthful. We will give an introduction to the FATCA certification requirements and describe the FATCA certification requirement of the Responsible Officer. Once again, we will often refer to Responsible Officers simply as ROs.

We will discuss the difference between a Certification of Pre-existing Accounts often referred to as a COPA and a Periodic Certification. We will discuss who is required to certify and the types of entities that are required to submit their respective certifications.

We will examine FATCA classifications and the relation to the various certification question set. We will discuss the timelines and due dates in the Periodic Certification and the Certification of Pre-existing Accounts. We will review the various certification results and the implications of these results. We will walk through the sample certification navigating and describing the certification process.

We will discuss certification-related event of default and the recently issued interim guidance regarding certification event of default notices. We will identify resources that will assist in navigating and responding to questions that arise related to certifications. Finally, we'll go over some key takeaways from the discussion.

As mentioned earlier, the focus of this discussion is FATCA certifications. But before we get into FATCA certifications, we thought it may be helpful to give a brief overview of the FATCA program.

The Foreign Account Tax Compliance Act, FATCA, was enabled in 2010 with the first FFI list being published on July 1, 2014. When we refer to FATCA, officially we're referring to Sections 1471 to 1474 known as Chapter 4 of Title 26 of the United States Internal Revenue Code. FATCA is intended to increase transparency with respect to U.S. taxpayers holding assets from non-U.S. financial accounts and non-U.S. entities.

The overall purpose of FATCA is to detect, deter and discourage offshore tax abuse through increased transparency, enhanced reporting and strong sanctions. And we'll sort of back to this but it's important to stress that FATCA is really about transparency enhanced by reporting more than taxes and withholding.

This transparency is achieved by FATCA generally requiring the Foreign Financial Institutions which we'll be referring to as FFI throughout this presentation and certain other Non-Financial Foreign Entities which we'll refer to as NFFEs, report certain foreign assets held by their U.S. account holders. Entities that do not comply with the requirements of FATCA are subject a 30 percent withholding tax on certain withholdable payments made to them.

I mentioned earlier that this is just a brief introduction to FATCA which could be a whole webinar by itself. I have quite a few friends that are expats or working for Foreign Financial Institutions and I know that there's a lot of misinformation and misperceptions about FATCA out there.

I want to stress that the goal of FATCA is to collect information on U.S. accounts, not to withhold tax. I want to stress this again, the goal of FATCA is to encourage disclosure of the U.S.-owned accounts and Foreign Financial Institutions by both the FFI and U.S. taxpayers although in this presentation, we'll focus on the FFI side of FATCA. Withholding is merely used to encourage this reporting.

Before we continue, I do want to be sure to note that for purpose of this presentation, the terms Foreign Financial Institution, FFI, and Financial Institutions, FIs, are used interchangeably and may include Non-Financial Foreign Entities also known as NFFEs which have a FATCA requirement. Unless we specify otherwise, we will use FFI to refer to all institutions that have FATCA requirement.

Next, let's identify some of the key participants of FATCA. We know that there are others but some of the key participants that we wanted to single out are FFIs, NFFEs, Withholding Agents and U.S. taxpayers.

First up are Foreign Financial Institutions. FFIs most generally register with the Internal Revenue Service to become a participant in FFI. This registration is normally accomplished by utilizing the online FATCA Foreign Financial Institution Registration System located on irs.gov but can be done with the paper Form 8957. However, I encourage everyone to use their online system as it is much easier, almost instantaneous and eliminates many of the common errors that are encountered when submitting the paper Form 8957.

FFIs must generally agree to report certain information on U.S. accounts to the Internal Revenue Service. For the most part, for most financial institutions, this is done through filing the Form 8966. Finally, FFIs generally must also collect documentation from account holders and withhold on recalcitrant account holders. Part of this due diligence is to know your customer.

Next we have the Non-Financial Foreign Entities. NFFEs must report substantial U.S. owners to either a Withholding Agent or if there has to be a direct reporting method directly to the Internal Revenue Service.

Next are the aforementioned Withholding Agents. Much like their name suggests, Withholding Agents process payments determining the Chapter 3 and Chapter 4 status of the payee by entering a Form 1042 as submitted (ph) and withhold on withholdable payments to non-participating FFIs and non-compliant NFFEs as appropriate.

And the final key FATCA participant we wanted to mention are U.S. taxpayers. U.S. taxpayers must self-identify and disclose foreign financial assets and offshore accounts to the Internal Revenue Service. This is usually accomplished through the filing of the Form 8938 with their individual tax return. However, since the focus of today's discussion is about the certification, this presentation is primarily focused – is primarily focusing on the first two boxes (ph), FFIs and NFFEs.

As we mentioned previously, FFIs must register to become a participating FFI under FATCA. And since this presentation is about FATCA certifications, the foreign entity who can certify, they must have a FATCA ID and a FATCA registration. The best way to accomplish this is to read the FATCA Foreign Financial Institution Registration System which could be accessed at irs.gov/fatca.

The FATCA Registration System is a web-based system that financial institutions use to register their entity under FATCA to obtain a FATCA ID, obtain a Global Intermediary Identification Number known as a GIIN. It is issued when the registration is approved and to receive communications from the Internal Revenue Service.

The registration system includes a message board on which the IRS can post messages for the entity. The RO will receive an email to check for messages when a new message has been posted. While we'll go over this later in the presentation, I cannot stress enough how important it is that you keep your responsible information – Responsible Officer information current including the email address.

It is also important to make sure that IRS emails are white-listed if possible. Otherwise, the RO might not be aware that there are messages waiting on the message board.

And why is this important? The IRS has been posting fairly routine messages to the FATCA registration accounts regarding a change in the entity's registration status, notice to renew the FFI agreement, notice that certification periods are open and that a certification may be required, et cetera, for years now. In the last year or so, we've been utilizing some more important entity-specific communications such as Event of Default Notices, notices of termination and request for additional information.

So, as we've discussed, it's important that the RO keeps their information current so they will be aware that there are these communications. We will be giving examples of the registration system later in the presentation when we walk through certification.

Now, off to Philip for our first polling question.

YAMALIS: Thank you, Todd.

That sounds good to me for our first polling question. Audience, here it is. Which of the following statements is true regarding FATCA? A. FATCA generally requires that FFIs otherwise known as Foreign Financial Institutions, and certain non-FFIs report on certain foreign assets held by non-U.S. account holders. Is it B, entities that do not comply with the requirements of FATCA are subject to 10 percent withholding tax on certain withholdable payments made to them. C, the goal of FATCA is to collect information on foreign accounts, not withholding tax. Or is it D, all of the above.

So, which of the following statements is true regarding FATCA? One of these true, take a moment. Click the Radio Button that best answers the question. Give you a minute here. OK. Let's just take a few more seconds to make your selection from the aforementioned answers.

OK, folks, let's go ahead and stop the polling now. Let's share the correct answer to this polling question on the next slide. There it is. The correct response is C, the goal of FATCA is to collect information on foreign accounts, not to withhold tax.

I see that approximately, oh, we can't see a result right now. Oh, there it is, 89 percent of you responded correctly, 89 percent, not so bad, B plus when I was in college. So, we'll go with that. Remember, goal of FATCA is to collect information, not to withhold. The foreign entities that are PFFIs, right, those that have entered into an FFI agreement and are in compliance with the requirements of the agreement, there's no need to withhold.

So, Todd, with that, let me turn it back over to you and you could talk about, I guess, that FATCA Online Registration User Guide

ALLEN: Thank you, Philip. Well, it does look like they are OK paying attention this morning. So, the best resource for the FATCA registration system is the IRS Publication 5118 known as the FATCA Online Registration User Guide.

The FATCA Online Registration User Guide is a comprehensive document that provides guidance on a wide number of topics including registering an entity, system requirements including browser recommendations and this includes systems that throw you for a loop such as the fact that we do not recommend this on Microsoft Edge system, how to manage your account, how to renew your FFI agreement when needed and a rather detailed overview on how to submit FATCA certification.

While the world tends to fall into two camps when it comes to manuals and user guides, those like Trevon that will read a manual cover to cover and those like myself that will skip the manual and just dive in, only looking at the manual if I encounter issues. The Publication 5118 does a good job of providing just the right amount of information to satisfy both of these groups.

This should be your first resource when it comes to questions about FATCA registration system as we find that the majority of inquiries are addressed in the Publication 5118 or the FAQs published on the website.

And with that, let me hand off to Trevon Singh for an introduction to FATCA certifications. Trevon?

TREVON SINGH: Thanks, Todd.

Hi, everyone. I'm Trevon Singh and as Todd mentioned, I'll be starting off with an overview of the FATCA certifications and the type of entities that are required to certify.

There are a variety of FATCA requirements which are applicable to the participating financial, Foreign Financial Institutions and Non-Financial Foreign Entities or FFIs and NFFEs for short. Generally, the Responsible Officer is a person that's responsible for the entities FATCA compliance. The RO is required to be listed in the FATCA registration system and an important thing I want to note is that the RO can also designate a point of contact and list up to five point of contacts in the registration system.

So, a point of contact would be a person designated by the RO as authorized to receive FATCA- related information for the entity in addition to the RO and this can come in really handy when having communications with the IRS in the event the RO is unavailable.

The RO does have a variety of FATCA responsibilities and some of those responsibilities for the RO include establishing a compliance program, managing the various communications with the IRS and submitting the FATCA certification to the IRS if required.

In regards to establishing the compliance program, the compliance program has to include policies, procedures and a process that's going to enable the entity to satisfy its factor requirements as it relates to due diligence withholding and reporting for the entity.

As part of the compliance program, the RO has to perform both the review of the program as established and the FFI's compliance with its FATCA requirement. And this has to be done for each certification period. And the RO also has to take into consideration the findings of the review when making the certification to the IRS.

The compliance program can also be for a Consolidated Compliance Program for FFI that are part of an Extended Affiliated Group or EAG and we'll expand on this in a bit in a few more minutes because I think we've got a lengthy conversation on this.

One last thing to note here is that Sponsoring Entities are also required to adopt the compliance program which is going to oversee compliance with respect to each of the sponsored entities.

Many of you are familiar with the GIIN, which is the abbreviation for the Global Intermediary Identification Number. The GIIN composition comprises of alphanumeric characters which make up the FATCA ID. It also indicates the entity type. It has the FI category and country.

On this screen, you want to go over the various FI categories and how it relates to the fact of certification. So we've listed the abbreviation of the entity type. The first one we have listed is SL, which is a single entity. So a single entity is an entity that has no members and it's registering for itself and one of court's branches that it has. In regard to the single entity, they could only submit a certification on its own behalf.

A lead is an entity that agrees to act as a lead for members within its expanded affiliated group, and the lead can submit individual certifications, or it can act as a compliance FI to submit a certification on behalf of members within its EAG. And as mentioned earlier, we will dive deeper into the EAG and the lead certifications.

A member is an entity which belongs to an EAG at the lead. A member can submit its own certification individually or it could have the certification submitted on its behalf by its lead if it’s part of a consolidated compliance program.

And last on this slide, you have a branch. So a branch cannot submit individual certifications, but certification for the branch has to be submitted by its FI. A sponsoring entity, so the sponsoring entity, this might be a mouthful, so I'll try to break this up. For registration purposes, the sponsoring entity is required to register itself as a sponsoring entity and it also has to register each of its sponsored entities; that it is acting on behalf of.

The sponsoring entity is an entity that has agreed to perform certain obligation for its sponsored entities, which have a sponsorship agreement in place for. For FATCA certification purposes, the sponsoring entity has to submit a certification for itself acting as a sponsor along with those of its applicable sponsored entities, which it is acting on behalf of.

There are different types of sponsored entities. As you can see on the slide, the sponsored entities can include Sponsored Funds, Sponsored Direct Reporting NFFEs, Sponsored Subsidiaries, or Sponsored Subsidiary Branches.

One thing to note about the branches, an entity with a branch or one that has multiple branches is automatically going to be certifying on behalf of all of its branches. The entity does not have an option to pick and choose between the branches. However, the sponsoring entity, that acts a little differently. It's not the same as the branch. The RO can pick and choose which sponsored entity it's certifying on behalf of.

If the sponsored entity is being certified on and there's some that the RO is not picking or selecting, the RO has to give an explanation where required if it's not selecting that sponsored entity.

So the web link on screen is for your reference. It's basically a link to the GIIN Composition Information on the IRS website. It provides a little more detail on the GIIN composition as we were discussing today and it's a good item to review, because you could see what you can assess in the face of a GIIN. You should be able to identify the FI type just by looking at the GIIN. You could also determine the country based on the last three digits of the GIIN which is the country code. And you could always go to the FFI list also.

Previously, we talked about the Expanded Affiliated Groups or EAG and the Consolidate Compliance Groups or CCGs. So an EAG is basically a group of entities connected through common ownership which in this case would be the lead member relationship.

For FATCA of purposes, an Expanded Affiliate Group can have one entity in the group that's acting as the lead entity which is going to take on the responsibility of registering some or all of the members of the EAG. The members of the EAG can elect to be part of a consolidated compliance program under the authority of a compliance FI which would be the lead of the EAG.

FFIs that are part of a Consolidated Compliance Group will complete a FATCA Certification in a consolidated basis, which really means they're going to complete the Consolidated Compliance Groups, CCG Periodic and COPA Certification. And when completing a CCG certification, the compliance FI acting as the lead will be completing the certification and must select all eligible members that's going to be included in that certification.

So I know the CCG certification, that was a lot to take in. So in summary, what that is really getting to is that you're registered as an EAG, you may have an option to submit a CCG certification for your lead and members. Instead of submitting individual certifications to each member, you can submit one certification or if you have a consolidated compliance program.

There are two types of FATCA certifications that can be required to be completed by the RO. There's the Certification of Pre-Existing Accounts which we're referring to as the COPA and there's the Periodic Certification.

The COPA Certification of Pre-Existing Accounts is a one-time certification in which the RO of the entity certifies that the entities complied with identification and due diligence procedures with respect to its pre-existing account.

So when the RO is submitting the COPA, the RO is certifying whether the entity followed the due diligence rules under the FFI agreement, the regulations or the applicable IGA with respect to those accounts.

Now for periodic certification, the name indicates it's not a one-time certification, but it's actually a Periodic Recurring Certification. We'll dive a little deeper into the frequency of the periodic certification in a bit. The periodic certification is a certification in which the RO does certify or the RO certifies the entity's compliance with respect to its ongoing FATCA obligations.

This includes identification of accounts, withholding, reporting, certification requirements amongst other FATCA requirements. And the RO is also certifying that the entity meets the requirements of its FATCA classification. Certain entities other than an entity with a PFFI classification are required to complete and submit the FATCA certification for both COPA and periodic.

The FATCA registration is going to suggest a FATCA certification type based on your FATCA classification selected and your country of residence or jurisdiction selected that’s in the registration system. This is why it's really important to ensure your registration information is accurate. If you haven't logged into your registration account in some time, I do strongly recommend you log in and review the information to ensure that you have the applicable country registration, classification and things like that on file.

This chart provides a high-level overview of entities that are required to certify. So we could start off by looking at a few of them. The first one we have listed is the PFFI including the reporting, sorry about that, we have a PFFI including a Model 2 FFI. And that entity, that classification is required to submit both a COPA and a periodic certification.

Next, we have a grouping of RDC classifications and those are Registered Deemed Compliant FFIs. As you can see, they don't all have the same requirements in regards to COPA and periodic. They all have to submit a periodic certification, but not all are required to submit a COPA certification. Model one FFIs generally don't have a certification requirement and direct reporting NFFEs don't have to complete a COPA, but they do have to complete a periodic certification.

So just jumping back to the Model 1 FFIs, previously I mentioned that Model 1 FFIs generally don't have to certify, but there are exceptions that do exist. If a Model 1 has branches operating outside of the Model 1 jurisdiction, then that FFI will have to submit a certification on behalf of those branches.

I've mentioned earlier, branches can't submit their own certification, so the FFI would be submitting the certification for them. So basically, what that's getting at is that if a Model 1 FFI has a branch in a Model 2 or Non-IGA jurisdiction, then it will have to certify on behalf of those Non-Model 1 branches.

OK, with that, I'll turn it over to Bob who's going to go over the FATCA certification questions.

BOB SIMMONS: Thanks, Trevon. That was a great overview. I appreciate it. So now, let's take a look at what each of those FATCA certifications, COPA and periodic actually mean. Let's start with the COPA.

The COPA or Certification of Pre-Existing Accounts is a one-time certification in which the Responsible Officer of an entity certifies that the entity has complied with the identification and due diligence procedures with respect to its pre-existing accounts.

And the question that comes up is, what are the pre-existing accounts? Treasury regulations define pre-existing accounts as those accounts or obligations that are outstanding on the effective date of the FFI agreement. The term effective date of the FFI agreement is generally the date the FFI is issued again.

Therefore, for a PFFI that has an FFI agreement with an effective date of July 1st, 2018, the pre-existing account will be those accounts or obligations that are outstanding as of July 1st, 2018. For pre-existing accounts, the rules provide a somewhat simplified due diligence approach for reviewing and identifying US accounts. When I say due diligence, I am referring to the process for identifying US accounts.

When submitting the COPA, the ROs will be certifying whether the entities follow the due diligence rules under the FFI agreement or the IGA with respect to those accounts. The registration system will suggest a set a certification questions based on the FATCA classification and country/jurisdiction of residence.

Note, as an RO, you may change the question set from this one selected by the system, but before I would switch to a different set of questions, I would review my registration information to make sure everything is correct and up to date. The FATCA certification FAQ page and Publication 5118 addresses various topics which may arise during the certification submission process.

I know the next two slides are a little difficult to read. The next part is the actual certification questions that the RO will have to answer and it gives each of the question sets. There are five for a period – for COPA and then 12 for periodic. All of the questions in the COPA are related to the requirements applicable to each classification with respect to the due diligence procedure for the pre-existing accounts.

Let's take a brief look at what a COPA requires. Before we do this, I want to mention that these questions, the FATCA certification questions, are available on the IRS webpage. If you type in draft FATCA certifications in the Search box and then the screenshots in the next several slides have been taken from those graphs. I would encourage everyone to actually look at the set of questions you will be answering before going into the system and actually providing the answers. That way you'll know exactly sort of what the questions coming up are going to look like and what type of information that's going to be required to be provided.

There are five different types of COPA. Remember the slide that we saw earlier regarding who is required to certify? Well, there is a COPA for participating Foreign Financial Institutions, including reporting Model 2 FFIs, then a Consolidated Compliance Group. The Registered Deemed Compliant FFIs local and the Registered Deemed Compliant FFIs Restricted Funds. Also, there's the Sponsoring Entity of Sponsored FFIs.

Again, I want to apologize for this slide. It's very difficult to read. I know it's very small, but this will give you an idea of the different question sets that can come up. Depending on how the entity was registered, the FATCA classification select and registering, the system will pick up which type of questions to be answered. This is why it's so important to keep it up to date again as we've previously talked about.

The first part of the COPA is the identification section. This will be the same for all types of COPA and it's also true for periodic certification. So, this section will be pre-populated based on the information already in the registration system. The RO will be asked to verify that the information is accurate. If they make any changes to this section, the changes will be saved to the registration account. So that's important. You're actually – when you answer these questions, you're actually updating your registration information in the system.

As part of the section the RO will be also asked to identify what type of financial institution it is and to describe the financial institution’s business or the line of business. This information will give us a bit more information about the entities we're dealing with so that we can identify trends and look at particular industry sectors. For example, there might be something we take a look at.

I'd like to turn it back over to Phil, because I think we're up against another question, Phil. Over to you.

YAMALIS: Bob, we certainly are. Thank you so much. So audience, here is our second polling question. There it is, does the certification questions to which an entity will be required to respond will depend on A, the classification of the entity, B, the jurisdiction in which it's located, C, whether the entity has filed a US tax return, or is it D, both A and B?

So take a moment. Click the Radio Button that best answers the question. I'll give you just a few more seconds to make your selection here. I hear somebody's microphone is live. Sorry about that. OK, let's go ahead and stop the polling now and let's share the correct answer on the next slide. And there it is. The correct response is D, A and B.

I got that correct. Let's see how you did. I'm showing about 79 percent of you responded correctly. So why don't we clarify that just a bit, Trevon, Bob, it's probably better for you. Will you want to clarify that answer for us, please?

SIMMONS: Hey, Phil, this is Bob. Yes, I'll take that one. So when you take a look at this, the main two things that the system is looking is the classification and the jurisdiction/tax residence to which an entity has in its registration system. Whether the entity has filed a US tax return is somewhat irrelevant to this question and to the certification questions you'll receive.

Back to the point we made earlier, this goes back to keeping your registration information up to date as you've already previously heard from both myself and Todd probably at this point. So if you keep those things up to date, the system will give you the actual certification set of questions that you need.

YAMALIS: Thanks for clarifying that for us. I appreciate it. I believe next we're going to go in and talk a little bit more about the Certification of Pre-Existing Accounts or the COPA.

SIMMONS: Yes Phil is a big fan of the COPA by the way.

YAMALIS: I am.

SIMMONS: You are. COPA is required to be submitted at the same time that the first periodic certification is due, which is July 1st following the end of the first certification period. So in this case, the certification period is three full years. So we'll give an example that sort of helps explain this a little.

For an FI that has an agreement with an effective date of July 1st, 2016, the certification period will cover three full calendar years, so that would be 2017, 2018 and 2019. The COPA would then be due July 1st, 2020. So in this case – but in this case this year, there's been a lot going on and due to the Coronavirus, we have an automatic extension that has been issued to December 15th, 2020 just for certifications due this year.

So it is a one-time extension and you don't have to do anything to receive it, all FIs receive an extension from July 1st to December 15th for 2020.

But I do, would like to point out one thing, the COPA was originally due two years from the effective date of the agreement. But due to delays in the system and feedback from the industry, regulations were issued to change the deadline to actually coincide with the date when the first periodic certification was due. However, it's important to note that entities are still required to complete your due diligence with respect to preexisting accounts within the first two years from the effective date of the agreement.

Note that the certification system part of the online registration wasn't deployed until July 2018, which was quite a bit later than the actual certification system itself. So in that year, first two certifications were due December 15th, 2018 just due to the system being deployed so late in the year. When a certification is submitted, the system will indicate the result of the certification. The result is dependent on how the questions are answered or the option the RO has selected in part two that I am completing the certification, I am unable to complete the certification, or I'm not required.

The results of a FATCA certification will indicate whether the IRS needs to take additional action with respect to an entity. For example, we may need to ask more questions and require different additional information. Perhaps whether we need to initiate the termination process or the event of default process. For the COPA, these are some of the possible, these are the results, due diligence, that means they answered all the questions and didn't indicate any failures. And they complied with all the due diligence requirements.

I’d like to stress as we go into this, that the vast majority of FIs receive due diligence when they complete their certification. There are some other results which aren't as favorable that we'll sort of go into now, failure to certify. When completing part two of the certification and the options they indicate they were unable to complete the cert, they would also be the result when the response to the questions indicate that they failed to comply with the requirements with respect to the preexisting accounts and they indicated they are not going to fix it. A failure to certify results is a treatment as if they didn't submit a FATCA certification.

As mentioned earlier, a failure to submit a required FATCA certification is an event of default which may result in the termination of the entity’s FATCA status and remove all the entities GIIN from the FI list. All this means that an entity was considered is not compliant with FATCA and will be subject to FATCA withholding on any withholdable payments it receives once its GIIN has been taken away.

And another result will be qualified certification. This means that the response to the questions indicate that they failed to comply with some of the requirements related to their preexisting accounts and have not corrected the failures at the time they completed and submitted the certification, but they then indicate that they will be correcting those failures. Another result is not required. The other option they can select indicate the entity is not required to complete a certification. If they select this option, they will have to provide an explanation as to why they are not required. IRS will review the explanation to determine if determination is correct.

I'll make the note that this is very important because a person physically will look at every explanation provided in this category. Someone from the IRS will take a look and see what the reason is. The explanation provided by the RO will be renewed and will be accepted, rejected, or need more information. Note if the IRS still requires additional information to confirm or clarify the explanation provided, they will reach out and contact the ROs through the message board.

Now I would like to turn it back over to my colleague Trevon Singh to provide an overview of the periodic certification.

SINGH: Thanks Bob. So as Bob mentioned, we're going to be taking a look at the periodic certification and results to see some of the similarities and differences from periodic certification in COPA.

So difference in COPA, the periodic certification is a recurring certification that relates to the entity’s ongoing compliance with this various FATCA requirement. As Bob mentioned, the COPA was the due diligence of preexisting accounts. The periodic certification is required to be completed and submitted periodically for each certification period which is basically every three years. I say basically, but there are exceptions. The main ones are for the initial certification and typically the final certification.

The periodic certifications as Bob mentioned are due no later than July 1 of the following – the year following the entity’s applicable certification period. So a certification period covers a period of three full calendar years. The first or the initial certification period is going to begin on the effective date of the FFI agreement or with the date the GIIN was issued and approved, plus three full calendar years which end on December 31st.

So each subsequent certification period is then every three calendar years following that certification period. And as mentioned before, one thing to note is that if an entity cancelled with FFI agreement, then any applicable FATCA certification for this – to final certification generally will be due six months from my cancellation date.

Look on screen, let's go over a quick example, because personally for me, the visuals help me better to help me put it all together. So here we have listed that a PFFI has an FFI agreement with an effective date of March 10, 2016. So we're saying that that's when they generally given and approved, so the certification date will begin on March 10th, 2016.

The first certification period is going to run from that date all the way until December 31st, 2019. And that periodic certification is then due July 1, 2020. So that first year is a partial year, doesn't count towards the first three full calendar years, and that's how we end up with that certification period and due date.

Then any subsequent certification period from that will be from January 1, 2020 to December 31st, 2022 which is the three full calendar years. So for this case, the certification is going to be due on July 1, 2023. So the registration system does show your certification due date, but it's not something that you have to track necessarily on your own, you can always log in to do the date. However, it is really important to understand your certification period when you're performing your compliance review. So it's definitely something to – that's good to understand.

With that, I'll turn it over to Phil, I think we have another polling question.

YAMALIS: You got it Trevon. Thank you so much. Audience, our third polling question is up on your screen now. It says, when are periodic certifications due? Is it A, certifications are due only when an entity is going out of business. B, certifications are due at the end of the year. C, certifications are due no later than July 1st of the year following the end of the third full calendar year, the year in which the entity's FFI agreement is effective. D, three years from the date from which the entity's FFI agreement is effective.

Let me remind everybody that FFI stands for Foreign Financial Institution. Take a moment, click the Radio Button that best answers the question, when are periodic certifications due? I'll give you a few more seconds here to make your selection. OK. Thank you. We're going to stop the polling now and let's go ahead and share the correct answer on the next slide. And the correct response is C, certifications are due no later than July 1st of the year following the end of the third full calendar year, the year in which the entity's FFI agreement is effective.

Take a look at our percentage here. I see that 82 percent of you responded correctly. That's a pretty decent response rate. So thank you so much for your attentiveness to the webinar so far. With that, Trevon, I'm going to turn it back over to you to continue our presentation.

SINGH: Great. Thanks, Phil. When the RO does start the online certification process, they're going to be prompted with some initial questions that will determine the type of FATCA periodic certification that's applicable to the entity.

The RO either is going to certify that the entity maintains effective internal controls or the RO's going to submit a qualified certification. If the RO submitting a qualified, I'm sorry, no. If the RO is submitting a Certification of Effective Internal Controls, then the RO certified that they’ve established a compliance program as required by the FATCA requirements, they also are certifying that there were no material failures for that certification period or if there happens to be material failures, they were corrected and fixed before the date of the certification and that appropriate steps have been taken to prevent them from reoccurring again.

Now if the RO is submitting a qualified certification, the RO then is certifying that there were event of defaults and/or there were material failures during the certification period that either have not been corrected as of the date of the certification and that there's going to be corrective actions taken to remediate those failures and prevent them from reoccurring again in the future.

There are a variety of fact patterns we want to qualify certification can be completed. It depends on the material failures and the event of defaults. Here, we have listed some of those examples. So instances in when a qualified certification could be completed are if there's a material failure that has not been corrected and there are no event of defaults. For the second example, we have listed is that there's no material failure but events of defaults do exist or we could have material failures that were identified and corrected and there were also events of default that were not corrected. We have material failures that were identified and that have not been corrected and there were event of defaults.

The qualified certification is only available for the question set for the PFFI, CCG, and Sponsoring Entity of Sponsored FFIs. One thing I want to note is that if there were any events of default, whether they were corrected or not, that the qualified certification has to be submitted by the RO. So, again, regardless of those EODS have been corrected or not, the qualified certification is required by the RO.

So same, similar or same as the COPA, depending on how the RO response to the questions to the certification, that will determine the overall result for the certification. So after the RO completes and submits the periodic certification, we're going to see one of four results provided. It's either going to be a compliance result, failure to certify, qualified, or not required. The compliance result, it's similar to due diligence result, the COPA. This means that the RO has, the RO's response to the questions don't indicate any material failure or if there were any indicated, it shows that those were corrected prior to the certification date.

Now failure to certify results, there are a few different scenarios in which you could see this result. If the RO selects the option indicating that they're unable to complete a certification, they can see the failure to certify results or if there are any material failures, sorry, if there are any material failures or event of default that were identified and then the RO also indicates that they won't take corrective action, they can see the failure to certify result. And lastly, if the responses from the RO indicate a failure to comply with any of the requirements with respect to the entity's FATCA qualification.

Qualified certification result, so this result is when the RO completes a qualified certification, meaning that they indicated that they had events of default and/or they had material failures that had not been corrected as of the date of certification, but they're going to correct such failures. So the last result, not required. Again, this can be displayed with a few different instances, if the RO indicates that they're not required to complete a periodic certification for this period, this result will show up.

However, if they do select that they're not required, the RO is required to provide a detailed explanation in the text box. And there's ample space to provide to provide explanations, about 15,000 characters. And the IRS can follow-up with additional inquiries on the explanation. So we do advise that you be as thorough as possible and complete with your explanation explaining why you believe you're not required to submit a certification.

The system can also determine that the certification is not required and if the system does make that determination, it's based on the entity’s FATCA classification and the country of tax residence listed in the system. However, the one thing, regardless of the system determination, it's really important that the RO reviews all the registration information and they make an assessment if any certifications required to be submitted or not based on their facts and circumstances.

With that, I'm going to turn it over to Todd who's going to go over the, how an RO submits the certification in the registration system.

ALLEN: Thanks Trevon. Now that we've gone over the basics of both the COPA and periodic certifications, we're going to do a quick walkthrough of the sample periodic certification.

But before we start with that, I did want to let you know that some of these screenshots may be a bit hard to read during the presentation. As you will see shortly, we tried to zoom in on any sections of the screen that are particularly important. Other screens are primarily to let you know where things are generally located. The slide deck will be available for download for those of you interested in seeing the screenshots in more details.

Because this is just a brief walk through of the certification process, we will go through some of these slides rather quickly. As many are primarily for illustrative purposes only, once again, the slides are available for review offline. Finally, while some of these screenshots show a FATCA ID, I want to assure everyone that this is an internal test account. No actual account information is contained in these examples.

So back to the Financial Institution homepage, a walkthrough of the FATCA certification should start with the entity's homepage. This should be familiar to most of you as parts of the screen are present – are presented to most FATCA accounts. But let's call out some areas for discussion. The top left section is the account information section with basic information regarding the Responsible Officer, points of contact, FI name, FATCA ID, GIIN, effective date, and status. Just below this is a section that deals with the renewal of the FFI agreement that will appear on the account if the entity has ever gone through the renewal process.

The only thing I want to mention here is that if you had a FATCA account during the renewal process, and did not click the renewal link, even if you are not required to renew, it will continue to list your renewal status a overdue. There is currently no way to remove this, we're working on it since it's a common concern amongst the FIs, but if your account is in approved status after the previous renewal period, no further action is required even if the renewal status is listed as overdue.

But the three sections that are most germane to FATCA certification are the message board in the upper right-hand side. This is where you will see account status-type messages reflecting the status changes and routine events on your account. Additionally, you may see messages titled, "A message from the IRS" these are important as they typically, they typically are account specific messages such as formal notices, request for additional information, or other communications specific to your account that will often require an action.

On the left-hand side, the certification information section will be populated once the certification period opens for very specific certifications. There will be a separate section for COPA and periodic. The information regarding the COPA will often populate as soon as the FI is initially approved, while the periodic will not normally populate until the initial periodic certification opens. These sections will populate even if the system determines that a specific certification may not be required due to country and classification type. We'll get further into the section in the next slide.

Finally, when FATCA certifications are available, there will be separate links in the available account options section to initiate the periodic and COPA certifications. Here we see a close up of the certification information section. This section will include the certification period for periodic certifications. This logs the specific dates that are covered in the current certification period. Certification status and available options for certification status are due, overdue, submitted, and not required. The due date, this due date will not change and will generally be July 1st of the due date year.

Finally, the extended due date, if the certification due date is extended for any reason, the extended due date will appear below the original due date. An example of how this may appear is that if your entity had a certification due on July 1st, 2020 that has been extended to December 15th, 2020, the due date will continue to display 07/01/2020 while the extended due date field will be populated with December 15th, 2020.

Below the certification information section, you will see a link to complete the certification in the available account options. There will be separate links for the COPA and periodic certification. And these links will continue to be displayed even after the certifications are submitted.

The certification information section can be populated as soon as the initial approval of the FI for COPA and after the first certification period for periodic certification. They will be populated even if the system determines that a certification is not required due to country and classification but entities may receive a notice stating a certification is due when they do not believe that they have a certification requirement. This is often because as discussed earlier, the IRS requires certifications based upon the classification and inter-governmental agreement of the entities, therefore the ROs must ensure the registration information is accurate at all times.

An entity may not be normally be required to certify based upon their country or classification, they may have the certification requirement based on their branches or sponsored entities.

When you click in the certification link you will normally be asked to verify your entity’s classification. Also note that the leads in some classifications may be given the opportunity to certify it as a Consolidated Compliance Group as Trevon discussed. Similarly certain registered, deemed compliant FIs may be presented an option to form an RDC collective.

Selecting Next will present the certification and determination screen where the system will present a preliminary recommendation of whether or not a certification is required based upon the classification and country and jurisdiction of the entity. Please know while this has been an issue to date, if a financial institution is required to certify per the regulations the RO will be responsible for submitting a certification, there is an option to submit a certification at the bottom of the screen even if the preliminary determination is that one is not required.

Please be sure to verify the certification type highlighted in this example and the certification period which is also highlighted are correct. There are rare circumstances where these may need to be updated. Select “no” if changes to the question set or certification are required or select yes to continue. In this case we’ll select “yes”.

Next you’ll be presented an instruction page that outlines the basic certification section. You will be given one last chance to edit your certification type if there is need. Otherwise select Next to continue. All certifications will get a version of this screen with at minimum, the RO warning message, confirmation of RO information and a description of the entity’s business or line of business. Please note that the certification must be completed by the Responsible Officer.

So, first, confirm the RO information is correct and updated and update any entity information as required. As Bob mentioned this will also update the information in the registration system so you are not going to have to re-input it.

With some certification types the RO will need to identify the type of entity. The RO will then describe the entity’s business or line of business. The question regarding mergers may be asked with certain certification types as well. Select Next to continue.

Here the RO will indicate that they are completing a periodic certification of compliance. This is the correct selection program 99 percent of the certifications that we receive. However, there are two other options which we touched upon earlier that we will discuss. They are, I am unable to complete a certification at this time and I am not required to complete a certification.

If you select “I am unable to complete a Periodic or COPA certification at this time”, be sure to include a detailed explanation of why a certification cannot be completed at this time, and when the RO will be submitting a certification. Similarly if selecting Periodic “I’m not required to complete a Periodic or COPA Certification for the Certification Period”, be sure to include a detailed explanation of why a certification is not required. These explanation fields can be up to 100, I’m sorry, up to 15,000 characters. So there’s plenty of room for a detailed explanation.

I do want to stress how important these detailed explanations are, though. A detailed explanation can be the difference between the Internal Revenue Service accepting the certification and the Internal Revenue Service asking for additional information. For example, I can honestly say that Todd, Trevon and I have read every explanation that has been submitted for entities that have selected, unable to certify or not required to certify.

Going back to the initial screen we will select, “I am completing the period certification of compliance,” with this example and select Next.

For some periodic certifications, the RO will be given initial questions to help guide them into the correct type of certification and certification questions. As Trevon discussed an entity will be submitting either a Certification of Effective Internal Controls, or a qualified certification. And while these questions seem to be deceptively simple but they are one of the most important parts of the certification as they determine not only what type of certification you will be submitting but the questions you will be answering as well.

If you choose incorrectly, you will have to go back to this screen as the system will either expect material failures or not and will not allow the RO to submit a certification without identifying the expected failures. So be sure of your answers on this screen, otherwise you will have to go back.

But let’s say that based upon your answers to the previous questions, you submit a certification of an effective internal controls. As discussed earlier most certifications of effective internal controls are between two and ten questions in length and relatively straightforward. Please read the questions carefully. One of the most common errors when submitting a Certification of Effective Internal Controls, are with the answers to “yes”, “no”, “not applicable” questions.

For example, the question at the bottom of this slide start with, with respect to any failure to withhold deposit, or report to the extent required under the FFI agreement. And if the FFI had previously indicated that they had none of these failures they would normally select “not applicable”. This is a very common error for us, so we have a detailed explanation of this and the certification FAQs we will reference later on.

Going back to the questions about event of default material failures, if the RO’s answers indicate that a qualified certification is required, the RO will be provided the appropriate questions for qualified certification. This is just a visual representation, that qualified certifications tend to be longer. Qualified certifications typically have more questions than a Certification of Effective Internal Controls, and they have up to 24 questions in several sections. So we’ll break down the certification into general types of questions.

Usually the initial questions of a certification will be basic certification questions, verifying the RO has established a compliance program, et cetera. Then the certification will present questions based on the certification type indicated earlier. In this case, we had indicated a material failure. So the system is asking questions about our material failure.

Depending on how the RO answers the questions there may be follow-up questions or a detailed response required. As you can see in this case based upon our answered question 9 the system has two follow-up questions announced for a detailed description. Most of these text boxes have a 15,000-character limit and you can cut and paste if needed.

The next section for our certification will be the questions about any events of default indicated earlier. Once again, depending on how the RO answers the questions there may be follow-up questions or detailed response required. And once again, as you can see in this case based upon our answer to question 10, the system asked for two follow-up questions and asked for a detailed explanation. And once again, these text boxes can have 15,000-character limit, and you can cut and paste if needed.

Since the explanations may get rather involved, best practice is to save the certification if it is taking a long time to complete any questions or sections, while the system will save the certification responses when the RO progresses to the next span (ph), saving periodically will prevent any responses from being lost in the event the system times out while they are responding or researching. I think we can all agree it would be frustrating to lose all progress on a detailed certification if the system times out, so do save.

When the RO has completed the certification and reviewed the responses, select the submit button to submit and finalize the certification. When submitting, the system will warn that once submitted the RO will be unable to edit the certification, select “yes” to submit. Please note, a certification is no longer available editing after it has been submitted.

The RO may complete a subsequent certification as a means of updating a previously submitted certification which will generally be treated a superseding certification. So in effect, subsequent certifications replace the one submitted previously. After submitting the certification the certification result will be displayed.

The Publication 5118 goes into detail about each of the certification results, their meanings and possible next steps. This has proven to be a good resource for many financial institutions that are curious as to what the results mean in terms of their FI. Here are the periodic results from the Publication 5118. Similarly these are the COPA results from the Publication 5118.

Next, let’s turn it over to Philip for our next polling question. Philip?

YAMALIS: Let’s do it, sir. We can do that. So here it is, audience, our fourth polling question this morning, “which of the following certification result is an option for COPA, but not for the Period Certification?”

Which of the following certification results is an option for COPA but not the period certification? Is it, A, compliance, B, due diligence, C, failure to certify, or D not required?

You know how this works by now. Take a moment. Click on the Radio Button that best answers the question. As a reminder COPA stands for Certification of Pre-Existing Accounts. We’ll go ahead and give you a few more seconds to make your selection.

OK. Let’s go ahead and stop the polling now. Again, let’s show the correct answer on the next slide. And the correct response is, B, due diligence. See how you did. Could be a technical glitch here, but I am not seeing a very good percentage of the responses.

So, Todd, you want to take a stab at giving us some clarification on this question, which of the following certification results is an option for COPA but not the periodic certification? The answer was B, due diligence. How about a little bit of a clarification on that?

ALLEN: Sure, Philip. Now I’ve got to admit I’m not terribly surprised that this question caused some issues for us because full disclosure, I occasionally have to look this one up myself. But the results for both COPA and periodic certifications are generally harmonized with this one exception. For periodic certifications a Certification of Effective Internal Controls would have a result of compliance. Whereas the COPA equivalent for a pre-existing accounts would be due diligence if no failures were indicated.

So as I said it’s something I occasionally have to look at myself so I’m not surprised that the audience is going to have trouble with this one.

YAMALIS: OK, Todd, thanks for that clarification. Why don’t we go ahead and turn it back over to you to continue on submitting the certification.

ALLEN: Thanks, Philip. After submitting the certification the system will default to the account home page where the message board will reflect the submission and the result. The certification information section will reflect “submitted” and you will have the ability to review the entity submission history on the bottom right hand side.

The certification result will be shown in both the message board and the certification history which we’ll examine in a moment. When the RO submits a certification, the system provides an automatic response via the portal informing the RO that their certification has been accepted and received by the Internal Revenue Service. As we’ll see on the next slide, the certification information section of the financial institution homepage will be updated to submitted once the certification has been submitted successfully.

Here you can see an example of the certification information section having been updated to show the submitted certification. If a certification is not submitted the status could be updated to overdue after the certification due date. When viewing a certification history the submitted by column will select the FATCA ID of the entity, if the entity submitted the certification. However, if the certification was submitted by a lead as part of the CCG the FATCA ID of the lead will be displayed here.

Please note that all of the historical versions of certifications are retained in the FI certification history section, even previous certifications that were superseded by a later filing.

The certification history will display the summary information from the submitted certifications including Certification Period, the certification type and the certification result. And the entire certification history can be reviewed by selecting the “View” option highlighted to the right. As mentioned, the “View” option will present the entire certification for review, including the entity Responsible Officer information and business description.

The section where the RO indicates that the entity is completing a certification and how the initial questions were answered regarding any material failures or events of default, if the RO indicates that they were not required or unable to certify, those answers and explanations will be recorded here as well. As you would expect, all questions of the certification itself are recorded and available for review.

Back to the Certification History Page, as discussed earlier the Certification History Page is a convenient way to review the certification result for any submitted certifications as all certifications are recorded here regardless of Certification Period, so you will be able to see certifications from previous certification periods, et cetera.

And now I want to hand it off to Bob for discussion of material failures, and certification compliance. Bob?

SIMMONS: Thanks, Todd, for that comprehensive overview of the system. That’s a lot of material to take in. We appreciate it.

I’d like to now go over the FATCA certification compliance by the IRS. There are three main points that we’ll be reviewing with regard to compliance: material failure, event of default and interim guidance. I will be handling the first two and Trevon will be taking interim guidance section of this.

The next section will not apply to most of the ROs. I want to stress that this is important that we are not actually, most people come in, the responses are due diligence, certification as completed and everything goes off quite well. However, it is important to note that if you are contacted by the IRS you need to respond. Please do not ignore requests for additional information or notices that say you need to actually provide something.

A material failure in general is a failure of the entity to fulfill the requirements of the FFI agreement, Treasury regulations, or inter-governmental agreements as applicable. If the failure was the result of a deliberate action on the part of one or more of the employees of the entity or its agents, sponsors, to avoid the entity’s FATCA requirements or was an error attributable to a failure of the entity to implement proper internal controls sufficient for the entity to meet its FATCA requirements.

A material failure will not constitute an event of default unless such material failure occurs in more than a limited circumstance when the entity has not substantially complied with its FATCA requirements.

I would like to emphasize the vast majority of entities that are required to submit a certification, complete the certification in a timely manner without material failures. So hopefully, most of this information will not apply to this audience.

In general, an event of default occurs, if an entity fails to perform material obligations required with respect to the due diligence, verification, withholding or reporting FATCA requirements or if the IRS determines that the entity has failed to substantially comply with its FATCA requirements.

After the deadline for submitting the FATCA certifications, the IRS will review the list of entities that have been identified as requiring a FATCA certification for the certification period. This will include identifying event of default for which a Notice of Default or eventually a Notice of Termination will need to be issued.

The IRS will post the event of default notice to the entity’s message board where applicable for both the COPA and periodic certifications. As such, if an entity fails to submit both of the required certifications, they will receive two separate notices and then each be posted to the message board. Like all messages posted to the entity’s message board, the RO will receive an email indicating that they have a new message on their message board.

If an, if an RO fails to complete and submit the required FATCA certification by the due date, this is the equivalent of not filing. When the RO receives the notice, they must go to the system and complete a certification. It may fall onto one of the other categories like not required or needs additional time to submit it, unable to submit at this time. Note, with the IRS in general, it’s always better to file late than to not file at all.

So if you realized you did not file your certification by July 1st and it’s now September, even though the due date is now past, best course of action is to go in and complete a certification and submit it late. Indicating that they were unable to complete – submit a required certification, the IRS will review the explanation as to why the RO was not able to submit the certification.

I can not stress enough in cases of default where the IRS wants to work with you and get these things straightened out. So when we do reach out, it is important that you get back to us timely. We really want to get things straightened out. We’re not here to actually, we’re here to work with you and help everyone get back on the path they need to be on at that point.

If an RO indicates they are not required to submit a certification contrary to the requirement indicated by the FATCA classification on tax residence or the registration of any branches or sponsored entities, they need to complete and submit a certification that had a fail, failures to certify result.

After the deadline for submitting the FATCA certifications, the IRS will begin reviewing the certifications on entities that have been identified as requiring a certification for the certification period. The review will include identifying events of default for which a notice of default will be issued and the IRS will post separate notices where applicable.

So if you get two separate notices, you need to respond to each notice. That’s important. The event of default for entities that are identified as having event of default, the IRS will issue the notice of default and will specify the event of default, for example, failing to submit a required certification, and request that the entity remediate the event of default within a time period, say 60 days.

So you will get a notice that will tell you what the issue is, failure to submit, and then giving you so many days to correct it. And then the notice of default will also include a means by which the RO may contact the IRS with any questions about the notice or how to remediate it. With that, I'm going to turn it back over to Phil. I think we have our final polling question of the day.

YAMALIS: Bob, you got that right. We have our final and our last polling question. So I’ll ask you to turn your microphone on mute and I’ll ask the question. The question here as it appears on the slide said, which of the following events can trigger an event of default?

Is it A, failure to respond to requests form the IRS for additional information; B, failure to certify; C, failure to submit a complete and accurate certification; or is it D, all of the above? Take a moment. You all know how this works by now. Please click on the Radio Button that best answers the question, which of the following events can trigger an event of default? I’ll give you just a few more seconds to make your selection.

OK. Let’s go ahead and stop the polling now. And let’s go ahead and share the correct answer on the next slide. OK. There it is. The correct answer is D, all of the above. Let’s see how we did this time. I have a feeling that we did pretty well. Well, there it is. Ninety-five percent of our audience responded correctly. I call that an A in my book. Good job, folks. Thanks for your attentiveness. That was a very comprehensive example. So thank you for paying attention. So, Bob, let me go ahead and turn it over to you. That was our final polling question. So go ahead and take it away.

SIMMONS: Yes, thank you, Phil. Like Phil just said, that was our final polling question of the day. The important part I would like to stress even with everyone getting the question right is that if you get an action, that you need to go ahead and take corrective action as soon as possible. Now, I would like to turn things back over to my colleague, Trevon, to provide an overview of interim guidance. Over to you, Trevon.

SINGH: Thanks, Bob. So I know we’ve repeated this a few times, but I do want to emphasize what Bob was discussing with the Event of Default Notices. As we mentioned the IRS is trying to work with you in the event you do have an event of default notice. One of the common ones we mentioned is that you could receive an EOD for failure to complete and submit a certification, and it could be for either the COPA, the periodic, or both.

So just as a reminder, if you do receive an EOD for failure to file and you’re trying to remediate, please ensure that you’re submitting all of the applicable information that’s required whether it’s COPA and/or periodic. In some instances, both certifications were not submitted and you will need to submit both.

So in regards to reconsideration, if an EOD is received related to FATCA certifications, the RO can request a reconsideration of that notice of event of default by submitting a request in writing either by email or mail with a full, fully, full detailed explanation, explaining why a reconsideration is being requested.

The request for the reconsideration has to be submitted before the IRS issues any potential notice of termination. If the notice of termination was received, the RO can appeal that notice of termination also in writing either by email or mail within 90 days of issuance of that notice of termination.

The address for both the reconsideration or the appeals request can be, that would be the, I'm sorry, the mailing address would be included in the event of default notice as well as the email address within the FATCA registration message board. Hopefully, it doesn’t get to the point where an RO gets or receives multiple EODs from the IRS, but if it does happen, they can submit the reconsideration of the appeals and we do encourage the RO to be as detailed as possible in the explanation because we are reading the explanations and we’re reaching out where we need additional information. This is going to help with the IRS following up with the RO and with follow-ups with inquiries from the IRS as well.

In regards to the interim guidance, the interim guidance specifically under procedures for FATCA certification event of default notice was issued earlier this year in April. And it outlines procedures for identifying non-compliance with the FATCA certification requirements.

The guidance basically outlines the FATCA certification requirements and process. It outlines event of default, Event of Default Notices and terminations, and also the process for requesting reinstatement of the entity’s FATCA registration and its GIIN post-termination if it comes to that.

You can use the link on the bottom of the screen. That’s, we have a copy of the interim guidance published and it gets into some of the details we discussed today such as event of default, reconsideration, and notice termination. And with that, I think I'm turning it over to Todd one last time.

ALLEN: Thanks, Trevon. As all of you are aware, 2020 has presented unique challenges. As Bob mentioned earlier in response to disruptions related to the COVID-19 virus, the IRS has granted an automatic extension of time to submit a FATCA certification for an entity with a certification due date of July 1st of 2020.

FATCA certifications that were due on July 1st, 2020 are extended until December 15th of 2020 without the need to file an extension request with the Internal Revenue Service. There is no action that will be required by the FFI to be secured this extension. The new date will automatically appear on the FATCA registration system in the certification information section discussed earlier. The impacted accounts should already reflect these days.

As mentioned earlier, we have created a list of resources that may help Responsible Officers with their fast compliance, including links to the FFI agreement, the regulations and the revenue procedures themselves. Rather than read through all of them, we’ve included a separate file with direct links to these resources.

The ones that we wanted to call out are the Publication 5118 and FATCA certification questions, the link to FATCA registration system and the link to the FAQs, the FATCA regulations and the FFI agreement itself. All of these are listed on the attached resource document with their respective links. So I think that you will find that it’s pretty helpful.

Philip’s consumed way too much time with these polling questions, so I know that he is looking forward of putting us to the, on the spot with your questions. With that, I'm going to turn it over to Philip for the Q&A.

YAMALIS: Thank you, Todd. I appreciate that. So once again, folks, it’s me, Philip Yamalis. I’ll be moderating the question and answer session. Before we begin the session, I do want to thank everyone for attending today’s presentation, FATCA Responsible Officer Certifications of Compliance.

Earlier, I mentioned that we want to know what questions you have for our presenters. So please, here is your opportunity if you haven't done so. If you haven't input your question yet, there is still some time. So go ahead, click on the dropdown arrow next to the Ask Question field, type in your question and select send. Again, remember, we want no specific taxpayer information when you submit your question to us.

So Todd, Bob, Trevon, they’re staying on to answer your questions. One thing before we start we may not have enough time to answer all the questions submitted. However, let me assure you that we will answer as many as time allows. So if you’re participating to earn a certificate and related Continuing Education Credits, somebody that – something that everybody cares about. You’ll qualify for one credit by participating for at least 50 minutes from the official start time of the webinar. You’ll qualify for two credits by participating for at least 100 minutes from the official start time of the webinar.

Now, what do I mean about official start time of the webinar? That means the first few minutes of chatting before the top of the hour when we started. That first few minutes of chatting does not count towards that 50 or 100 minutes. So with that, let’s get started so we can get to as many questions as possible. See these questions coming in here. Having some difficulty seeing them so give me a second here. There they are. OK.

So let’s see, I see a question here. Do I need to submit a COPA and a periodic certification at the same time every three years? Bob, why don’t I turn that over to you, because you seem to speak about that a lot today? Do I need to submit a COPA and a periodic certification at the same time every three years?

SIMMONS: In this case, no. You do need to submit a periodic every three years, but COPA is a one-time only certification. So in the first time, you’re actually required to submit a certification, you’re required to submit two. One, the COPA is what I mainly spoke about and then the second one, the periodic which Trevon spoke about. Then that point forward, you would not have to submit a COPA anymore since the one time it would be completed and you’d be done with it. Thanks, Phil.

YAMALIS: One time. OK. And once again, the COPA is the Certification of Preexisting Accounts. So, and, Trevon, since Bob put you on the spot, I'm going to go ahead and turn it over to you for this next question. It says what if I want to complete the CGG certification? If I remember correctly, that’s the Consolidated Compliance Group certification. As a compliance FI, but my members are not due yet. Trevon?

SINGH: Sure. So basically, if you’re trying, if the lead’s trying to submit a CCG certification for its members, I think that’s why this is like a very useful certification also. The members don’t have to have the same due date as the lead. What this does is if you, you’re a lead and you’re doing a CCG certification, your members will show up, all of your members, and you get to select which members you want to certify on behalf of, regardless of their due date.

When you do submit that certification, it’s actually going to harmonize the due date. So future periods are the members that had different due dates are now going to line up to the lead. So it still is possible to submit one certification under the CCG for both the lead and the members even if they don’t have the same due dates.

YAMALIS: And that’s why indeed it is a consolidated group as opposed to just an individual one, so excellent. Makes sense to me.

Right. Right. All right. Let’s take a look at this next question. We’re getting through these pretty quickly. It says my certification link for the COPA is available, but I don’t see the link for the periodic certification. Why might that be? Want to take that, Trevon?

SINGH: So we’ve had some inquiries on this before. Typically, what we’ve seen is if you’re seeing one link and not the other, it’s because the COPA can be submitted initially upon registering and receiving an approved GIIN because what you’re doing is you’re certifying your due diligence on your preexisting account. So it just may mean your periodic is not due yet. So hypothetically...

YAMALIS: OK.

SINGH: So hypothetically, if you registered let’s say today, your COPA can be submitted right away, but your certification link for the periodic won't open up until a few years down the line.

YAMALIS: All right. Makes sense to me. Could appreciate that. All right. Todd, let me turn it back over to you for question. Give you a shot, an opportunity here. Let’s see, RO, that’s Responsible Officer, if I remember correctly. The Responsible Officer is no longer employed with us. So can anyone from the organization submit the certification? Todd, do you want to give that a shot?

ALLEN: Sure, I’ll give it a shot. So this is sort of two questions in one. So first, let’s address the updating Responsible Officer information with the new information. As we stressed double time throughout this presentation, this is a pretty important step. This can be accomplished two ways. It can be accomplished by selecting the edit registration section link in the available account options on the home page which will allow you to review the whole registration.

The other that this can be accomplished is by submit – starting the certification and updating it in that first section that we talked about where you’re putting information about the RO and the entity’s line of business, et cetera. Once this information has been updated, the RO can complete the certification as appropriate and as we’ve mentioned a couple times, the certification must be completed by the current Responsible Officer.

YAMALIS: All right. So we got to get that RO information updated first before the RO could submit the certification is what I'm hearing.

ALLEN (ph): Right.

YAMALIS: So, Bob, thank you, Todd,, for that. Bob, let me take this next question over to you. Our audience member states that I registered in December of 2019, so what then is the exact due date for my periodic certification? He registered in 2019 December.

SIMMONS: Yes. Yes, in this case, we look at your effective date, so when the certification is actually due, the periodic certification. So in this case, if you registered in December 2019, the effective date would be essentially December 19, 2019 and your due date would be July 1st, 2023. So to give you an idea, the first full year would be 2020, rough year and then ’21 which is going to get a lot better, and then ’22 …

YAMALIS: Let’s hope so.

SIMMONS: is going to be even better.

YAMALIS: Let’s hope so. All right.

SIMMONS: OK. So now, we have those as our three full year. So both your Periodic and your COPA will be due July 1st, 2023.

YAMALIS: ’23.

SIMMONS: And at this point, the next one would be July 1st, 2026. And that would just be a Periodic because now, you completed your one-time COPA, you’re no longer required to complete COPAs any longer and we just move into a Periodic. So those are your due dates that you have to watch out for.

Another important thing is when you look at a Periodic, as I mentioned earlier, usually your link won’t appear until the period is over. So if your Periodic is due July 1st, 2023, usually your link will apply – or appear on your homepage say, January, February of 2023.

Because the period, before you can actually certify for it, the period has had to have fully expired. And so in that case, we – it wouldn’t appear before the end of 2023.

YAMALIS: Thanks so much.

SIMMONS: So it’s bit of a long answer. But hopefully …

YAMALIS: No, but you drove it home for us. You drove it home for us.

SIMMONS: OK.

YAMALIS: Thank you so much. Great. All right. So here’s another question coming in. I think based on your presentation in the webinar, I’m going to turn this one over to Trevon. Trevon, it says here, “I have no US customers and I make no payments from the accounts. Do I still need to submit a certification to you?”

SINGH: So if the entity has a GIIN and the system’s recommending a FATCA certification, the entity would have to submit a FATCA certification regardless of its account pipes. So the fact that it had no account activity or no US sourced income or no US account or even report of activity, doesn’t exempt it from a FATCA certification because it still could have those activities in the future. It would have to submit the optical FATCA certification.

YAMALIS: OK. Very good. Thank you, Trevon. All right, Todd. Here’s one for you. Back to you. “We submitted a certification and we realized that we made some mistakes when we submitted it. How can I fix this? What can we do?”

ALLEN: OK. Well first of all, do not panic. We actually saw more infused file, multiple or superseding certification than we expected.

YAMALIS: Todd, I’m going to ask you to bring your microphone just a little closer to your mouth there so we can hear you.

ALLEN: Thank you. Any better now?

YAMALIS: A little better. Go ahead.

ALLEN: All right. So when we looked at these, we often found that the entities appear to have misread one or more of the questions and updated their answers. Since the questions tend to be from the regulations, the wording can be a little bit confusing. Sort of like the “Yes”, “No”, “Not Applicable” example I mentioned earlier.

We do address correcting certifications in the FA tier and we advise that you may submit additional certifications with the corrected information doing exactly the same thing you did to submit the original certification.

Sometimes, depending on what you’re changing, some of the answers may be prepopulated and in which case, you can just go ahead and update the ones that you need, that needs corrected. After the, I do want to stress again that for the most part, these certifications are considered superseding certifications so it will replace the previous certification. Hopefully that answers the question.

YAMALIS: It does. Thank you. All right, gentlemen, remind me. What is an EOD notice? Bob. Bob, EOD notice. And I received an EOD notice and I’m not sure what to do. First of all, what does EOD stand for and go ahead and tell us what we’re supposed to do once we receive that notice.

SIMMONS: Sure. It’s an Event of Default.

YAMALIS: Event of Default.

SIMMONS: So an Event of Default could be something like you did not file, for example, a certification and the one was due. So in this case, each Event of Default letters will be sent to you through the Registration portal and will appear as a message on your message board.

So it’s important that when you get an email saying you have a new message, you need to go there and check to see what the message is. And then the notice will explain what the Event of Default is. And the example I just gave is you failed to file a certification which was due on July 1st, it’s notified you, “Please collect it in so many days.” It’ll give you the days, it’ll give you where to call it in, what to do. In this case, it’s important to respond to all of these notices so that we can work with you and get you straightened out. And if you received a notice for COPA and one for Periodic, you have to respond to each one separately.

And the thing might just be as simple as, “Hey, I didn’t know I was required to certification. I sort of missed that. So maybe I can just go in and file my certification.” And that would be very helpful because when you file a certification, it’s due diligence now. You are equivalent of non-filer. It’s sort of like being notified that you didn’t file something. Well, go ahead and file.

Even though you filed it late, I mean, that’s very helpful still. So I would ensure everybody to read the notice and respond. Now, if you’re not sure what to do, then you're going to have to reach out to us and see what the issue is or maybe just provide some additional documentation.

It might be that the explanation you provided, we need more information on that. Maybe it is a good reason whatever happened that you’re not required to certify. Maybe you actually went in and said, “Not required to certify” but your explanation does need a little more information for us to accept that as a reason.

So the main thing is, let’s get that responded to and let’s get this straightened out to get everybody back where they need to be.

YAMALIS: Excellent. So the EOD notice is almost like a wakeup call. “We’re not here to bang you over the head but at the same time, reach out to us, follow the instructions on the notice so that we can help you resolve it,” is what I’m hearing you say.

SIMMONS: Yes. And if you don’t respond to us, we’re going to sort of increase the pressure and we’re going to send another Event of Default. So I mean, it’s important not to ignore us and we will not be ignoring the operation. That’s another thing I’d like to point out. We’re willing to work with you but you have to come in and contact us.

YAMALIS: OK. So bottom line, don’t ignore us. I liked you say that the IRS will put on the pressure. You say that so gently. Todd, let me turn the next question back over to you. Thank you, Bob. Todd, it says here, “I’m not getting emails from the Internal Revenue Service but I do have messages on the message board. What’s up with that?”

ALLEN: OK. Well, there’s a couple of things to address in this question. So first and foremost, verify that the RO information, specifically the email of the RO is correct. And let’s also address a couple of the other questions I was coming in here as well because one of the questions was if who at all receives these emails.

In this case, it’s only the Responsible Officer. The points of contact do not receive emails notifying them of the message board messages. So the second part of this, and we also received some questions on this, is that you will – that you do want to check your Spam folder in email. And a best practice is go ahead and whitelist the email that the Internal Revenue Services are using to send these notifications out which is Fatcadonotreply@irs.gov.

And the Publication 5118 does go into the basics of their email address being used and which one would have to be whitelisted in order to receive it. So I’m definite that answers the question.

YAMALIS: Yes. Well bottom line, if you’re not getting the emails, there’s things that you can check but that message board is the reason we have it there just in case that does that occur we’re not getting emails. So the message board is very, very important as well.

So Trevon, let me turn it over to you for this next question. It says, “I submitted my certification, but yet, I keep getting a result of “Failure to Certify” when I am in compliance with the FATCA requirements.”

Help me out, Trevon.

SINGH: If you’re getting the “Failure to Certify” result, typically that means that one of the responses to the questions you indicate a “failure to comply” at the FATCA requirements. What I would say is that if the RO believes that they complied with all of the FATCA requirements, I would go back again and review the certification.

Based on our experience, we review the “Failure to Certify” results and what we see based on our review and reaching out to some of the FIs it that sometimes it’s an answer that was put in erroneously to some of the questions. And typically, that tends to happen with some of the “Yes”, “No”, “Not Applicable” question because not all the answer choices are “Not Applicable”, some of them had “Yes”, “No” options only. But there are some questions that give you three Radio Buttons which are “Yes” “No” “Not Applicable” and they do have an FAQ on this.

So we encourage all those to read all of the questions in its entirety and definitely weigh the options of “Yes” “No” “Not Applicable”.

YAMALIS: Excellent. Thank you, Trevon. And Bob, I’m going to, I think I have time for one more question. If you can answer this in 25 seconds or less.

SIMMONS: OK. Yes.

YAMALIS: It says, “I am unsure if I need to complete a certification. I can’t log in to my account.” Can you handle that in less than 25 seconds?

SIMMONS: I’ll do my best, very quickly. If you have two separate issues here, the first is “I can’t log in to my account.” You need to get that straightened out in order to determine whether you need to complete a certification.

YAMALIS: Right.

SIMMONS: So in this case, what you would do is go in and hopefully reach that by going through, without actually contacting anyone. They might ask you some questions or so on, get yourself reset and access to it. Sorry, that’s all the time I had.

And the next is, you got to go in and look if you have the certification link. If you have a link, it will possibly look, at that point, we’re looking for a certification from you so that’s sort of the best way to go about it. So…

YAMALIS: Thank you, Bob.

SIMMONS: I could have gone…

YAMALIS: Thank you. Because …

SIMMONS: on that too.

YAMALIS: I know you can. I know you can but my producers here are waving the red flag. So audience, I’m afraid that’s all the time we have for questions right now. I really want to thank Todd Allen, Trevon Singh, and Bob Simmons.

Excellent, excellent source of information for us. For sharing their knowledge, for sharing their expertise and of course, for answering many of your questions today.

Before we close the Q&A session, I’m going to ask Todd Allen (ph) to remind us. What key points do you want us as attendees to remember to take home from today’s webinar, Todd?

ALLEN (ph): Thanks, Philip. First of all, I wanted to thank everyone for attending today. But there are several things we wanted to stress throughout this discussion on FATCA certification. The first is that the FATCA Registration System must always be updated with the current name and email address of the Responsible Officers as soon as there is a change.

The ROs and Point of Contacts provide the IRS with the name and contact information of people who they will – we will communicate with for reasons such as the – any inquiry, account inquiries or compliance purposes, et cetera.

The next thing we want to stress is that message board messages are being utilized for entity’s specific request in communications. This is of recent change in the last year and a half or so and this is the primary means of communicating with the individual FIs in the FATCA program.

Next, that the Registration System will suggest that certification questions that based upon the entity’s classification and country of residence/jurisdiction. The questions that will be presented are available for review on the IRS website and this link is included in the Resources document.

Next, we want to stress that it’s important the entity’s certification will be as complete and accurate as possible. This is especially important with the description and explanation field. The more comprehensive and detailed the explanations, the less likely the IRS will need to contact you for additional information.

Next is it’s important to ensure the ROs submit the certification timely to avoid an Event of Default Notice pertaining to failure to submit a certification and to ensure that both certifications, the COPA and the Periodic certifications are submitted as applicable. We have quite a few entities that received a Notice of Failure to Submit when they only submitted one type of certification when they were required to do both.

And finally, once you complete and submit the certification, one of four certification results will be provided. The IRS may reach out to you for additional information as needed and ensure you respond any IRS inquiries in the timely manner.

And with that, we’ll turn it over to Philip one last time for a wrap-up.

YAMALIS: Thank you, Todd. And thank you, Bob and Trevon for definitely and indeed an awesome webinar. Audience, we’re planning additional webinars throughout the year. Again, to register for an upcoming webinar, please visit IRS.gov, keyword search “webinars” and select the Webinars for Tax Practitioners or Webinars for Small Businesses.

When appropriate, we will be offering certificates and CE credits for upcoming webinars. Gentlemen, please put your phones on mute or your microphones on mute so we can continue here.

So we invite you to visit our Video Portal at www.irsvideos.gov [IRS Video Portal is not available, please refer to IRS.gov]. There, you can archive versions of our webinars. Again, Continuing Education Credits or Certificates of Completion are not offered if you view a recorded or an archive version of any of our webinars on the IRS Video Portal [IRS Video Portal is not available, please refer to IRS.gov], OK?

Again, a big thank you to Todd, to Bob, to Trevon for a great webinar, for sharing their expertise with us and for staying on to, of course, answer your questions. I also want to thank you, our attendees, for attending today’s webinar.

Now, this is always very important. You’re always asking us about this. So let me remind you if you attended today’s webinar for at least 50 minutes from the official start time of the webinar, you’re qualified for one possible CE credit. If you attended for at least 100 minutes from the official start time, you’re qualifying for two possible CE credits.

Again, the time we spent chatting before the webinar started before the top of the hour doesn’t count for that 50 or 100 minutes.

Ladies and gentlemen, if you’re eligible for Continuing Education from the Internal Revenue Service and you registered today with your valid PTIN number, your credit will be posted automatically in your PTIN account.

If you’re eligible for Continuing Education from the California Tax Education Council, your credit will be posted to your CTEC account as well.

Also, if you registered through the Florida Institute of CPAs, your participation information will be provided directly to them.

Some of you ask, “When will I know this happen?” Now, if you qualify, you’ve not received your certificate and/or credit from us by October 13th, please email us at CL.SL.Web.Conference.Team@irs.gov.

I’m not going to repeat that because an email address I see right now is shown on the slide as well.

If you’re interested in finding out who your local Stakeholder Liaison is, just reach out too for information. You may send us an email using the address shown on this slide and we’ll send you that information as well.

Now, we ask that you please and we would appreciate it if you would take a few minutes to complete a short evaluation before you exit. These evaluations are very, very important to us. If you’d like to have more sessions like this one, you need to let us know. So if you have thoughts on how we can make them better, please let us know that as well because we really, really review that information.

If you have a request for future webinar topics or pertinent information that you’d like to see in an IRS Fact Sheet, Tax Tip or Frequently Asked Questions on IRS.gov, please include that suggestion in the comment section of the survey.

Ladies and gentlemen, it has indeed been a pleasure to be here with you today. On behalf of the Internal Revenue Service and our presenters, we would like to thank you for attending today’s webinar. It’s important for the IRS to stay connected with the tax professional community, with individual taxpayers, industry, associations along with federal state, local, and international government organizations. You make our job indeed a lot easier by sharing the correct information that allows for proper tax reporting.

So thanks again for your time today, for your attendance. We wish you much success in your business and practice. You may exit the webinar at this time.