Key Takeaways:
- FATCA certifications for the period ending Dec 31, 2024, must be submitted by July 1, 2025, to support compliance and avoid penalties.
- Entities that do not certify risk FATCA status revocation, removal from the FFI List, and potential withholding on payments.
- The IRS FATCA registration system now requires users to log in via IRS-approved credential services like Login.gov or ID.me.
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Breaking Down FATCA Certification Requirements
The Foreign Account Tax Compliance Act (FATCA) requires foreign financial institutions (FFIs) and certain non-financial foreign entities (NFFEs) to report U.S. account holders’ foreign assets or face potential withholding on payments.
If your entity is required to certify, you must submit your FATCA Responsible Officer certifications by July 1, 2025, for the certification period ending December 31, 2024. You don’t want to miss the deadline—doing so can lead to FATCA status revocation, removal from the FFI List, and withholding penalties.
What’s New for You in 2025?
The IRS FATCA registration system now requires its users to sign in through one of the IRS’s credentialed service providers: Login.gov or ID.me. Your entity should have the necessary credentials in place before completing its certifications.
Types of FATCA Certifications
There are two main components that make up FATCA certification:
- Certification of Preexisting Accounts – This confirms your compliance with identifying and documenting preexisting accounts at the time of initial registration.
- Periodic Certification – This verifies your continued compliance with FATCA obligations for each three-year certification period.
You have until the July 1 deadline to submit both types of certifications, following the third full calendar year after the entity registered and received its Global Intermediary Identification Number (GIIN). Each subsequent certification period occurs every three years.
Consequences of Your Noncompliance
If you fail to submit your FATCA certifications by the July 1, 2025, deadline, you may face serious consequences for your entities subject to these requirements. One of the most significant of these risks is the revocation of FATCA status, which results in the removal of your entity’s Global Intermediary Identification Number (GIIN) from the FFI List. This removal can disrupt financial operations, impact your relationships with counterparties, and create additional regulatory challenges for you to navigate.
If your entity is noncompliant, you may also face withholding taxes on certain U.S.-sourced payments, which can lead to financial losses and administrative burdens. Additionally, the IRS may issue default notices, signaling compliance failures and initiating steps toward FATCA registration termination. If you don’t take corrective action or appeal the IRS’s decision, the termination process moves forward, and the entity loses its FATCA-compliant status. Once removed from the FFI List, you could find it difficult to conduct business with U.S. financial institutions and counterparties that require FATCA compliance.
It’s important to maintain your compliance with FATCA deadlines — it helps reduce risks, financial penalties, and disruptions to business operations.
MGO’s Approach to FATCA Compliance
FATCA certification involves detailed reporting and strict deadlines, making compliance a critical responsibility for affected entities. Noncompliance may result in penalties, FATCA status revocation, and potential disruptions to financial operations. Our team provides you with strategic guidance to help organizations meet FATCA obligations efficiently and minimize compliance risks.
MGO supports clients by:
- Managing FATCA Certification Submissions – Assisting with the accurate and timely submission of required certifications to maintain compliance.
- Facilitating Secure System Access – Helping entities set up and manage Login.gov or ID.me credentials for FATCA registration system access.
- Assessing Compliance Requirements – Reviewing obligations to identify potential issues and prevent penalties or FATCA status revocation.
- Addressing IRS Notices – Providing support in responding to IRS inquiries, resolving compliance issues, and mitigating risks associated with noncompliance.
Meeting the FATCA Deadline
With the July 1 certification deadline approaching, organizations must take proactive steps to fulfill their obligations. MGO provides the insights and support necessary to help organizations comply with FATCA requirements, address risks, and maintain good standing with regulatory authorities. Contact us to learn more.