How FATCA Account Information Is Reported

Under FATCA, foreign financial institutions report the information carried on Form 8966. The published Model 1 and Model 2 arrangements describe how U.S.-related account information is routed.

Foreign financial institutions and FATCA

FATCA reporting involves foreign financial institutions that register with and agree to report to the IRS certain information about accounts owned by U.S. taxpayers. This registration and agreement are part of how FFIs comply with requirements tied to a 30 percent withholding rate on certain U.S. source payments.^[3]

The reported accounts can include accounts owned by U.S. taxpayers and accounts of foreign entities with substantial U.S. ownership. FFIs use Form 8966, the FATCA Report, for this account information.^[3]

Certain FFIs may elect reporting rules that parallel those for U.S. financial institutions. In that case, the institution files the appropriate Form 1099 series return in place of Form 8966.^[3]

For a U.S. citizen reading about these rules, the key distinction is the reporting route. An agreement may have an FFI report to the IRS directly, or send account information through its host country's tax authority.^[3]

Information on Form 8966

Form 8966 carries identifying and account-level information about covered U.S. persons. The listed fields include an account holder's name, address, and taxpayer identification number, along with the account number and its balance or value.^[3]

The form also carries gross receipts and gross withdrawals or payments from the account. These fields describe account activity in addition to the account holder and account identifiers.^[3]

FATCA reporting covers certain account information about U.S. taxpayers and accounts of foreign entities with substantial U.S. ownership, so it is not limited to accounts held directly in an individual's name.^[3]

Account holder name, address, and TIN for each U.S. person account holder.^[3]
The account number and account balance or value.^[3]
Gross receipts and gross withdrawals or payments from the account.^[3]

Annual filing and reporting routes

A participating foreign financial institution meets one reporting requirement by electronically filing Form 8966 with the IRS each year.

Under a Model 1 IGA, an FFI sends U.S.-related account information to its host-country tax authority. That authority then exchanges the information with the IRS under the agreement.^[3]

The Cayman Islands Model 1B agreement is one example of this sequence. Cayman financial institutions report information about U.S. account holders to the Cayman Islands Tax Information Authority, which relays it to the IRS.^[1]

A Model 2 IGA uses a direct reporting route. The FFI follows its agreement with the IRS and reports U.S.-related account information directly to that agency, consistent with FATCA rules and the applicable Model 2 agreement.^[3]

Under the Model 1 route, the partner government collects and exchanges specified information, including U.S. account holder names. Under Model 2, foreign financial institutions supply specified FATCA information directly to the IRS, and the partner government cooperates to address legal impediments to that reporting.^[2]

Questions and answers

What does Form 8966 report?

Form 8966 reports identifying details for U.S. person account holders, including name, address, and TIN. It also carries the account number, balance or value, and gross receipts and withdrawals or payments.^[3]

Is Form 8966 filed every year?

Yes. A participating foreign financial institution meets one of its reporting requirements by filing Form 8966 electronically with the IRS each year.^[3]

How does a Model 1 IGA route account information?

An FFI reports U.S.-related account information to its host-country tax authority. The authority then exchanges that information with the IRS in accordance with the IGA.^[3]

How does a Model 2 IGA route account information?

Under Model 2, an FFI reports U.S.-related account information directly to the IRS. The reporting follows the FFI agreement, FATCA regulations, and the applicable Model 2 IGA.^[3]

What is the Cayman Islands example of Model 1B reporting?

Under the Cayman Islands Model 1B agreement, Cayman financial institutions report information to the Cayman Islands Tax Information Authority. The authority then relays it to the IRS.^[1]

Related glossary terms

FATCA: FATCA requires certain U.S. taxpayers to report foreign assets and financial institutions to report accounts to the IRS. Form 8938 may apply at thresholds.
Intergovernmental agreement: An intergovernmental agreement appears in FATCA rules for foreign financial institutions. Form 8938 instructions also use the term for certain foreign accounts.