On May 2, the Internal Revenue Service issued a notice (Notice 2014-33) providing for a transition period for enforcing the withholding rules of the Foreign Account Tax Compliance Act (FATCA) and extending the period by which investment funds need to have FATCA procedures in place for entity investors. Pursuant to the notice:
Years 2014 and 2015 will be regarded as a transition period for purposes of IRS enforcement and administration with respect to the implementation of FATCA; and
With respect to entity investors, investment funds generally do not need to have their FATCA procedures for “new clients” in place prior to January 1, 2015. Such entity investors may be treated as existing investors for due diligence purposes. This extension does not apply to individual investors.