Third Party Data Repositories

SIFMA submitted comments to the Internal Revenue Service (IRS), requesting guidance on the process for a withholding agent to obtain tax documentation required under Chapters 3 and 4 of Subtitle A of the Internal Revenue Code from a data repository. SIFMA also submitted a proposed solution.

The lack of specific guidance in this area is creating significant hardships and customer relationship concerns for SIFMA members, and SIFMA believes it is in the government’s interest and in the interest of sound tax administration to dispel uncertainty by issuing such guidance.

SIFMA recommends the IRS issue an FAQ or other guidance confirming that a withholding agent may treat such tax documents  as being “scanned and received electronically” within the meaning of §1.1441-1(e)(4)(iv)(C). SIFMA does not believe its proposal requires a change in existing regulations.