IRS Releases Proposed New QI Agreement
Some changes are coming for financial institutions that have an agreement with the US Internal Revenue Service (IRS) to serve as a qualified intermediary (QI) in respect of certain withholdable payments, which are generally US source income. On 1 July 2016, the IRS proposed the terms of the new Qualified Intermediary agreement (QIA) in its Notice 2016-42.
The IRS has requested comments to the proposed new QIA by 31 August 2016. Once finalized, the new QIA will be effective with respect to all QIs on or after 1 January 2017, following the expiration of the current QIA at the end of 2016. The new QIA will expire with respect to QIs at the end of the third full calendar year it is in effect.