Rev. Proc. 2017-15 follows the 2016-42 communication, published in July 2016, which contains a proposed IQ agreement (2016 Proposed IQ Agreement) containing provisions that contain conditions and requirements for QDD. The IRS has sought and received numerous stakeholder advice on the 2016 IQ agreement. The 2017 qi agreement (including QDD provisions) responds to some of these observations and implements the guidelines presented in The 2016-76 Communication, which have delayed many of the section 871 (m) code provisions. For more information on Notice 2016-76, see our insight: IRS note in accordance with Section 871 (m) and qualified derivatives trading regime. To the extent that an IQ finds that it is an intermediary with respect to a securities loan or buy-re-transaction contract, that is, a type of code. Transaction 871 (m) is not treated as agreed by IQ as capital and, therefore, these transactions are not treated in the same way as that entered into by IQ in its QDD capacity. The 2017 IQ agreement is for QIs who are qualified stockbrokers during 2017, since taxpayers can count on the rules of the LQS in 2017 in Communication 2010-46, I.R.B 2010-24, 757. A number of significant changes to the 2017 IQ agreement relate to QDDs. For example, the 2017 IQ agreement: many of the changes made to the 2014 IQ agreement in Rev.
Proc. 2014-39, 2014-29, 150, reflect the inclusion of QDD provisions in the final 2017 IQ agreement. The S-Codes published at 9734 Regulations 871 (m) relate to the treatment of dividend equivalents from U.S. sources. Subsequently, The 2016-42 communication, I.R.B 2016-29, 67, published a proposal for a qi agreement outlining the requirements and obligations of the CDDs. In the 2016-76 communication, I.R.B 2016-51, 834, the IRS provided guidance for compliance with dividend equivalency rules in 2017 and 2018. The 2017 IQ agreement changes the compliance requirements of an IQ, including a QDD, and frees up the requirement to make a sub-position projection in the event of an error or error. In addition, sampling methods are reintroduced to verify compliance with rules and reports. For an entity that is both IQ and QDD, compliance requirements remain intertwined. The 2017 qi agreement maintains some important requirements, including: (i) a company has only one responsible representative (RO), (ii) a company has a certification of internal controls, which depends on both qi and QDD compliance; and (iii) that the periodic audit year be the same for IQ and QDD activities. In addition, QDDs will be relieved of the certification of internal controls and the regular verification obligation for 2017. The 2017 qi agreement also provides for IQs that use the third year of the certification period for regular examination, an additional six months to establish certification.
In such cases, certification is due on December 31 of the year following the end of the certification period (for example. B December 31, 2018 for a certification period until December 31, 2017). In addition to the new FFI agreement, which was concluded in Rev. Proc. Published in 2017-16, the IRS also released the highly anticipated final agreement on qi in Rev. Proc. 2017-15. The final agreement on IQ essentially reflects the proposed agreement, established in the 2016-42 communication, published last year to replace the old qi agreement in the Rev. 2014-39.
The old IQ agreement expired on December 31, 2016, meaning that companies with old IQ agreements, which are in effect on December 31, 2016, must renew their contracts until March 31, 2017 and that companies wishing to become new Qi companies as of January 1, 2017 will have to comply with new requirements.