IRS updates IDES Technical Frequently Asked Questions

On 10 August 2016, the Internal Revenue Service (“IRS”) announced updates to the IDES technical FAQs (Link). The changes include the following additions and updates:


A18.  In the case of a Model 1 Option 2 (M1O2) arrangement, will a FATCA report filed by a Direct Reporting NFFE via IDES be routed directly to the US IRS or it requires HCTA’s approval before it gets onward forwarded to the US IRS?

A Direct Reporting Non-Financial Foreign Entity (NFFEs) reports directly to the IRS rather than through their Host Country Tax Authority (HCTA). Under IRS business rules, all files uploaded by an FI in a M1O2 jurisdiction will be routed to the HCTA. When a Direct Reporting NFFE applies for its GIIN through the FATCA Online Registration portal it must specify its jurisdiction as ‘Other’ if it is physically located in a M1O2 jurisdiction.  The GIIN assigned as a result of this registration option  instructs IDES to route transmissions directly to the IRS and delivers  transmission Notifications directly to the Direct Reporting NFFE and not to the M1O2 HCTA.

 B12.  What is the procedure for reporting accounts with nil payments, such as a payment of zero or a negative balance? For example, a depository account may be held by a US Specified Person, have a positive account balance at 31 December, but have no payments of interest during the year.

In April 2016, the IRS updated FATCA Reporting to allow zero or negative amounts to be considered valid payment amounts. If you provide the Payment element by entering zero or a negative PaymentAmnt, you are required to enter value for the Type element also. Alternatively, you can submit the record without providing the Payment element. Both examples below are considered acceptable.

Example 1 — Zero payment amount and type: 

<ftc:AccountBalance currCode=”USD”>50000.00</ftc:AccountBalance>



<ftc:PaymentAmnt currCode=”USD”>0</ftc:PaymentAmnt>


Example 2 — No payment amount:

<ftc:AccountBalance currCode=”USD”>50000.00</ftc:AccountBalance>

 C25.  In 2016, I submitted a new Form 8966, FATCA Report, using the XML Schema v1.1. In 2017, I need to amend or correct a record on that report using XML Schema v2.0. What version of the schema do I need to use to amend or correct the record?

Beginning early January 2017, FATCA Reporting will only support the XML schema v2.0. All new, nil, amended, corrected, and void reports should use version 2.0. The two versions of the FATCA XML schema are backwards compatible and all files submitted using schema version 1.1 will not validate against version 2.0. Example: In November 2016, a user submits Report2015 and receives a notification to correct record level errors within 120 days. In February 2017, the user should make all corrections using XML schema version 2.0.

C26.  I submitted a file through IDES containing corrected records for TY 2014.  I received a Notification that the IRS could not match the CorrDocRefID element with any existing record.  At a recent IT Technical Forum call the IRS indicated this was due to the presence of duplicate DocRefIDs in the system for that tax year.  How can I submit a corrected, amended or voided record for TY 2014 if that situation exists?

If there are duplicate DocRefIDs existing in the system, you may not be able to submit a corrected, amended or voided record in the usual process.  The IRS has created the following workaround to submit the necessary changes:   For all submissions under this procedure, use FATCA1 (New Data) as the DocTypeIndic.  While we are aware this identifies a New record, for purposes of validation the use of FATCA1 will avoid the record being identified as a duplicate DocRefId. Prepare the record with a unique DocRefID (different than that used on the original record) according to the new DocRefID format.

For Individual Account Holders, enter the following in the MiddleName data element:

  • For Corrected records, enter CORRECTTY2014
  • For Amended Records, enter AMENDTY2014
  • For Voided Records enter, VOIDTY2014

If you have a MiddleName to enter in that field you may enter it after the above language has been inserted in the field.

For Entity Account Holders, enter the codes (shown above) at the beginning of the entity Name field.  You can enter the entity’s legal or business name following the specified language.  For example, to correct a record for account holder “ABC Inc”, enter “CORRECTTY2014 ABC Inc”.



 A16.  We have heard previous discussions that there would be an updated XML Schema for FATCA Reporting (Form 8966) for 2015.  Could you advise when we will have the new version?

The IRS released a draft version for FATCA XML Schema v2.0 in June 2016.  This version will be deployed into production in January 2017. The IRS will conduct open user testing for all FATCA filers in Fall 2016.  For more information, go to FATCA XML Schemas and Business Rules web page.

B11.  During the Global IT Technical Forum call you indicated the IRS was preparing a maintenance release at the end of April that would address several reported defects.  Could you inform us exactly what issues are being corrected?

The April 2016 maintenance release addressed the following issues:

  • Allows submission of Amended, Corrected or Voided account reports where the Reporting FI TIN field in the original New record was either empty or contained an invalid entry. For filers that already submitted a subsequent New record to correct the information, this will permit you to now Void the original erroneous account report (s) and/or pooled reports.
  • Updates record-level validations to allow zero or negative amounts to be considered valid Payment Amounts and/or a valid Account Balance in Account Reports.
  • Updates record-level validations to perform validations on ALL Substantial Owners listed for a specific account report. Previously only the first listed Substantial Owner was validated.

C9.  How will the IRS handle updates to the XML schema? Will the system still be able to accept older versions of the schema or will prior years’ files need to be updated to the current schema version?

In June 2016, the IRS released FATCA XML schema v2.0 to be deployed in January 2017. FATCA Reporting will only accept XML files created using schema v2.0; multiple versions are not supported. All FATCA XML files should be created and validated using the current schema in effect at the time of filing. Prior to January 2017, use schema v1.1 for all FATCA submissions; after January 2017, only use v2.0 to amend, correct and void reports that were previously created using schema v1.1.

C20.  Which users are required to submit a Nil report?  What is the procedure for submission of these reports?

Generally, only Direct Reporting Non-Financial Foreign Entities (NFFEs) and Sponsoring Entities’ reporting on behalf of a Sponsored Direct Reporting NFFEs are required to submit a Nil Report. A Nil Report is optional for all other filers.  Also note that nil reporting may not be required by the IRS, it may be required by the local jurisdiction. Consult your local tax administration for more information. For more information, sample nil reports are available at FATCA XML Schemas and Business Rules for Form 8966 web page.

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