The IRS has issued key updates for January 2025, outlining crucial deadlines and compliance requirements for financial institutions. Comply Exchange, which offers tax compliance software, recently offered a guide to the updates.
With Form 1099 deadlines rapidly approaching, institutions must ensure timely distribution and filing. Key deadlines include January 31, 2025, for recipient copies of 1099-MISC, 1099-NEC, and 1099-DIV forms. IRS paper filings are due by February 28, 2025, while electronic submissions have a final deadline of March 31, 2025. If a due date falls on a weekend or federal holiday, it extends to the next business day. Full details can be found in the IRS’s General Instructions for Certain Information Returns.
Regulatory penalties for incorrect or late filings of Forms 1099 and 1042-S have increased, reflecting heightened scrutiny. In 2025, late submissions within 30 days will incur a $60 penalty, while those filed after August 1, or not at all, will be fined $330. Intentional disregard of filing requirements results in a $660 penalty per return. Financial institutions should review the IRS Information Return Penalties page for further details.
In international tax reporting, the Cayman Islands’ Department for International Tax Cooperation (DITC) has launched a comprehensive CRS compliance review programme. This initiative includes governance evaluations, due diligence assessments, and report submission reviews. Financial institutions are encouraged to reassess documentation and strengthen internal processes to ensure adherence to transparency standards.
Finland’s tax administration has issued a reminder for financial institutions to submit their FATCA and CRS annual reports by January 31, 2025, Comply Exchange stated. Institutions must verify their contact details and address any tax authority feedback to maintain compliance. Similarly, France has released version 4.9 of its FATCA technical guidance, extending temporary relief on reporting U.S. Taxpayer Identification Numbers (TINs) until 2027 and pushing submission deadlines to July 15, 2025.
The IRS has also released a comprehensive webinar covering FATCA Responsible Officer Certifications. This session delves into compliance responsibilities, certification processes, and key reporting deadlines. Financial institutions can access the webinar via the IRS website.
Further global updates include the Isle of Man publishing its 2024 list of reportable jurisdictions and Jersey’s release of FATCA and CRS practical guidance version 9.0. Key changes include expanded nil reporting options and TIN reporting clarifications. St. Kitts and Nevis has issued a 2025 advisory on the Automatic Exchange of Information (AEOI) compliance form.
South Korea has updated its CRS regulations, adding Georgia, Moldova, and Ukraine to its list of Participating and Reportable Jurisdictions. Meanwhile, Switzerland has reminded financial institutions to submit CRS reports to the Swiss Federal Tax Administration by June 30, 2025.
With these changes, financial institutions must stay proactive in compliance efforts. As IRS deadlines and global tax reporting obligations evolve, firms should review documentation practices and update reporting processes to avoid penalties and ensure seamless tax season operations.
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