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In applying the request for exchange of financial information under the Tax Information Exchange Agreement, recent requests have been received from the Hong Kong Inland Revenue Department (IRD) from the US government to mandate that Hong Kong Financial Institutions to submit details of the pool reports of non-Consenting US Accounts (i.e. recalcitrant accounts) that were submitted to the US Internal Revenue Service (IRS) under FATCA regulations.
The request shows that the IRS has begun looking into and investigating the submitted pool reports of recalcitrant accounts filed by Financial Institutions. Recalcitrant accounts are generally those accounts of the Financial Institution whom the account holders failed to provide consent necessary to disclose relevant identifying information to the IRS.

This request also puts a spotlight on a Financial Institutions’ internal compliance practices and policies in collecting and obtaining full information in regards to US Persons holding financial accounts directly or indirectly through specified non-US entities.

Financial Institutions will need to ensure that their compliance review processes to identify any of the following on account holders:

  • Identify account holder as a US citizen or resident
  • Unambiguous indication of US place of birth
  • Current US mailing or residence address
  • Current US telephone number
  • Standing instructions to transfer funds to an account maintained in the US
  • Current effective power of attorney or signatory authority granted to person with a US address
  • An “in-care-of” or “hold mail” address that is the sole address on file of the account holder
Failure to comply with the IRD request would subject the Financial Institution liable to penalty.

For more information or how we can help, please feel free to contact Gilbert Pun at +(852) 2521-2328 or send an email to This email address is being protected from spambots. You need JavaScript enabled to view it. for more details.