This update supplements the Instructions for Form 8966 (FATCA Report) for 2016 to correct the reporting requirements for withholding agents making withholdable payments to passive nonfinancial foreign entity (passive NFFE) account holders. Filers of Form 8966 may rely on this update, which will be incorporated in the next issuance of the Instructions for Form 8966 for the 2017 calendar year. The account balance instruction for line 3a of Part IV on page 12 of the instructions provides that a withholding agent that is not an FFI should enter on line 3a the average calendar year account balance or value of an account held by an owner-documented foreign financial institution or a passive NFFE. This instruction revises the requirement for reporting certain accounts held by passive NFFEs. Withholding agents, other than those reporting under their applicable chapter 4 requirements as FFIs, are not required to enter the account balance or value of an account held by a passive NFFE, and may instead enter “0” on line 3a.
