On the first of January the IRS sent an email to all QIs informing them that the renewal of the QI agreement was available and must be completed by March 1, 2023. Many of our clients, after checking their home page on the Qualified Intermediary Application and Account Management System (“QAAMS”), contacted us asking why there was no renewal option in the activity center. We noticed that the affected QIs with the missing renewal link had performed a renewal for the 2017 QI agreement.
Did the absence of the renewal link mean that the 2023 QI agreement was automatically renewed for these QIs or was it a glitch on the part of the IRS? It turns out to the be the latter, and last Friday (January 20, 2023) the IRS released Issue Number 2023-01 acknowledging that the renewal link was not available for some QIs and that steps were being taken to ensure that this link will be available to all QIs.
Importantly, the 2017 QI agreement expired on December 31, 2022 and in order to retain QI status from January 1, 2023 a QI must agree to the terms of the 2023 QI agreement (contained in Revenue Procedure 2022-43).
Due to the unavailability of the renewal link the IRS has extended the deadline to perform the renewal of the QI agreement from March 1, 2023 to May 1, 2023.
The renewal procedure is pretty straightforward and requires confirmation of the responsible officer and contact person, indication of prior name in case of a name change as well as general information regarding the QI. Note that Part 2 of the renewal procedure, which requests statistical information (e.g., the number and type of clients and value of assets), does not need to be completed (enter zeros or leave the pre-populated figures).
There are two important requirements to note: First, the QI must confirm it has performed the required QI reporting in the period prior to renewal (e.g., Form 1042, Form 1042-S and Form 1099). Second, as a condition to renew the QI agreement (or to obtain QI status), the QI will be required to consent to having its name, status as a QI and QI-EIN disclosed on a public list to be published by the IRS.
We recommend that QIs monitor their profile on QAAMS and timely perform the renwal in order to maintain QI status from January 1, 2023.