Webinar Recap: Becoming a Qualified Intermediary

Webinar Recap: Becoming a Qualified Intermediary – Turning Risk into Competitive Advantage

On behalf of TAINA Technologies and WTS Hansuke, thank you to everyone who joined and participated with questions in our recent webinar, “Becoming a Qualified Intermediary – Turning Risk into Competitive Advantage.” The session brought together industry specialists Ahmed Nawab (Hansuke) and Sean Sutton (TAINA) to unpack the origination, benefits, and compliance solutions of the IRS ran Qualified Intermediary program.

Whether you’re a new entrant to the QI program or an experienced intermediary navigating ongoing obligations, this webinar delivered valuable insights designed to support your operational, regulatory, and strategic objectives.

Key Takeaways from the Session

1. Why the QI Regime Matters

In the early 2000s, the U.S. Government Accountability Office identified gaps in the traditional withholding system, especially around Non-Qualified Intermediaries (NQIs). It was emphasized that Qualified Intermediaries help close these gaps by providing the IRS with more withholding agents who have clearer visibility, improved due diligence, and enhanced oversight, strengthening the integrity of the global tax system.

2. The Benefits of Becoming a QI

Participants were reminded of the significant advantages available to QIs, including:

• Greater credibility with both regulators and the market
• The ability to maintain direct client relationships with enhanced confidentiality and data controls
• More efficient application of withholding and downstream reporting

3. Understanding the QI Framework

The QI Agreement emphasizes the three main operation obligations of withholding agents:

• Onboarding Documentation (i.e. W-8/W-9 management, due diligence, monitoring expirations)
• Withholding (correct rates, tax treaty application, presumption rules)
• Information Reporting (Forms 1042, 1042-S, 1099, and 945 compliance)

The 2023 Agreement also introduced a strengthened governance model, including the Responsible Officer (RO) role and formal certifications. The QI must establish processes and procedures, which are certified every three years after a periodic review is completed. The RO must oversee and certify remediations for any material failures identified during review in order to keep the QI designation.

4. Common Pitfalls to Avoid

Tax operations are still being performed manually, so documentation and operational failures continue to be a widespread challenge. Common errors found in the QI space include:

• Using outdated IRS forms
• Missing mandatory details (TINs, signatures, GIINs)
• Failing to track expiry dates
• Lack of clear procedures or internal controls

At this time was a quick reminder that automation and technology improvements will really help eliminate these errors. Whether internal built, or leveragin existing RegTech vendors, these are the material failures that RO’s are attempting to avoid.

5. Penalties for Non-Compliance

The IRS imposes severe penalties for late or incorrect reporting, under-withholding, or material failures, some with no upper cap. Loss of QI status is a major risk, resulting in the firm reverting to NQI treatment and losing key operational advantages. These reputational risks can be more extreme than the financial ones, so QIs really need to be aware of their compliance issues.

6. The Three-Year QI Support Roadmap

WTS Hansuke and TAINA have developed a structured approach to help firms succeed in their QI lifecycle:

1. Readiness: eligibility assessment, QAAMS registration, documentation review
2. Implementation: governance, training, automation, process build
3. Review & Sustainability: periodic review support, RO certifications, continuous improvement

7. Transforming Risk into Opportunity

The central message of the webinar: Where NQIs create opacity, QIs create trust.
Through strong governance, documented processes, and automated validation tools, QIs can reduce risk, lower operational burden, and position themselves as trusted partners in global investment flows.

If you would like to learn more about becoming a QI, strengthening your compliance capabilities, or leveraging technology to improve documentation and withholding accuracy, our team is here to help.