IRS Tax Helper

Proposed amendments have been announced by the Internal Revenue Service to improve the Qualified Intermediary (QI) program for foreign financial institutions serving taxpayers with accounts outside of the United States.
A QI or Accomodator is similar to, but not identical to, an escrow company. It should be a corporation that is in the full-time business of facilitating 1031 exchanges. Under Section 1031 of the Internal Revenue Code, the exchange of certain types of property may defer the recognition of capital gains or losses due upon sale, and hence defer any capital gains taxes otherwise due.
IRS Commissioner Doug Shulman pledged that the rules of the QI program would be revised to effectively discourage efforts to avoid U.S. withholding rules.
Under the planned changes, financial institutions that are QIs must provide early notices of material failure of internal controls, must improve evaluation of risk of evasion of U.S. taxation by U.S. Persons and must include audit oversight by a U.S. Auditor. Whether this is going to be good or bad is still up for debate.