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Qualified Intermediary Agreement


A Qualified Intermediary (QI) Agreement is an agreement between the QI and the Internal Revenue Service (IRS) in order to simplify the obligations of the QI as a withholding agent under Chapter 3 and 4 as payors and under chapter 61 and Section 3406 for amounts paid to the account holders of the QI.

Obligations include, but are not limited to:

  • Collecting documentation from account holders
  • Applying due diligence standards to the documentation
  • Applying nonresident alien withholding , FATCA withholding, or backup withholding where required
  • Reporting on Forms 1042, 1042-S, 8966 (or other equivalent form), and the Form 1099 series, where required
  • Depositing withheld taxes with the IRS.
  • Performing reviews and audits where required – making certifications to the IRS under FATCA where required The QI agreement also allows certain non-US (foreign) persons to enter into a agreement with the IRS to act as a Qualified Derivatives Dealer (QDDs) and to assume primary withholding and reporting responsibilities on all dividend equivalent payments that they make.


Cite: Treas. Reg. §1.1441-1(e)(5).1 Rev. Proc. 2017-15