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Tax Operations Services for Regulatory, Legal and Tax Compliance

Tax Operations

After the Emergency Economic Stabilization Act of 2008, stringent requirements were imposed on brokers and other intermediaries to report their clients’ adjusted cost basis on IRS Form 1099 to both investors and the IRS for Equities, Mutual Fund debt securities, options and private placements. eClerx provides data verification, system remediation, reconciliation and testing services to ensure accurate cost basis reporting.
Foreign Account Tax Compliance Act (FATCA) is designed to prevent US taxpayers from avoiding tax by investing through non-US financial institutions and offshore investment vehicles. FATCA is effective 1 January 2013 for US financial institutions and 1 January 2014 for foreign (non-US) financial institutions (FFIs). eClerx provides process assurance, due diligence, client on-boarding and reporting services to help banks comply with FATCA.


  • Compliance with Regulatory Requirements associated stringent timelines, avoidance of penalties
  • Constant legislative and judicial changes especially for cross-border transactions
  • Data Integrity issues
    • Non-availability of centralized and readily available customer data
    • Issues with completeness and consistency of customer data
    • Incorrect classification of related entities
  • System limitations
    • In allowing variations in Cost Basis computation
    • For meeting regulatory reporting requirements
  • Process limitations
    • Absence of a structured procedure for chasing clients for missing/incomplete tax information
    • Need for knowledge and expertise to perform complex and dynamic tax function
  • Governance and Oversight
    • Need for a robust governance and control framework
    • Absence of insightful MI and reporting frameworks for internal and IRS compliance


  • End to End workflow solution including:
    • On-boarding and KYC support
    • Validation of tax withholding
    • Statements against bank’s system and marking discrepancies
    • Key Customer Account and Transaction Monitoring to track and classify payments and securities transactions
    • Module to calculate individual tax withholding percentages
    • Comprehensive MI and Reporting suite to cover IRS and internal requirements
  • System remediation activities:
    • Identify and process designated equities to formulate Cost Basis (VSP)
    • Reconcile upstream reports to ensure accurate data flow into Cost Basis Reporting Engine
    • Rectify systems with data from tax documents submitted by clients
  • Project Management and IT Support
    • Change Management and Documentation support for effective management through FATCA evolution
    • BA and UAT support to assess, evaluate and transition technology smoothly
    • System Migration support
    • Process Assurance support to evaluate processes, diagnose gaps and improve operations quality


  • Enable banks to meet regulatory deadlines and produce accurate tax information
  • Accurate capture of covered and uncovered securities across accounts
  • High accuracy rates in data capture and reconciliation using eClerx’s workflow
  • Cost effective solution
  • Flexibility to quickly ramp up and ramp down team across different projects