Tax & Accounting Blog

Common W-8BEN Validation Issues

1042-S, 1099, 6050W, Cost-Basis Reporting, Document and WorkFlow Management, Information Reporting for Wealth Management, International Reporting & Compliance, Tax Information Reporting, TIN Compliance, Trust Tax, W-8 & W-9 Foreign Reporting, Withholding Management July 7, 2011

W-8BEN forms are notorious for being difficult to complete. Here are some of the most common errors found on the Form W-8BEN that, if present, may deem that client to be undocumented. Cross reference your documentation against these common errors to ensure documentation compliance.

Name Mis-Match

The name on line 1 of the W-8BEN needs to accurately match the name held on the withholding agent’s books and records.

Missing Date

Often, the client will forget to sign the W-8BEN or complete the field in non-U.S. date format. The withholding agent can resolve this by date stamping the form on the day it is received.

Missing Signature

If the client forgets to sign the form, the form is deemed invalid and the client is undocumented.

P.O. Box and Care Of Addresses

Clients will occasionally supply you with a P.O. Box or Care Of (C/O) address for their permanent residence address (PRA). The rules specifically state that P.O. Boxes and C/O addresses should not be supplied for a PRA. In some circumstances, a written explanation can cure a form if a P.O. Box or C/O address has been provided.

U.S. PRA Address

If a U.S. PRA has been provided, the form is deemed invalid. A W-9 should be used instead.

U.S. Mailing Address

If a U.S. mailing address has been provided, the form may be deemed invalid and further written information is required to accept the form.

Treaty Claim

If your client is claiming treaty benefits, the country of residence on line 4 must be the same country as specified on line 9a (treaty claim).

Entity Type (Line 3)

Only one entity type can be selected on a W-8BEN. The W-8BEN is invalid if no entity type has been selected.

Capacity

A capacity type must be entered for a non-individual entity type.

Section 9

If your client is a non-individual (for example, a corporation) and is claiming treaty benefits, both lines a and c need to be selected and completed.

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