In last week’s EEI conference, Michael Danilack, Deputy Commissioner at the IRS, announced some positive changes for those having to collect and audit the W-8BEN.
The term he used was “clearing the underbrush” which, in essence, means that the IRS is aware that they have been too strict on the validation rules of the W-8BEN in the past, and want to reduce the rules to concentrate on the critical areas. A directive will “shortly” be released to highlight these “underbrush” issues, plus how they should be treated going forward.
These “underbrush” issues consist of:
- Capacity line titles
- Fax, copies or emailed versions of the form
- The use of a third party address as the permanent residence address
- Explanation of a US mailing address
- Other minor (foot fault) errors
This is a positive response from the IRS, thanks to a lot of work from IRPAC, and in the long run will reduce a vast amount of manual effort in collecting correct W-8BEN forms. Let’s hope the directive doesn’t take too long to be released!