Tax & Accounting Blog

Positive Future Changes for the W-8BEN

1042-S, 1099, 6050W, Cost-Basis Reporting, Document and WorkFlow Management, Information Reporting for Wealth Management, International Reporting & Compliance, ONESOURCE, Tax Information Reporting, TIN Compliance, Trust Tax, W-8 & W-9 Foreign Reporting, Withholding Management November 3, 2011

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!