Tax & Accounting Blog

IRS Makes Changes in Processing Central Withholding Agreements for Foreign Entertainers and Athletes

1099, ONESOURCE, Tax Information Reporting, TIN Compliance, W-8 & W-9 Foreign Reporting, Withholding Management October 1, 2012

Central Withholding Agreements (CWAs) are used by foreign athletes and entertainers who are planning a tour of the United States to arrange in advance an amount of U.S. income tax to be withheld on payments of income for events that are listed in the CWA, generally at a lower rate than would apply without a CWA. IRS Form 13930 provides the instructions on how to apply for a CWA.

Effective October 1, 2012, all applications for a Central Withholding Agreement must be sent to the IRS CWA Program in Illinois. The fax number for submitting CWA applications is: 630-493-5906. The mailing address for submitting CWA applications is:

Central Withholding Agreement Program
Mail Stop: 1441
2001 Butterfield Road
Downers Grove, IL 60515-1050

Effective January 1, 2013, requests for a CWA must be received by the IRS a minimum of 45 days prior to the first event to be covered by that CWA. The IRS states that CWA applications received less than 45 days prior to the first event listed in the CWA itinerary will not be processed by the IRS and, therefore, the events will be subject to withholding-at-source at 30% of gross income, as required in the tax regulations under I.R.C. section 1441.

The IRS had previously advised that CWA applications “should be” submitted at least 45 days in advance of the first event but, as of January 1, receipt a minimum of 45 days in advance will be a fixed deadline.

The IRS also announced on September 28 that, to help clarify the process for nonresident aliens, the IRS has confirmed with the Social Security Administration that nonresident alien individuals may apply for a Social Security Number immediately upon entering the U.S. and do not need to wait 10 days. In addition, the IRS and SSA have confirmed that the mailing address for the nonresident alien individual may be a U.S. post office box or the address of a designated power of attorney.