Tax & Accounting Blog

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 6: What Would Give Me Reason to Know That the Recipient Is a Nonresident Alien?

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 6: What Would Give Me Reason to Know That the Recipient Is a Nonresident Alien?

The IRS has addressed the facts that would cause a payer who has no actual information about a recipient to have a reason to know that the recipient might be a nonresident alien: The individual is not a U.S. citizen or immigrant (popularly called a green-card holder). A nonimmigrant is a U.S. person only if substantially … Read More

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NRA Withholding and Reporting on Payments to Foreign Nationals – Part 5: What if I Have No Information When I Have to Make a Payment?

The Section 1441 regulations provide presumptions that you must follow in order to avoid liability for underwithholding when you make payments to recipients for whom you have no documentation. (See the table in IRS Publication 515  for references to specific withholding regulations for different types of payments.) An individual recipient on whom you have no … Read More

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 4: Do the Same Tax Residency Rules Apply for State Withholding Tax Purposes?

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 4: Do the Same Tax Residency Rules Apply for State Withholding Tax Purposes?

No, unless the state has specific rules defining residency that are tied to a recipient’s federal tax residency status. Lacking such special rules, residency for state tax purposes is determined for foreign nationals under the same rules that apply to U.S. citizens. … Read More

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Per Diem Expense Rates for Travel Reimbursement Now Published Only Online, IRS Publication 1542 Eliminated

The official source for the federal government per diem rates allowable for expense reimbursement in business travel away from home within the continental United States (CONUS) is the online information on the U.S. General Services Administration webpage  http://www.gsa.gov/portal/category/21287. On this webpage, you can also find links to the Department of Defense per diem rates … Read More

IRS Finds Common Errors in Forms 1099-R and 5498 for Simplified Employee Pension (SEP) Accounts

IRS Finds Common Errors in Forms 1099-R and 5498 for Simplified Employee Pension (SEP) Accounts

The IRS recently released the report of an SEP Plan Compliance Check project conducted by the Employee Plans Compliance Unit. The compliance check found numerous errors made by SEP plan sponsors and the financial institutions that file information returns to report SEP-IRA contribution information. As part of this project, the IRS contacted financial institutions and plan sponsors for … Read More

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 2: How Do I Know if My Organization Is a Withholding Agent?

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 2: How Do I Know if My Organization Is a Withholding Agent?

The IRS defines withholding agent very broadly. Every U.S. or foreign person who controls, holds custody of, receives, disposes of, or pays any item of income to a foreign person that is subject to NRA withholding is a withholding agent. A withholding agent includes (without limitation) individuals, corporations, partnerships, trusts, associations or any other entity … Read More