Tax & Accounting Blog

Form 1042-S: IRS Alerts Payers to the Correct Use of Codes for Unknown Recipient and Unknown Country

Form 1042-S: IRS Alerts Payers to the Correct Use of Codes for Unknown Recipient and Unknown Country

A perennial problem in Form 1042-S reporting, noted by the IRS in the current edition of Publication 1187, is misreporting which results from the payer not making correct use of Unknown Recipient (recipient code 20) and Unknown Country (country code UC). UC is used as a country code only when you conclude you have paid an … Read More

New IRS Form to Report Foreign Assets

New IRS Form to Report Foreign Assets

The IRS recently released a draft of new Form 8938 that requires taxpayers to report on certain foreign financial assets for tax year 2011. This reporting is part of FATCA (Foreign Account Tax Compliance Act), which strives to improve compliance of U.S. taxpayers who have offshore assets. This new IRS filing requirement does not replace the taxpayer’s … Read More

When I Grow Up, I Want to be a Tax Accountant

When I Grow Up, I Want to be a Tax Accountant

As we wrap up the year and start preparing for 2012, our team wanted to share this video with you. Once upon a time, when we were young, we imagined what life would be like when we grew up. Some of us may have thought, “When I grow up, I want to be … Read More

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Why the Nature of Income Paid to Foreign Vendors Matters

U.S. organizations making payments to vendors must determine whether the vendor is a U.S. person or a non-U.S. person because only payments to U.S. persons (actual or presumed) are covered by Form 1099 rules and procedures. The term, U.S. persons, includes U.S. citizens, resident aliens (based on I.R.C. Section 7701(b), the tax residency rules) and … Read More

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Residency for Treaty Purposes: Corporations

The United States has income tax treaties with over 60 countries for the purpose of avoiding double taxation. The Residency Article of an applicable income tax treaty sets forth rules for determining which entities and individuals (collectively, persons) are residents of a country for purposes of the treaty. As the IRS expands its compliance enforcement with … Read More

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Substitute Statements to Recipients and Publication 1179

With tax information reporting deadlines looming in February, software vendors are doing their best to apply new rules from the draft of Publication 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, and Certain Other Information Returns. The draft publication was released late in October and updated again on December 2, but … Read More