Tax & Accounting Blog

The TAX GAP Act: Changes in 1099 Reporting May Be Considered by Congress

The TAX GAP Act: Changes in 1099 Reporting May Be Considered by Congress

There’s always something cooking in Congress that has the potential of affecting Form 1099 reporting, and lately we are keeping an eye on the TAX GAP Act (S. 1289).  Section 401 of the Act would require payers to backup withhold federal tax on several types of reportable payments if the IRS has not provided verification … Read More

Understanding W-8BENs – A Foreign Perspective

W-8BENs have been around for just over 10 years and it has taken the select few that currently use them years of cumbersome administration – and some painful audit procedures – to truly understand how they need to be completed correctly. Now that we’ve finally grasped them, we are soon to be faced with not just one … Read More

New FATCA Notice Released – Notice 2011-53

New FATCA Notice Released – Notice 2011-53

On July 17, 2011,  the IRS released a new notice, 2011-53, which provides a ‘workable timeline for FFIs and U.S. Withholding Agents to implement the various requirements of FATCA’. Specifically: • An FFI must enter an agreement with the IRS by June 30, 2013, to ensure that it will be identified as a participating FFI … Read More

Understanding the Difference between Documented and Undocumented

It is important to keep in mind that, as a general rule, all US source payments made to non-US residents are subject to 30% withholding. To apply a reduced (or zero) rate of withholding, the non-US person must provide valid documentation. If your securities account is with a Withholding Agent (a Qualified Intermediary, Non-Qualified Intermediary … Read More

Common W-8BEN Validation Issues

W-8BEN forms are notorious for being difficult to complete. Here are some of the most common errors found on the Form W-8BEN that, if present, may deem that client to be undocumented. Cross reference your documentation against these common errors to ensure documentation compliance. Name Mis-Match The name on line 1 of the W-8BEN needs … Read More

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IRS Resources for Identifying Tax-Exempt Organizations

A tax-exempt organization is an exempt recipient for purposes of tax information reporting, being generally exempt from being reported on a Form 1099.  The organization generally claims this exempt status on the Form W-9 it furnishes to you.  But, if you do not have a W-9, an alternate rule permits a payor to treat an … Read More