Tax & Accounting Blog

Who Is a U.S. Citizen and Why It Matters: Part 2 – Tax-Related Rules for Citizens

Who Is a U.S. Citizen and Why It Matters: Part 2 – Tax-Related Rules for Citizens

In order to apply the proper tax-related rules, payment professionals, tax advisors and return preparers need to know which employees, payees, or clients are U.S. citizens, and which are not and may, therefore, be subject to a different set of tax rules and procedures. Taxation of Worldwide Income. U.S. citizens are subject to U.S. income tax … Read More

Australia studying reciprocal tax agreement to satisfy U.S. FATCA obligations of its financial institutions

Australia studying reciprocal tax agreement to satisfy U.S. FATCA obligations of its financial institutions

The Australian government is exploring the feasibility of an agreement with the United States based on the model reciprocal agreement issued in July by the U.S. Department of Treasury for implementation of FATCA (the Foreign Account Tax Compliance Act).  Under the agreement, Australian financial institutions would be able to implement the due diligence and reporting … Read More

Who Is a U.S. Citizen and Why It Matters – Part 1

Who Is a U.S. Citizen and Why It Matters – Part 1

When it comes to U.S. income tax, not all individual income recipients are treated alike. The Internal Revenue Code and IRS regulations have special rules for determining when foreign national individuals are resident aliens and taxed like U.S. citizens and rules for taxing the income of foreign nationals when they are nonresident aliens. As a … Read More

Draft of new Form W-8ECI released by the IRS

Draft of new Form W-8ECI released by the IRS

The fourth in the new series of Forms W-8 has been released for public comment.  The W-8IMY has been revised so that the form will serve as documentation for compliance with both Chapter 4 (FATCA) of the Internal Revenue Code and Chapter 3 of the Code (the Section 1441 nonresident alien withholding-at-source requirements, some amendments … Read More

IRS discontinues tiered audit issue rankings

IRS discontinues tiered audit issue rankings

Since 2006, the IRS has used Tiered Issue rankings to set priorities for tax examinations and enforcement in tax areas that it believed posed the highest challenges in compliance or the abuse of tax law.  Now, however, the tiered issue process is being replaced with what the IRS Large Business and International division is calling … Read More

Information Reporting on Form 1042-S, A New Challenge for Accounts Payable – Part 10: Exemption Codes

Information Reporting on Form 1042-S, A New Challenge for Accounts Payable – Part 10: Exemption Codes

Exemption Codes indicate the reason that taxes were not withheld on the gross income being reported. Exemption Codes typically used for payments to foreign vendors are 00, 01, 02, 03, and 04. Code 00 in the Exemption Code field indicates the gross income was subject to NRA withholding. Exemption Code 00 is also used to … Read More