Tax & Accounting Blog

IRS Issues New 2013 Edition of Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities

IRS Issues New 2013 Edition of Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities

The IRS has issued a new edition of Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, revised for use in 2013. Pub 515 is the basic plain-English IRS explanation of payers’ tax withholding obligations under Chapter 3 of the Internal Revenue Code (section 1441 withholding) for payments of U.S-source income to … Read More

Form 1042-S Information Reporting to Non-U.S. Persons Part 2: Payments Not Reportable on Form 1042-S

Form 1042-S Information Reporting to Non-U.S. Persons Part 2: Payments Not Reportable on Form 1042-S

Income payments not subject to NRA withholding are also not subject to Form 1042-S reporting. They include: • Income excluded from income under section 61 (e.g., qualified scholarships and fellowships). • Proceeds on sales of U.S. real property interests by non-U.S. persons (use Form 8288). • Partnership profits reported by the partnership to a … Read More

Form 1042-S Information Reporting to Non-U.S. Persons Part 1

Form 1042-S Information Reporting to Non-U.S. Persons Part 1

Income payments made to non-U.S. persons must be reported on a Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, not on a Form 1099. Unlike Form 1099-reportable payments, there is no reporting exception for payments to corporations and no minimum dollar threshold for reporting on Form 1042-S. Reporting on Form 1042-S is … Read More

IRS postpones U.S. new entity reporting of interests in specified foreign financial assets

IRS postpones U.S. new entity reporting of interests in specified foreign financial assets

In Notice 2013-10, the IRS postpones a new requirement for U.S. domestic entities formed or availed of for purposes of holding, directly or indirectly, specified foreign financial assets, report those interests in a statement attached to the entity’s tax return.  This new reporting falls under IRC section 6038D, applicable to individuals who hold any … Read More

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FATCA Final Regulations issued, provide rules for new tax documentation and withholding regime

The Final Regulations for Chapter 4 of the Internal Revenue Code, sections 1471 through 1474 known as the Foreign Account Tax Compliance Act or “FATCA,” have been issued. The official date of publication in the Federal Register is scheduled to be January 28, 2013. The IRS has made the complete text, TD 9610, available at … Read More

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 5 – Resident or Nonresident Alien

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 5 – Resident or Nonresident Alien

Foreign nationals are nonresident aliens for U.S. income tax purposes unless they meet one of two tests: 1) the U.S. lawful permanent resident test (also called the green card test) or 2) the substantial presence test. Foreign nationals who change immigration status during the calendar year, or who first enter the U.S. after January 1, … Read More