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Irs Amendment Forms

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Irs Amendment Forms

Irs amendment forms 6. Irs amendment forms   Estimated Tax Table of Contents Who Must Make Estimated Tax Payments Estimated tax is a method used to pay tax on income that is not subject to withholding. Irs amendment forms This income includes self-employment income, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. Irs amendment forms Income tax generally is withheld from pensions and annuity payments you receive. Irs amendment forms However, if the tax withheld from your pension (or other) income is not enough, you may have to pay estimated tax. Irs amendment forms If you do not pay enough tax through withholding, by making estimated tax payments, or both, you may be charged a penalty. Irs amendment forms Who Must Make Estimated Tax Payments If you had a tax liability for 2013, you may have to pay estimated tax for 2014. Irs amendment forms In most cases, you must pay estimated tax for 2014 if both of the following apply. Irs amendment forms You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. Irs amendment forms You expect your withholding and refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return. Irs amendment forms The 2013 tax return must cover all 12 months. Irs amendment forms If all of your income will be subject to income tax withholding, you probably do not need to make estimated tax payments. Irs amendment forms For more information on estimated tax, see Publication 505. Irs amendment forms Prev  Up  Next   Home   More Online Publications
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The Irs Amendment Forms

Irs amendment forms Publication 515 - Main Content Table of Contents Withholding of TaxWithholding Agent Withholding and Reporting Obligations Persons Subject to NRA WithholdingIdentifying the Payee Foreign Persons DocumentationBeneficial Owners Foreign Intermediaries and Foreign Flow-Through Entities Standards of Knowledge Presumption Rules Income Subject to NRA WithholdingSource of Income Fixed or Determinable Annual or Periodical Income (FDAP) Withholding on Specific IncomeEffectively Connected Income Income Not Effectively Connected Pay for Personal Services Performed Artists and Athletes (Income Codes 42 and 43) Other Income Foreign Governments and Certain Other Foreign Organizations U. Irs amendment forms S. Irs amendment forms Taxpayer Identification NumbersUnexpected payment. Irs amendment forms Depositing Withheld TaxesWhen Deposits Are Required Adjustment for Overwithholding Returns RequiredJoint owners. Irs amendment forms Electronic reporting. Irs amendment forms Partnership Withholding on Effectively Connected IncomeWho Must Withhold Foreign Partner Publicly Traded Partnerships U. Irs amendment forms S. Irs amendment forms Real Property InterestForeign corporations. Irs amendment forms Domestic corporations. Irs amendment forms U. Irs amendment forms S. Irs amendment forms real property holding corporations. Irs amendment forms Partnerships. Irs amendment forms Trusts and estates. Irs amendment forms Domestically controlled QIE. Irs amendment forms Late filing of certifications or notices. Irs amendment forms Certifications. Irs amendment forms Liability of agent or qualified substitute. Irs amendment forms Reporting and Paying the Tax Withholding Certificates Tax Treaty TablesTable 1 Table 2 Table 3 How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Irs amendment forms Withholding of Tax In most cases, a foreign person is subject to U. Irs amendment forms S. Irs amendment forms tax on its U. Irs amendment forms S. Irs amendment forms source income. Irs amendment forms Most types of U. Irs amendment forms S. Irs amendment forms source income received by a foreign person are subject to U. Irs amendment forms S. Irs amendment forms tax of 30%. Irs amendment forms A reduced rate, including exemption, may apply if there is a tax treaty between the foreign person's country of residence and the United States. Irs amendment forms The tax is generally withheld (NRA withholding) from the payment made to the foreign person. Irs amendment forms The term “NRA withholding” is used in this publication descriptively to refer to withholding required under sections 1441, 1442, and 1443 of the Internal Revenue Code. Irs amendment forms In most cases, NRA withholding describes the withholding regime that requires withholding on a payment of U. Irs amendment forms S. Irs amendment forms source income. Irs amendment forms Payments to foreign persons, including nonresident alien individuals, foreign entities, and governments, may be subject to NRA withholding. Irs amendment forms NRA withholding does not include withholding under section 1445 of the Code (see U. Irs amendment forms S. Irs amendment forms Real Property Interest, later) or under section 1446 of the Code (see Partnership Withholding on Effectively Connected Income , later). Irs amendment forms A withholding agent (defined next) is the person responsible for withholding on payments made to a foreign person. Irs amendment forms However, a withholding agent that can reliably associate the payment with documentation (discussed later) from a U. Irs amendment forms S. Irs amendment forms person is not required to withhold. Irs amendment forms In addition, a withholding agent may apply a reduced rate of withholding (including an exemption from withholding) if it can reliably associate the payment with documentation from a beneficial owner that is a foreign person entitled to a reduced rate of withholding. Irs amendment forms Withholding Agent You are a withholding agent if you are a U. Irs amendment forms S. Irs amendment forms or foreign person that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding. Irs amendment forms A withholding agent may be an individual, corporation, partnership, trust, association, nominee (under section 1446 of the Code), or any other entity, including any foreign intermediary, foreign partnership, or U. Irs amendment forms S. Irs amendment forms branch of certain foreign banks and insurance companies. Irs amendment forms You may be a withholding agent even if there is no requirement to withhold from a payment or even if another person has withheld the required amount from the payment. Irs amendment forms Although several persons may be withholding agents for a single payment, the full tax is required to be withheld only once. Irs amendment forms In most cases, the U. Irs amendment forms S. Irs amendment forms person who pays an amount subject to NRA withholding is the person responsible for withholding. Irs amendment forms However, other persons may be required to withhold. Irs amendment forms For example, a payment made by a flow-through entity or nonqualified intermediary that knows, or has reason to know, that the full amount of NRA withholding was not done by the person from which it receives a payment is required to do the appropriate withholding since it also falls within the definition of a withholding agent. Irs amendment forms In addition, withholding must be done by any qualified intermediary, withholding foreign partnership, or withholding foreign trust in accordance with the terms of its withholding agreement, discussed later. Irs amendment forms Liability for tax. Irs amendment forms   As a withholding agent, you are personally liable for any tax required to be withheld. Irs amendment forms This liability is independent of the tax liability of the foreign person to whom the payment is made. Irs amendment forms If you fail to withhold and the foreign payee fails to satisfy its U. Irs amendment forms S. Irs amendment forms tax liability, then both you and the foreign person are liable for tax, as well as interest and any applicable penalties. Irs amendment forms   The applicable tax will be collected only once. Irs amendment forms If the foreign person satisfies its U. Irs amendment forms S. Irs amendment forms tax liability, you are not liable for the tax but remain liable for any interest and penalties for failure to withhold. Irs amendment forms Determination of amount to withhold. Irs amendment forms   You must withhold on the gross amount subject to NRA withholding. Irs amendment forms You cannot reduce the gross amount by any deductions. Irs amendment forms However, see Scholarships and Fellowship Grants and Pay for Personal Services Performed , later, for when a deduction for a personal exemption may be allowed. Irs amendment forms   If the determination of the source of the income or the amount subject to tax depends on facts that are not known at the time of payment, you must withhold an amount sufficient to ensure that at least 30% of the amount subsequently determined to be subject to withholding is withheld. Irs amendment forms In no case, however, should you withhold more than 30% of the total amount paid. Irs amendment forms Or, you may make a reasonable estimate of the amount from U. Irs amendment forms S. Irs amendment forms sources and put a corresponding part of the amount due in escrow until the amount from U. Irs amendment forms S. Irs amendment forms sources can be determined, at which time withholding becomes due. Irs amendment forms When to withhold. Irs amendment forms   Withholding is required at the time you make a payment of an amount subject to withholding. Irs amendment forms A payment is made to a person if that person realizes income, whether or not there is an actual transfer of cash or other property. Irs amendment forms A payment is considered made to a person if it is paid for that person's benefit. Irs amendment forms For example, a payment made to a creditor of a person in satisfaction of that person's debt to the creditor is considered made to the person. Irs amendment forms A payment also is considered made to a person if it is made to that person's agent. Irs amendment forms   A U. Irs amendment forms S. Irs amendment forms partnership should withhold when any distributions that include amounts subject to withholding are made. Irs amendment forms However, if a foreign partner's distributive share of income subject to withholding is not actually distributed, the U. Irs amendment forms S. Irs amendment forms partnership must withhold on the foreign partner's distributive share of the income on the earlier of the date that a Schedule K-1 (Form 1065) is provided or mailed to the partner or the due date for furnishing that schedule. Irs amendment forms If the distributable amount consists of effectively connected income, see Partnership Withholding on Effectively Connected Income , later. Irs amendment forms A U. Irs amendment forms S. Irs amendment forms trust is required to withhold on the amount includible in the gross income of a foreign beneficiary to the extent the trust's distributable net income consists of an amount subject to withholding. Irs amendment forms To the extent a U. Irs amendment forms S. Irs amendment forms trust is required to distribute an amount subject to withholding but does not actually distribute the amount, it must withhold on the foreign beneficiary's allocable share at the time the income is required to be reported on Form 1042-S. Irs amendment forms Withholding and Reporting Obligations You are required to report payments subject to NRA withholding on Form 1042-S and to file a tax return on Form 1042. Irs amendment forms (See Returns Required , later. Irs amendment forms ) An exception from reporting may apply to individuals who are not required to withhold from a payment and who do not make the payment in the course of their trade or business. Irs amendment forms Form 1099 reporting and backup withholding. Irs amendment forms    You also may be responsible as a payer for reporting on Form 1099 payments made to a U. Irs amendment forms S. Irs amendment forms person. Irs amendment forms You must withhold 28% (backup withholding rate) from a reportable payment made to a U. Irs amendment forms S. Irs amendment forms person that is subject to Form 1099 reporting if any of the following apply. Irs amendment forms The U. Irs amendment forms S. Irs amendment forms person has not provided its taxpayer identification number (TIN) in the manner required. Irs amendment forms The IRS notifies you that the TIN furnished by the payee is incorrect. Irs amendment forms There has been a notified payee underreporting. Irs amendment forms There has been a payee certification failure. Irs amendment forms In most cases, a TIN must be provided by a U. Irs amendment forms S. Irs amendment forms non-exempt recipient on Form W-9, Request for Taxpayer Identification Number and Certification. Irs amendment forms A payer files a tax return on Form 945, Annual Return of Withheld Federal Income Tax, for backup withholding. Irs amendment forms You may be required to file Form 1099 and, if appropriate, backup withhold, even if you do not make the payments directly to that U. Irs amendment forms S. Irs amendment forms person. Irs amendment forms For example, you are required to report income paid to a foreign intermediary or flow-through entity that collects for a U. Irs amendment forms S. Irs amendment forms person subject to Form 1099 reporting. Irs amendment forms See Identifying the Payee , later, for more information. Irs amendment forms Also see Section S. Irs amendment forms Special Rules for Reporting Payments Made Through Foreign Intermediaries and Foreign Flow-Through Entities on Form 1099 in the General Instructions for Certain Information Returns. Irs amendment forms Foreign persons who provide Form W-8BEN, Form W-8ECI, or Form W-8EXP (or applicable documentary evidence) are exempt from backup withholding and Form 1099 reporting. Irs amendment forms Wages paid to employees. Irs amendment forms   If you are the employer of a nonresident alien, you generally must withhold taxes at graduated rates. Irs amendment forms See Pay for Personal Services Performed , later. Irs amendment forms Effectively connected income by partnerships. Irs amendment forms   A withholding agent that is a partnership (whether U. Irs amendment forms S. Irs amendment forms or foreign) is also responsible for withholding on its income effectively connected with a U. Irs amendment forms S. Irs amendment forms trade or business that is allocable to foreign partners. Irs amendment forms See Partnership Withholding on Effectively Connected Income , later, for more information. Irs amendment forms U. Irs amendment forms S. Irs amendment forms real property interest. Irs amendment forms   A withholding agent also may be responsible for withholding if a foreign person transfers a U. Irs amendment forms S. Irs amendment forms real property interest to the agent, or if it is a corporation, partnership, trust, or estate that distributes a U. Irs amendment forms S. Irs amendment forms real property interest to a shareholder, partner, or beneficiary that is a foreign person. Irs amendment forms See U. Irs amendment forms S. Irs amendment forms Real Property Interest , later. Irs amendment forms Persons Subject to NRA Withholding NRA withholding applies only to payments made to a payee that is a foreign person. Irs amendment forms It does not apply to payments made to U. Irs amendment forms S. Irs amendment forms persons. Irs amendment forms Usually, you determine the payee's status as a U. Irs amendment forms S. Irs amendment forms or foreign person based on the documentation that person provides. Irs amendment forms See Documentation , later. Irs amendment forms However, if you have received no documentation or you cannot reliably associate all or a part of a payment with documentation, then you must apply certain presumption rules, discussed later. Irs amendment forms Identifying the Payee In most cases, the payee is the person to whom you make the payment, regardless of whether that person is the beneficial owner of the income. Irs amendment forms However, there are situations in which the payee is a person other than the one to whom you actually make a payment. Irs amendment forms U. Irs amendment forms S. Irs amendment forms agent of foreign person. Irs amendment forms   If you make a payment to a U. Irs amendment forms S. Irs amendment forms person and you have actual knowledge that the U. Irs amendment forms S. Irs amendment forms person is receiving the payment as an agent of a foreign person, you must treat the payment as made to the foreign person. Irs amendment forms However, if the U. Irs amendment forms S. Irs amendment forms person is a financial institution, you may treat the institution as the payee provided you have no reason to believe that the institution will not comply with its own obligation to withhold. Irs amendment forms   If the payment is not subject to NRA withholding (for example, gross proceeds from the sales of securities), you must treat the payment as made to a U. Irs amendment forms S. Irs amendment forms person and not as a payment to a foreign person. Irs amendment forms You may be required to report the payment on Form 1099 and, if applicable, backup withhold. Irs amendment forms Disregarded entities. Irs amendment forms   A business entity that is not a corporation and that has a single owner may be disregarded as an entity separate from its owner (a disregarded entity) for federal tax purposes. Irs amendment forms The payee of a payment made to a disregarded entity is the owner of the entity. Irs amendment forms   If the owner of the entity is a foreign person, you must apply NRA withholding unless you can treat the foreign owner as a beneficial owner entitled to a reduced rate of withholding. Irs amendment forms   If the owner is a U. Irs amendment forms S. Irs amendment forms person, you do not apply NRA withholding. Irs amendment forms However, you may be required to report the payment on Form 1099 and, if applicable, backup withhold. Irs amendment forms You may assume that a foreign entity is not a disregarded entity unless you can reliably associate the payment with documentation provided by the owner or you have actual knowledge or reason to know that the foreign entity is a disregarded entity. Irs amendment forms Flow-Through Entities The payees of payments (other than income effectively connected with a U. Irs amendment forms S. Irs amendment forms trade or business) made to a foreign flow-through entity are the owners or beneficiaries of the flow-through entity. Irs amendment forms This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Irs amendment forms Income that is, or is deemed to be, effectively connected with the conduct of a U. Irs amendment forms S. Irs amendment forms trade or business of a flow-through entity is treated as paid to the entity. Irs amendment forms All of the following are flow-through entities. Irs amendment forms A foreign partnership (other than a withholding foreign partnership). Irs amendment forms A foreign simple or foreign grantor trust (other than a withholding foreign trust). Irs amendment forms A fiscally transparent entity receiving income for which treaty benefits are claimed. Irs amendment forms See Fiscally transparent entity , later. Irs amendment forms In most cases, you treat a payee as a flow-through entity if it provides you with a Form W-8IMY (see Documentation , later) on which it claims such status. Irs amendment forms You also may be required to treat the entity as a flow-through entity under the presumption rules, discussed later. Irs amendment forms You must determine whether the owners or beneficiaries of a flow-through entity are U. Irs amendment forms S. Irs amendment forms or foreign persons, how much of the payment relates to each owner or beneficiary, and, if the owner or beneficiary is foreign, whether a reduced rate of NRA withholding applies. Irs amendment forms You make these determinations based on the documentation and other information (contained in a withholding statement) that is associated with the flow-through entity's Form W-8IMY. Irs amendment forms If you do not have all of the information that is required to reliably associate a payment with a specific payee, you must apply the presumption rules. Irs amendment forms See Documentation and Presumption Rules , later. Irs amendment forms Withholding foreign partnerships and withholding foreign trusts are not flow-through entities. Irs amendment forms Foreign partnerships. Irs amendment forms    A foreign partnership is any partnership that is not organized under the laws of any state of the United States or the District of Columbia or any partnership that is treated as foreign under the income tax regulations. Irs amendment forms If a foreign partnership is not a withholding foreign partnership, the payees of income are the partners of the partnership, provided the partners are not themselves a flow-through entity or a foreign intermediary. Irs amendment forms However, the payee is the partnership itself if the partnership is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Irs amendment forms If a partner is a foreign flow-through entity or a foreign intermediary, you apply the payee determination rules to that partner to determine the payees. Irs amendment forms Example 1. Irs amendment forms A nonwithholding foreign partnership has three partners: a nonresident alien individual; a foreign corporation; and a U. Irs amendment forms S. Irs amendment forms citizen. Irs amendment forms You make a payment of U. Irs amendment forms S. Irs amendment forms source interest to the partnership. Irs amendment forms It gives you a Form W-8IMY with which it associates Form W-8BEN from the nonresident alien; Form W-8BEN from the foreign corporation; and Form W-9 from the U. Irs amendment forms S. Irs amendment forms citizen. Irs amendment forms The partnership also gives you a complete withholding statement that enables you to associate a part of the interest payment to each partner. Irs amendment forms You must treat all three partners as the payees of the interest payment as if the payment were made directly to them. Irs amendment forms Report the payment to the nonresident alien and the foreign corporation on Forms 1042-S. Irs amendment forms Report the payment to the U. Irs amendment forms S. Irs amendment forms citizen on Form 1099-INT. Irs amendment forms Example 2. Irs amendment forms A nonwithholding foreign partnership has two partners: a foreign corporation and a nonwithholding foreign partnership. Irs amendment forms The second partnership has two partners, both nonresident alien individuals. Irs amendment forms You make a payment of U. Irs amendment forms S. Irs amendment forms source interest to the first partnership. Irs amendment forms It gives you a valid Form W-8IMY with which it associates a Form W-8BEN from the foreign corporation and a Form W-8IMY from the second partnership. Irs amendment forms In addition, Forms W-8BEN from the partners are associated with the Form W-8IMY from the second partnership. Irs amendment forms The Forms W-8IMY from the partnerships have complete withholding statements associated with them. Irs amendment forms Because you can reliably associate a part of the interest payment with the Form W-8BEN provided by the foreign corporation and the Forms W-8BEN provided by the nonresident alien individual partners as a result of the withholding statements, you must treat them as the payees of the interest. Irs amendment forms Example 3. Irs amendment forms You make a payment of U. Irs amendment forms S. Irs amendment forms source dividends to a withholding foreign partnership. Irs amendment forms The partnership has two partners, both foreign corporations. Irs amendment forms You can reliably associate the payment with a valid Form W-8IMY from the partnership on which it represents that it is a withholding foreign partnership. Irs amendment forms You must treat the partnership as the payee of the dividends. Irs amendment forms Foreign simple and grantor trust. Irs amendment forms   A trust is foreign unless it meets both of the following tests. Irs amendment forms A court within the United States is able to exercise primary supervision over the administration of the trust. Irs amendment forms One or more U. Irs amendment forms S. Irs amendment forms persons have the authority to control all substantial decisions of the trust. Irs amendment forms   In most cases, a foreign simple trust is a foreign trust that is required to distribute all of its income annually. Irs amendment forms A foreign grantor trust is a foreign trust that is treated as a grantor trust under sections 671 through 679 of the Code. Irs amendment forms   The payees of a payment made to a foreign simple trust are the beneficiaries of the trust. Irs amendment forms The payees of a payment made to a foreign grantor trust are the owners of the trust. Irs amendment forms However, the payee is the foreign simple or grantor trust itself if the trust is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Irs amendment forms If the beneficiaries or owners are themselves flow-through entities or foreign intermediaries, you apply the payee determination rules to that beneficiary or owner to determine the payees. Irs amendment forms Example. Irs amendment forms A foreign simple trust has three beneficiaries: two nonresident alien individuals and a U. Irs amendment forms S. Irs amendment forms citizen. Irs amendment forms You make a payment of interest to the foreign trust. Irs amendment forms It gives you a Form W-8IMY with which it associates Forms W-8BEN from the nonresident aliens and a Form W-9 from the U. Irs amendment forms S. Irs amendment forms citizen. Irs amendment forms The trust also gives you a complete withholding statement that enables you to associate a part of the interest payment with the forms provided by each beneficiary. Irs amendment forms You must treat all three beneficiaries as the payees of the interest payment as if the payment were made directly to them. Irs amendment forms Report the payment to the nonresident aliens on Forms 1042-S. Irs amendment forms Report the payment to the U. Irs amendment forms S. Irs amendment forms citizen on Form 1099-INT. Irs amendment forms Fiscally transparent entity. Irs amendment forms   If a reduced rate of withholding under an income tax treaty is claimed, a flow-through entity includes any entity in which the interest holder must treat the entity as fiscally transparent. Irs amendment forms The determination of whether an entity is fiscally transparent is made on an item of income basis (that is, the determination is made separately for interest, dividends, royalties, etc. Irs amendment forms ). Irs amendment forms The interest holder in an entity makes the determination by applying the laws of the jurisdiction where the interest holder is organized, incorporated, or otherwise considered a resident. Irs amendment forms An entity is considered to be fiscally transparent for the income to the extent the laws of that jurisdiction require the interest holder to separately take into account on a current basis the interest holder's share of the income, whether or not distributed to the interest holder, and the character and source of the income to the interest holder are determined as if the income was realized directly from the source that paid it to the entity. Irs amendment forms Subject to the standards of knowledge rules discussed later, you generally make the determination that an entity is fiscally transparent based on a Form W-8IMY provided by the entity. Irs amendment forms   The payees of a payment made to a fiscally transparent entity are the interest holders of the entity. Irs amendment forms Example. Irs amendment forms Entity A is a business organization organized under the laws of country X that has an income tax treaty in force with the United States. Irs amendment forms A has two interest holders, B and C. Irs amendment forms B is a corporation organized under the laws of country Y. Irs amendment forms C is a corporation organized under the laws of country Z. Irs amendment forms Both countries Y and Z have an income tax treaty in force with the United States. Irs amendment forms A receives royalty income from U. Irs amendment forms S. Irs amendment forms sources that is not effectively connected with the conduct of a trade or business in the United States. Irs amendment forms For U. Irs amendment forms S. Irs amendment forms income tax purposes, A is treated as a partnership. Irs amendment forms Country X treats A as a partnership and requires the interest holders in A to separately take into account on a current basis their respective shares of the income paid to A even if the income is not distributed. Irs amendment forms The laws of country X provide that the character and source of the income to A's interest holders are determined as if the income was realized directly from the source that paid it to A. Irs amendment forms Accordingly, A is fiscally transparent in its jurisdiction, country X. Irs amendment forms B and C are not fiscally transparent under the laws of their respective countries of incorporation. Irs amendment forms Country Y requires B to separately take into account on a current basis B's share of the income paid to A, and the character and source of the income to B is determined as if the income was realized directly from the source that paid it to A. Irs amendment forms Accordingly, A is fiscally transparent for that income under the laws of country Y, and B is treated as deriving its share of the U. Irs amendment forms S. Irs amendment forms source royalty income for purposes of the U. Irs amendment forms S. Irs amendment forms -Y income tax treaty. Irs amendment forms Country Z, on the other hand, treats A as a corporation and does not require C to take into account its share of A's income on a current basis whether or not distributed. Irs amendment forms Therefore, A is not treated as fiscally transparent under the laws of country Z. Irs amendment forms Accordingly, C is not treated as deriving its share of the U. Irs amendment forms S. Irs amendment forms source royalty income for purposes of the U. Irs amendment forms S. Irs amendment forms -Z income tax treaty. Irs amendment forms Foreign Intermediaries In most cases, if you make payments to a foreign intermediary, the payees are the persons for whom the foreign intermediary collects the payment, such as account holders or customers, not the intermediary itself. Irs amendment forms This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Irs amendment forms You may, however, treat a qualified intermediary that has assumed primary withholding responsibility for a payment as the payee, and you are not required to withhold. Irs amendment forms An intermediary is a custodian, broker, nominee, or any other person that acts as an agent for another person. Irs amendment forms A foreign intermediary is either a qualified intermediary or a nonqualified intermediary. Irs amendment forms In most cases, you determine whether an entity is a qualified intermediary or a nonqualified intermediary based on the representations the intermediary makes on Form W-8IMY. Irs amendment forms You must determine whether the customers or account holders of a foreign intermediary are U. Irs amendment forms S. Irs amendment forms or foreign persons and, if the account holder or customer is foreign, whether a reduced rate of NRA withholding applies. Irs amendment forms You make these determinations based on the foreign intermediary's Form W-8IMY and associated information and documentation. Irs amendment forms If you do not have all of the information or documentation that is required to reliably associate a payment with a payee, you must apply the presumption rules. Irs amendment forms See Documentation and Presumption Rules , later. Irs amendment forms Nonqualified intermediary. Irs amendment forms   A nonqualified intermediary (NQI) is any intermediary that is a foreign person and that is not a qualified intermediary. Irs amendment forms The payees of a payment made to an NQI are the customers or account holders on whose behalf the NQI is acting. Irs amendment forms Example. Irs amendment forms You make a payment of interest to a foreign bank that is a nonqualified intermediary. Irs amendment forms The bank gives you a Form W-8IMY and the Forms W-8BEN of two foreign persons, and a Form W-9 from a U. Irs amendment forms S. Irs amendment forms person for whom the bank is collecting the payments. Irs amendment forms The bank also associates with its Form W-8IMY a withholding statement on which it allocates the interest payment to each account holder and provides all other information required to be on the withholding statement. Irs amendment forms The account holders are the payees of the interest payment. Irs amendment forms You should report the part of the interest paid to the two foreign persons on Forms 1042-S and the part paid to the U. Irs amendment forms S. Irs amendment forms person on Form 1099-INT. Irs amendment forms Qualified intermediary. Irs amendment forms   A qualified intermediary (QI) is any foreign intermediary (or foreign branch of a U. Irs amendment forms S. Irs amendment forms intermediary) that has entered into a qualified intermediary withholding agreement (discussed later) with the IRS. Irs amendment forms You may treat a QI as a payee to the extent the QI assumes primary withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for a payment. Irs amendment forms In this situation, the QI is required to withhold the tax. Irs amendment forms You can determine whether a QI has assumed responsibility from the Form W-8IMY provided by the QI. Irs amendment forms   A payment to a QI to the extent it does not assume primary NRA withholding responsibility is considered made to the person on whose behalf the QI acts. Irs amendment forms If a QI does not assume Form 1099 reporting and backup withholding responsibility, you must report on Form 1099 and, if applicable, backup withhold as if you were making the payment directly to the U. Irs amendment forms S. Irs amendment forms person. Irs amendment forms Branches of financial institutions. Irs amendment forms   Branches of financial institutions are not permitted to operate as QIs if they are located outside of countries having approved “know-your-customer” (KYC) rules. Irs amendment forms The countries with approved KYC rules are listed on IRS. Irs amendment forms gov. Irs amendment forms QI withholding agreement. Irs amendment forms   Foreign financial institutions and foreign branches of U. Irs amendment forms S. Irs amendment forms financial institutions can enter into an agreement with the IRS to be a qualified intermediary. Irs amendment forms   A QI is entitled to certain simplified withholding and reporting rules. Irs amendment forms In general, there are three major areas whereby intermediaries with QI status are afforded such simplified treatment. Irs amendment forms   To apply for QI status, complete Form 14345, Qualified Intermediary Application, and Form SS-4, Application for Employer Identification Number. Irs amendment forms These forms, and the procedures required to obtain a QI withholding agreement are available at www. Irs amendment forms irs. Irs amendment forms gov/Businesses/Corporations/Qualified-Intermediaries-(QI). Irs amendment forms Documentation. Irs amendment forms   A QI is not required to forward documentation obtained from foreign account holders to the U. Irs amendment forms S. Irs amendment forms withholding agent from whom the QI receives a payment of U. Irs amendment forms S. Irs amendment forms source income. Irs amendment forms The QI maintains such documentation at its location and provides the U. Irs amendment forms S. Irs amendment forms withholding agent with withholding rate pools. Irs amendment forms A withholding rate pool is a payment of a single type of income that is subject to a single rate of withholding. Irs amendment forms   A QI is required to provide the U. Irs amendment forms S. Irs amendment forms withholding agent with information regarding U. Irs amendment forms S. Irs amendment forms persons subject to Form 1099 information reporting unless the QI assumes the primary obligation to do Form 1099 reporting and backup withholding. Irs amendment forms   If a QI obtains documentary evidence under the “know-your-customer” rules that apply to the QI under local law, and the documentary evidence is of a type specified in an attachment to the QI agreement, the documentary evidence remains valid until there is a change in circumstances or the QI knows the information is incorrect. Irs amendment forms This indefinite validity period rule does not apply to Forms W-8 or to documentary evidence that is not of the type specified in the attachment to the agreement. Irs amendment forms Form 1042-S reporting. Irs amendment forms   A QI is permitted to report payments made to its direct foreign account holders on a pooled basis rather than reporting payments to each direct account holder specifically. Irs amendment forms Pooled basis reporting is not available for payments to certain account holders, such as a nonqualified intermediary or a flow-through entity (discussed earlier). Irs amendment forms Collective refund procedures. Irs amendment forms   A QI may seek a refund on behalf of its direct account holders. Irs amendment forms The direct account holders, therefore, are not required to file returns with the IRS to obtain refunds, but rather may obtain them from the QI. Irs amendment forms U. Irs amendment forms S. Irs amendment forms branches of foreign banks and foreign insurance companies. Irs amendment forms   Special rules apply to a U. Irs amendment forms S. Irs amendment forms branch of a foreign bank subject to Federal Reserve Board supervision or a foreign insurance company subject to state regulatory supervision. Irs amendment forms If you agree to treat the branch as a U. Irs amendment forms S. Irs amendment forms person, you may treat the branch as a U. Irs amendment forms S. Irs amendment forms payee for a payment subject to NRA withholding provided you receive a Form W-8IMY from the U. Irs amendment forms S. Irs amendment forms branch on which the agreement is evidenced. Irs amendment forms If you treat the branch as a U. Irs amendment forms S. Irs amendment forms payee, you are not required to withhold. Irs amendment forms Even though you agree to treat the branch as a U. Irs amendment forms S. Irs amendment forms person, you must report the payment on Form 1042-S. Irs amendment forms   A financial institution organized in a U. Irs amendment forms S. Irs amendment forms possession is treated as a U. Irs amendment forms S. Irs amendment forms branch. Irs amendment forms The special rules discussed in this section apply to a possessions financial institution. Irs amendment forms   If you are paying a U. Irs amendment forms S. Irs amendment forms branch an amount that is not subject to NRA withholding, treat the payment as made to a foreign person, irrespective of any agreement to treat the branch as a U. Irs amendment forms S. Irs amendment forms person for amounts subject to NRA withholding. Irs amendment forms Consequently, amounts not subject to NRA withholding that are paid to a U. Irs amendment forms S. Irs amendment forms branch are not subject to Form 1099 reporting or backup withholding. Irs amendment forms   Alternatively, a U. Irs amendment forms S. Irs amendment forms branch may provide you with a Form W-8IMY with which it associates the documentation of the persons on whose behalf it acts. Irs amendment forms In this situation, the payees are the persons on whose behalf the branch acts provided you can reliably associate the payment with valid documentation from those persons. Irs amendment forms See Nonqualified Intermediaries under  Documentation, later. Irs amendment forms   If the U. Irs amendment forms S. Irs amendment forms branch does not provide you with a Form W-8IMY, then you should treat a payment subject to NRA withholding as made to the foreign person of which the branch is a part and the income as effectively connected with the conduct of a trade or business in the United States. Irs amendment forms Withholding foreign partnership and foreign trust. Irs amendment forms   A withholding foreign partnership (WP) is any foreign partnership that has entered into a WP withholding agreement with the IRS and is acting in that capacity. Irs amendment forms A withholding foreign trust (WT) is a foreign simple or grantor trust that has entered into a WT withholding agreement with the IRS and is acting in that capacity. Irs amendment forms   A WP or WT may act in that capacity only for payments of amounts subject to NRA withholding that are distributed to, or included in the distributive share of, its direct partners, beneficiaries, or owners. Irs amendment forms A WP or WT acting in that capacity must assume NRA withholding responsibility for these amounts. Irs amendment forms You may treat a WP or WT as a payee if it has provided you with documentation (discussed later) that represents that it is acting as a WP or WT for such amounts. Irs amendment forms WP and WT withholding agreements. Irs amendment forms   The WP and WT withholding agreements and the application procedures for the agreements are in Revenue Procedure 2003-64. Irs amendment forms Also see the following items. Irs amendment forms Revenue Procedure 2004-21. Irs amendment forms Revenue Procedure 2005-77. Irs amendment forms Employer identification number (EIN). Irs amendment forms   A completed Form SS-4 must be submitted with the application for being a WP or WT. Irs amendment forms The WP or WT will be assigned a WP-EIN or WT-EIN to be used only when acting in that capacity. Irs amendment forms Documentation. Irs amendment forms   A WP or WT must provide you with a Form W-8IMY that certifies that the WP or WT is acting in that capacity and a written statement identifying the amounts for which it is so acting. Irs amendment forms The statement is not required to contain withholding rate pool information or any information relating to the identity of a direct partner, beneficiary, or owner. Irs amendment forms The Form W-8IMY must contain the WP-EIN or WT-EIN. Irs amendment forms Foreign Persons A payee is subject to NRA withholding only if it is a foreign person. Irs amendment forms A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate, and any other person that is not a U. Irs amendment forms S. Irs amendment forms person. Irs amendment forms It also includes a foreign branch of a U. Irs amendment forms S. Irs amendment forms financial institution if the foreign branch is a qualified intermediary. Irs amendment forms In most cases, the U. Irs amendment forms S. Irs amendment forms branch of a foreign corporation or partnership is treated as a foreign person. Irs amendment forms Nonresident alien. Irs amendment forms   A nonresident alien is an individual who is not a U. Irs amendment forms S. Irs amendment forms citizen or a resident alien. Irs amendment forms A resident of a foreign country under the residence article of an income tax treaty is a nonresident alien individual for purposes of withholding. Irs amendment forms Married to U. Irs amendment forms S. Irs amendment forms citizen or resident alien. Irs amendment forms   Nonresident alien individuals married to U. Irs amendment forms S. Irs amendment forms citizens or resident aliens may choose to be treated as resident aliens for certain income tax purposes. Irs amendment forms However, these individuals are still subject to the NRA withholding rules that apply to nonresident aliens for all income except wages. Irs amendment forms Wages paid to these individuals are subject to graduated withholding. Irs amendment forms See Wages Paid to Employees—Graduated Withholding . Irs amendment forms Resident alien. Irs amendment forms   A resident alien is an individual who is not a citizen or national of the United States and who meets either the green card test or the substantial presence test for the calendar year. Irs amendment forms Green card test. Irs amendment forms An alien is a resident alien if the individual was a lawful permanent resident of the United States at any time during the calendar year. Irs amendment forms This is known as the green card test because these aliens hold immigrant visas (also known as green cards). Irs amendment forms Substantial presence test. Irs amendment forms An alien is considered a resident alien if the individual meets the substantial presence test for the calendar year. Irs amendment forms Under this test, the individual must be physically present in the United States on at least: 31 days during the current calendar year, and 183 days during the current year and the 2 preceding years, counting all the days of physical presence in the current year, but only 1/3 the number of days of presence in the first preceding year, and only 1/6 the number of days in the second preceding year. Irs amendment forms   In most cases, the days the alien is in the United States as a teacher, student, or trainee on an “F,” “J,” “M,” or “Q” visa are not counted. Irs amendment forms This exception is for a limited period of time. Irs amendment forms   For more information on resident and nonresident status, the tests for residence, and the exceptions to them, see Publication 519. Irs amendment forms Note. Irs amendment forms   If your employee is late in notifying you that his or her status changed from nonresident alien to resident alien, you may have to make an adjustment to Form 941 if that employee was exempt from withholding of social security and Medicare taxes as a nonresident alien. Irs amendment forms For more information on making adjustments, see chapter 13 of Publication 15 (Circular E). Irs amendment forms Resident of a U. Irs amendment forms S. Irs amendment forms possession. Irs amendment forms   A bona fide resident of Puerto Rico, the U. Irs amendment forms S. Irs amendment forms Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands (CNMI), or American Samoa who is not a U. Irs amendment forms S. Irs amendment forms citizen or a U. Irs amendment forms S. Irs amendment forms national is treated as a nonresident alien for the withholding rules explained here. Irs amendment forms A bona fide resident of a possession is someone who: Meets the presence test, Does not have a tax home outside the possession, and Does not have a closer connection to the United States or to a foreign country than to the possession. Irs amendment forms   For more information, see Publication 570, Tax Guide for Individuals With Income From U. Irs amendment forms S. Irs amendment forms Possessions. Irs amendment forms Foreign corporations. Irs amendment forms   A foreign corporation is one that does not fit the definition of a domestic corporation. Irs amendment forms A domestic corporation is one that was created or organized in the United States or under the laws of the United States, any of its states, or the District of Columbia. Irs amendment forms Guam or Northern Mariana Islands corporations. Irs amendment forms   A corporation created or organized in, or under the laws of, Guam or the CNMI is not considered a foreign corporation for the purpose of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons; and At least 20% of the corporation's gross income is derived from sources within Guam or the CNMI for the 3-year period ending with the close of the preceding tax year of the corporation (or the period the corporation has been in existence, if less). Irs amendment forms Note. Irs amendment forms   The provisions discussed below under U. Irs amendment forms S. Irs amendment forms Virgin Islands and American Samoa corporations will apply to Guam or CNMI corporations when an implementing agreement is in effect between the United States and that possession. Irs amendment forms U. Irs amendment forms S. Irs amendment forms Virgin Islands and American Samoa corporations. Irs amendment forms   A corporation created or organized in, or under the laws of, the U. Irs amendment forms S. Irs amendment forms Virgin Islands or American Samoa is not considered a foreign corporation for the purposes of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons, At least 65% of the corporation's gross income is effectively connected with the conduct of a trade or business in the U. Irs amendment forms S. Irs amendment forms Virgin Islands, American Samoa, Guam, the CNMI, or the United States for the 3-year period ending with the close of the tax year of the corporation (or the period the corporation or any predecessor has been in existence, if less), and No substantial part of the income of the corporation is used, directly or indirectly, to satisfy obligations to a person who is not a bona fide resident of the U. Irs amendment forms S. Irs amendment forms Virgin Islands, American Samoa, Guam, the CNMI, or the United States. Irs amendment forms Foreign private foundations. Irs amendment forms   A private foundation that was created or organized under the laws of a foreign country is a foreign private foundation. Irs amendment forms Gross investment income from sources within the United States paid to a qualified foreign private foundation is subject to NRA withholding at a 4% rate (unless exempted by a treaty) rather than the ordinary statutory 30% rate. Irs amendment forms Other foreign organizations, associations, and charitable institutions. Irs amendment forms   An organization may be exempt from income tax under section 501(a) of the Internal Revenue Code even if it was formed under foreign law. Irs amendment forms In most cases, you do not have to withhold tax on payments of income to these foreign tax-exempt organizations unless the IRS has determined that they are foreign private foundations. Irs amendment forms   Payments to these organizations, however, must be reported on Form 1042-S, even though no tax is withheld. Irs amendment forms   You must withhold tax on the unrelated business income (as described in Publication 598, Tax on Unrelated Business Income of Exempt Organizations) of foreign tax-exempt organizations in the same way that you would withhold tax on similar income of nonexempt organizations. Irs amendment forms U. Irs amendment forms S. Irs amendment forms branches of foreign persons. Irs amendment forms   In most cases, a payment to a U. Irs amendment forms S. Irs amendment forms branch of a foreign person is a payment made to the foreign person. Irs amendment forms However, you may treat payments to U. Irs amendment forms S. Irs amendment forms branches of foreign banks and foreign insurance companies (discussed earlier) that are subject to U. Irs amendment forms S. Irs amendment forms regulatory supervision as payments made to a U. Irs amendment forms S. Irs amendment forms person, if you and the U. Irs amendment forms S. Irs amendment forms branch have agreed to do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY. Irs amendment forms For this purpose, a financial institution organized under the laws of a U. Irs amendment forms S. Irs amendment forms possession is treated as a U. Irs amendment forms S. Irs amendment forms branch. Irs amendment forms Documentation In most cases, you must withhold 30% from the gross amount paid to a foreign payee unless you can reliably associate the payment with valid documentation that establishes either of the following. Irs amendment forms The payee is a U. Irs amendment forms S. Irs amendment forms person. Irs amendment forms The payee is a foreign person that is the beneficial owner of the income and is entitled to a reduced rate of withholding. Irs amendment forms In most cases, you must get the documentation before you make the payment. Irs amendment forms The documentation is not valid if you know, or have reason to know, that it is unreliable or incorrect. Irs amendment forms See Standards of Knowledge , later. Irs amendment forms If you cannot reliably associate a payment with valid documentation, you must use the presumption rules discussed later. Irs amendment forms For example, if you do not have documentation or you cannot determine the part of a payment that is allocable to specific documentation, you must use the presumption rules. Irs amendment forms The specific types of documentation are discussed in this section. Irs amendment forms However, see Withholding on Specific Income , later, as well as the instructions to the particular forms. Irs amendment forms As the withholding agent, you also may want to see the Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY. Irs amendment forms Section 1446 withholding. Irs amendment forms   Under section 1446 of the Code, a partnership must withhold tax on its effectively connected income allocable to a foreign partner. Irs amendment forms In most cases, a partnership determines if a partner is a foreign partner and the partner's tax classification based on the withholding certificate provided by the partner. Irs amendment forms This is the same documentation that is filed for NRA withholding, but may require additional information as discussed under each of the forms in this section. Irs amendment forms Joint owners. Irs amendment forms    If you make a payment to joint owners, you need to get documentation from each owner. Irs amendment forms Form W-9. Irs amendment forms   In most cases, you can treat the payee as a U. Irs amendment forms S. Irs amendment forms person if the payee gives you a Form W-9. Irs amendment forms The Form W-9 can be used only by a U. Irs amendment forms S. Irs amendment forms person and must contain the payee's taxpayer identification number (TIN). Irs amendment forms If there is more than one owner, you may treat the total amount as paid to a U. Irs amendment forms S. Irs amendment forms person if any one of the owners gives you a Form W-9. Irs amendment forms See U. Irs amendment forms S. Irs amendment forms Taxpayer Identification Numbers , later. Irs amendment forms U. Irs amendment forms S. Irs amendment forms persons are not subject to NRA withholding, but may be subject to Form 1099 reporting and backup withholding. Irs amendment forms Form W-8. Irs amendment forms   In most cases, a foreign payee of the income should give you a form in the Form W-8 series. Irs amendment forms Until further notice, you can rely upon Forms W-8 that contain a P. Irs amendment forms O. Irs amendment forms box as a permanent residence address provided you do not know, or have reason to know, that the person providing the form is a U. Irs amendment forms S. Irs amendment forms person and that a street address is available. Irs amendment forms You may rely on Forms W-8 for which there is a U. Irs amendment forms S. Irs amendment forms mailing address provided you received the form prior to December 31, 2001. Irs amendment forms   If certain requirements are met, the foreign person can give you documentary evidence, rather than a Form W-8. Irs amendment forms You can rely on documentary evidence in lieu of a Form W-8 for a payment made in a U. Irs amendment forms S. Irs amendment forms possession. Irs amendment forms Other documentation. Irs amendment forms   Other documentation may be required to claim an exemption from, or a reduced rate of, withholding on pay for personal services. Irs amendment forms The nonresident alien individual may have to give you a Form W-4 or a Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. Irs amendment forms These forms are discussed in Pay for Personal Services Performed under Withholding on Specific Income. Irs amendment forms Beneficial Owners If all the appropriate requirements have been established on a Form W-8BEN, W-8ECI, W-8EXP or, if applicable, on documentary evidence, you may treat the payee as a foreign beneficial owner. Irs amendment forms Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Irs amendment forms   This form is used by a foreign person to: Establish foreign status; Claim that such person is the beneficial owner of the income for which the form is being furnished or a partner in a partnership subject to section 1446 withholding; and If applicable, claim a reduced rate of, or exemption from, withholding under an income tax treaty. Irs amendment forms   Form W-8BEN also may be used to claim that the foreign person is exempt from Form 1099 reporting and backup withholding for income that is not subject to NRA withholding. Irs amendment forms For example, a foreign person may provide a Form W-8BEN to a broker to establish that the gross proceeds from the sale of securities are not subject to Form 1099 reporting or backup withholding. Irs amendment forms Claiming treaty benefits. Irs amendment forms   You may apply a reduced rate of withholding to a foreign person that provides a Form W-8BEN claiming a reduced rate of withholding under an income tax treaty only if the person provides a U. Irs amendment forms S. Irs amendment forms TIN and certifies that: It is a resident of a treaty country; It is the beneficial owner of the income; If it is an entity, it derives the income within the meaning of section 894 of the Internal Revenue Code (it is not fiscally transparent); and It meets any limitation on benefits provision contained in the treaty, if applicable. Irs amendment forms   If the foreign beneficial owner claiming a treaty benefit is related to you, the foreign beneficial owner also must certify on Form W-8BEN that it will file Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), if the amount subject to NRA withholding received during a calendar year exceeds, in the aggregate, $500,000. Irs amendment forms   An entity derives income for which it is claiming treaty benefits only if the entity is not treated as fiscally transparent for that income. Irs amendment forms See Fiscally transparent entity discussed earlier under Flow-Through Entities. Irs amendment forms   Limitations on benefits provisions generally prohibit third country residents from obtaining treaty benefits. Irs amendment forms For example, a foreign corporation may not be entitled to a reduced rate of withholding unless a minimum percentage of its owners are citizens or residents of the United States or the treaty country. Irs amendment forms   The exemptions from, or reduced rates of, U. Irs amendment forms S. Irs amendment forms tax vary under each treaty. Irs amendment forms You must check the provisions of the tax treaty that apply. Irs amendment forms Tables at the end of this publication show the countries with which the United States has income tax treaties and the rates of withholding that apply in cases where all conditions of the particular treaty articles are satisfied. Irs amendment forms   If you know, or have reason to know, that an owner of income is not eligible for treaty benefits claimed, you must not apply the treaty rate. Irs amendment forms You are not, however, responsible for misstatements on a Form W-8, documentary evidence, or statements accompanying documentary evidence for which you did not have actual knowledge, or reason to know, that the statements were incorrect. Irs amendment forms Exceptions to TIN requirement. Irs amendment forms   A foreign person does not have to provide a TIN to claim a reduced rate of withholding under a treaty if the requirements for the following exceptions are met. Irs amendment forms Income from marketable securities (discussed next). Irs amendment forms Unexpected payments to an individual (discussed under U. Irs amendment forms S. Irs amendment forms Taxpayer Identification Numbers ). Irs amendment forms Marketable securities. Irs amendment forms   A Form W-8BEN provided to claim treaty benefits does not need a U. Irs amendment forms S. Irs amendment forms TIN if the foreign beneficial owner is claiming the benefits on income from marketable securities. Irs amendment forms For this purpose, income from a marketable security consists of the following items. Irs amendment forms Dividends and interest from stocks and debt obligations that are actively traded. Irs amendment forms Dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (mutual fund). Irs amendment forms Dividends, interest, or royalties from units of beneficial interest in a unit investment trust that are (or were upon issuance) publicly offered and are registered with the SEC under the Securities Act of 1933. Irs amendment forms Income related to loans of any of the above securities. Irs amendment forms Offshore accounts. Irs amendment forms   If a payment is made outside the United States to an offshore account, a payee may give you documentary evidence, rather than Form W-8BEN. Irs amendment forms   In most cases, a payment is made outside the United States if you complete the acts necessary to effect the payment outside the United States. Irs amendment forms However, an amount paid by a bank or other financial institution on a deposit or account usually will be treated as paid at the branch or office where the amount is credited. Irs amendment forms An offshore account is an account maintained at an office or branch of a U. Irs amendment forms S. Irs amendment forms or foreign bank or other financial institution at any location outside the United States. Irs amendment forms   You may rely on documentary evidence given to you by a nonqualified intermediary or a flow-through entity with its Form W-8IMY. Irs amendment forms This rule applies even though you make the payment to a nonqualified intermediary or flow-through entity in the United States. Irs amendment forms In most cases, the nonqualified intermediary or flow-through entity that gives you documentary evidence also will have to give you a withholding statement, discussed later. Irs amendment forms Documentary evidence. Irs amendment forms   You may apply a reduced rate of withholding to income from marketable securities (discussed earlier) paid outside the United States to an offshore account if the beneficial owner gives you documentary evidence in place of a Form W-8BEN. Irs amendment forms To claim treaty benefits, the documentary evidence must be one of the following: A certificate of residence that: Is issued by a tax official of the treaty country of which the foreign beneficial owner claims to be a resident, States that the person has filed its most recent income tax return as a resident of that country, and Is issued within 3 years prior to being presented to you. Irs amendment forms Documentation for an individual that: Includes the individual's name, address, and photograph, Is an official document issued by an authorized governmental body, and Is issued no more than 3 years prior to being presented to you. Irs amendment forms Documentation for an entity that: Includes the name of the entity, Includes the address of its principal office in the treaty country, and Is an official document issued by an authorized governmental body. Irs amendment forms In addition to the documentary evidence, a foreign beneficial owner that is an entity must provide a statement that it derives the income for which it claims treaty benefits and that it meets one or more of the conditions set forth in a limitation on benefits article, if any, (or similar provision) contained in the applicable treaty. Irs amendment forms Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States. Irs amendment forms   This form is used by a foreign person to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim that the income is effectively connected with the conduct of a trade or business in the United States. Irs amendment forms (See Effectively Connected Income , later. Irs amendment forms )   Effectively connected income for which a valid Form W-8ECI has been provided is generally not subject to NRA withholding. Irs amendment forms   If a partner submits this form to a partnership, the income claimed to be effectively connected with the conduct of a U. Irs amendment forms S. Irs amendment forms trade or business is subject to withholding under section 1446. Irs amendment forms If the partner has made, or will make, an election under section 871(d) or 882(d), the partner must submit Form W-8ECI, and attach a copy of the election, or a statement of intent to elect, to the form. Irs amendment forms    If the partner's only effectively connected income is the income allocated from the partnership and the partner is not making the election under section 871(d) or 882(d), the partner should provide Form W-8BEN to the partnership. Irs amendment forms Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding. Irs amendment forms   This form is used by a foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private foundation, or government of a U. Irs amendment forms S. Irs amendment forms possession to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim a reduced rate of, or an exemption from, withholding as such an entity. Irs amendment forms   If the government or organization is a partner in a partnership carrying on a trade or business in the United States, the effectively connected income allocable to the partner is subject to withholding under section 1446. Irs amendment forms   See Foreign Governments and Certain Other Foreign Organizations , later. Irs amendment forms Foreign Intermediaries and Foreign Flow-Through Entities Payments made to a foreign intermediary or foreign flow-through entity are treated as made to the payees on whose behalf the intermediary or entity acts. Irs amendment forms The Form W-8IMY provided by a foreign intermediary or flow-through entity must be accompanied by additional information for you to be able to reliably associate the payment with a payee. Irs amendment forms The additional information required depends on the type of intermediary or flow-through entity and the extent of the withholding responsibilities it assumes. Irs amendment forms Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U. Irs amendment forms S. Irs amendment forms Branches for United States Tax Withholding. Irs amendment forms   This form is used by foreign intermediaries and foreign flow-through entities, as well as certain U. Irs amendment forms S. Irs amendment forms branches, to: Represent that a foreign person is a qualified intermediary or nonqualified intermediary, Represent, if applicable, that the qualified intermediary is assuming primary NRA withholding responsibility and/or primary Form 1099 reporting and backup withholding responsibility, Represent that a foreign partnership or a foreign simple or grantor trust is a withholding foreign partnership or a withholding foreign trust, Represent that a foreign flow-through entity is a nonwithholding foreign partnership, or a nonwithholding foreign trust and that the income is not effectively connected with the conduct of a trade or business in the United States, Represent that the provider is a U. Irs amendment forms S. Irs amendment forms branch of a foreign bank or insurance company and either is agreeing to be treated as a U. Irs amendment forms S. Irs amendment forms person or is transmitting documentation of the persons on whose behalf it is acting, or Represent that, for purposes of section 1446, it is an upper-tier foreign partnership or a foreign grantor trust and that the form is being used to transmit the required documentation. Irs amendment forms For information on qualifying as an upper-tier foreign partnership, see Regulations section 1. Irs amendment forms 1446-5. Irs amendment forms Qualified Intermediaries In most cases, a QI is any foreign intermediary that has entered into a QI withholding agreement (discussed earlier) with the IRS. Irs amendment forms A foreign intermediary that has received a QI employer identification number (QI-EIN) may represent on Form W-8IMY that it is a QI before it receives a fully executed agreement. Irs amendment forms The intermediary can claim that it is a QI until the IRS revokes its QI-EIN. Irs amendment forms The IRS will revoke a QI-EIN if the QI agreement is not executed and returned to the IRS within a reasonable period of time after the agreement was sent to the intermediary for signature. Irs amendment forms Responsibilities. Irs amendment forms   Payments made to a QI that does not assume NRA withholding responsibility are treated as paid to its account holders and customers. Irs amendment forms However, a QI is not required to provide you with documentation it obtains from its foreign account holders and customers. Irs amendment forms Instead, it provides you with a withholding statement that contains withholding rate pool information. Irs amendment forms A withholding rate pool is a payment of a single type of income, determined in accordance with the categories of income reported on Form 1042-S that is subject to a single rate of withholding. Irs amendment forms A qualified intermediary is required to provide you with information regarding U. Irs amendment forms S. Irs amendment forms persons subject to Form 1099 reporting and to provide you withholding rate pool information separately for each such U. Irs amendment forms S. Irs amendment forms person unless it has assumed Form 1099 reporting and backup withholding responsibility. Irs amendment forms For the alternative procedure for providing rate pool information for U. Irs amendment forms S. Irs amendment forms non-exempt persons, see the Form W-8IMY instructions. Irs amendment forms   The withholding statement must: Designate those accounts for which it acts as a qualified intermediary, Designate those accounts for which it assumes primary NRA withholding responsibility and/or primary Form 1099 and backup withholding responsibility, and Provide sufficient information for you to allocate the payment to a withholding rate pool. Irs amendment forms   The extent to which you must have withholding rate pool information depends on the withholding and reporting obligations assumed by the QI. Irs amendment forms Primary responsibility not assumed. Irs amendment forms   If a QI does not assume primary NRA withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for the payment, you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to each withholding rate pool for foreign payees. Irs amendment forms Unless the alternative procedure applies, the qualified intermediary must provide you with a separate withholding rate pool for each U. Irs amendment forms S. Irs amendment forms person subject to Form 1099 reporting and/or backup withholding. Irs amendment forms The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Irs amendment forms Primary NRA withholding responsibility assumed. Irs amendment forms   If you make a payment to a QI that assumes primary NRA withholding responsibility (but not primary Form 1099 reporting and backup withholding responsibility), you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to the withholding rate pool for which the QI assumes primary NRA withholding responsibility and the part of the payment attributable to withholding rate pools for each U. Irs amendment forms S. Irs amendment forms person, unless the alternative procedure applies, subject to Form 1099 reporting and/or backup withholding. Irs amendment forms The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Irs amendment forms Primary NRA and Form 1099 responsibility assumed. Irs amendment forms   If you make a payment to a QI that assumes both primary NRA withholding responsibility and primary Form 1099 reporting and backup withholding responsibility, you can reliably associate a payment with valid documentation provided that you receive a valid Form W-8IMY. Irs amendment forms It is not necessary to associate the payment with withholding rate pools. Irs amendment forms Example. Irs amendment forms You make a payment of dividends to a QI. Irs amendment forms It has five customers: two are foreign persons who have provided documentation entitling them to a 15% rate of withholding on dividends; two are foreign persons subject to a 30% rate of withholding on dividends; and one is a U. Irs amendment forms S. Irs amendment forms individual who provides it with a Form W-9. Irs amendment forms Each customer is entitled to 20% of the dividend payment. Irs amendment forms The QI does not assume any primary withholding responsibility. Irs amendment forms The QI gives you a Form W-8IMY with which it associates the Form W-9 and a withholding statement that allocates 40% of the dividend to a 15% withholding rate pool, 40% to a 30% withholding rate pool, and 20% to the U. Irs amendment forms S. Irs amendment forms individual. Irs amendment forms You should report on Forms 1042-S 40% of the payment as made to a 15% rate dividend pool and 40% of the payment as made to a 30% rate dividend pool. Irs amendment forms The part of the payment allocable to the U. Irs amendment forms S. Irs amendment forms individual (20%) is reportable on Form 1099-DIV. Irs amendment forms Smaller partnerships and trusts. Irs amendment forms   A QI may apply special rules to a smaller partnership or trust (Joint Account Provision) only if the partnership or trust meets the following conditions. Irs amendment forms It is a foreign partnership or foreign simple or grantor trust. Irs amendment forms It is a direct account holder of the QI. Irs amendment forms It does not have any partner, beneficiary, or owner that is a U. Irs amendment forms S. Irs amendment forms person or a pass- through partner, beneficiary, or owner. Irs amendment forms   For information on these rules, see section 4A. Irs amendment forms 01 of the QI agreement. Irs amendment forms This is found in Appendix 3 of Revenue Procedure 2003-64. Irs amendment forms Also see Revenue Procedure 2004-21. Irs amendment forms Related partnerships and trusts. Irs amendment forms    A QI may apply special rules to a related partnership or trust only if the partnership or trust meets the following conditions. Irs amendment forms It is a foreign partnership or foreign simple or grantor trust. Irs amendment forms It is either: A direct account holder of the QI, or An indirect account holder of the QI that is a direct partner, beneficiary, or owner of a partnership or trust to which the QI has applied this rule. Irs amendment forms For information on these rules, see section 4A. Irs amendment forms 02 of the QI agreement. Irs amendment forms This is found in Appendix 3 of Revenue Procedure 2003-64. Irs amendment forms Also see Revenue Procedure 2005-77. Irs amendment forms Nonqualified Intermediaries If you are making a payment to an NQI, foreign flow-through entity, or U. Irs amendment forms S. Irs amendment forms branch that is using Form W-8IMY to transmit information about the branch's account holders or customers, you can treat the payment (or a part of the payment) as reliably associated with valid documentation from a specific payee only if, prior to making the payment: You can allocate the payment to a valid Form W-8IMY, You can reliably determine how much of the payment relates to valid documentation provided by a payee (a person that is not itself a foreign intermediary, flow- through entity, or U. Irs amendment forms S. Irs amendment forms branch), and You have sufficient information to report the payment on Form 1042-S or Form 1099, if reporting is required. Irs amendment forms The NQI, flow-through entity, or U. Irs amendment forms S. Irs amendment forms branch must give you certain information on a withholding statement that is associated with the Form W-8IMY. Irs amendment forms A withholding statement must be updated to keep the information accurate prior to each payment. Irs amendment forms Withholding statement. Irs amendment forms   In most cases, a withholding statement must contain the following information. Irs amendment forms The name, address, and TIN (if any, or if required) of each person for whom documentation is provided. Irs amendment forms The type of documentation (documentary evidence, Form W-8, or Form W-9) for every person for whom documentation has been provided. Irs amendment forms The status of the person for whom the documentation has been provided, such as whether the person is a U. Irs amendment forms S. Irs amendment forms exempt recipient (U. Irs amendment forms S. Irs amendment forms person exempt from Form 1099 reporting), U. Irs amendment forms S. Irs amendment forms non-exempt recipient (U. Irs amendment forms S. Irs amendment forms person subject to Form 1099 reporting), or a foreign person. Irs amendment forms For a foreign person, the statement must indicate whether the person is a beneficial owner or a foreign intermediary, flow-through entity, or a U. Irs amendment forms S. Irs amendment forms branch. Irs amendment forms The type of recipient the person is, based on the recipient codes used on Form 1042-S. Irs amendment forms Information allocating each payment, by income type, to each payee (including U. Irs amendment forms S. Irs amendment forms exempt and U. Irs amendment forms S. Irs amendment forms non-exempt recipients) for whom documentation has been provided. Irs amendment forms The rate of withholding that applies to each foreign person to whom a payment is allocated. Irs amendment forms A foreign payee's country of residence. Irs amendment forms If a reduced rate of withholding is claimed, the basis for a reduced rate of withholding (for example, portfolio interest, treaty benefit, etc. Irs amendment forms ). Irs amendment forms In the case of treaty benefits claimed by entities, whether the applicable limitation on benefits statement and the statement that the foreign person derives the income for which treaty benefits are claimed, have been made. Irs amendment forms The name, address, and TIN (if any) of any other NQI, flow-through entity, or U. Irs amendment forms S. Irs amendment forms branch from which the payee will directly receive a payment. Irs amendment forms Any other information a withholding agent requests to fulfill its reporting and withholding obligations. Irs amendment forms Alternative procedure. Irs amendment forms   Under this alternative procedure the NQI can give you the information that allocates each payment to each foreign and U. Irs amendment forms S. Irs amendment forms exempt recipient by January 31 following the calendar year of payment, rather than prior to the payment being made as otherwise required. Irs amendment forms To take advantage of this procedure, the NQI must: (a) inform you, on its withholding statement, that it is using the alternative procedure; and (b) obtain your consent. Irs amendment forms You must receive the withholding statement with all the required information (other than item 5) prior to making the payment. Irs amendment forms    This alternative procedure cannot be used for payments to U. Irs amendment forms S. Irs amendment forms non-exempt recipients. Irs amendment forms Therefore, an NQI must always provide you with allocation information for all U. Irs amendment forms S. Irs amendment forms non-exempt recipients prior to a payment being made. Irs amendment forms Pooled withholding information. Irs amendment forms   If an NQI uses the alternative procedure, it must provide you with withholding rate pool information, as opposed to individual allocation information, prior to the payment of a reportable amount. Irs amendment forms A withholding rate pool is a payment of a single type of income (as determined by the income categories on Form 1042-S) that is subject to a single rate of withholding. Irs amendment forms For example, an NQI that has foreign account holders receiving royalties and dividends, both subject to the 15% rate, will provide you with information for two withholding rate pools (one for royalties and one for dividends). Irs amendment forms The NQI must provide you with the payee specific allocation information (information allocating each payment to each payee) by January 31 following the calendar year of payment. Irs amendment forms Failure to provide allocation information. Irs amendment forms   If an NQI fails to provide you with the payee specific allocation information for a withholding rate pool by January 31, you must not apply the alternative procedure to any of the NQI's withholding rate pools from that date forward. Irs amendment forms You must treat the payees as undocumented and apply the presumption rules, discussed later in Presumption Rules . Irs amendment forms An NQI is deemed to have f