Articles and Tax Tips

There is quite a bit of confusion about whether or not it is acceptable to accept Forms W-8 from Non-Resident Alien (NRA) Payees. As such, in this week's subscriber only tax tip let's take a more in-depth look at the electronically submitted Form W-8.

We have found that there is a fair amount of confusion regarding the meaning of the term "effectively connected income." Given that identifying such income is crucial in terms of properly documenting and reporting certain Non-Resident Alien payees let's take a closer look at what this term means.

There are two primary tests for determining resident alien status under U.S. tax residency rules. This week let's identify and look at each of these tests as follows:

Late last week the IRS released two new draft forms: one of the W-8BEN and the other the W-9 (provided below with it's instructions). This week we compare this new draft Form W-9 to the current Form W-9; pointing out some of the key distinctions (including those related to the FATCA final regulations released in January) which will impact your compliance requirements.

On May 15th the IRS announced the dates it will be closed this summer as a result of budgetary cutbacks (sequester). Take note of the dates provided below as on these dates all IRS offices, including; all toll-free hotlines, the Taxpayer Advocate Service, and the agency’s nearly 400 taxpayer assistance centers nationwide - will be closed. 

With filing season winding down for most organizations this is the time of the year that we often get questions regarding how long your AP department should hold onto previous year's filed Forms 1099 and other such related records. In short there are two schools of thought on this issue, however this is what we recommend that you do...

In this week's tax tip we will take a look at the steps you need to take when you make a mistake in reporting your name and/or taxpayer identification number (TIN). That's right this week it is about the dreaded payer reporting error rather than the more common need to correct mistakenly filed payee information. Here is what you should do...