Articles and Tax Tips

Gathering documentation is critical to your compliance policy; especially when it comes to differentiating between the U.S. Person and a Non-Resident Alien. Let's review the basic steps in determining tax residency and the key question of payment sourcing in order to establish exactly how you should report a particular payment and payee.

You hire a group of non-US payees that performed their US event, then practiced for their foreign event in the US.  Is the practice for the foreign event US source income or non-US source income?

The goods vs. services reporting debate in terms of separating out the one from the other when payment for each is mixed has long since been a plague upon AP compliance and filing efforts. As such, here is a simple question that will go a long way toward making your job easier.

This fact pattern is based upon a real world proposed penalty notice set of facts from one of our clients. See if you can come up with an argument to request a waiver. Then read on for our recommended course of action, and learn why the most common argument for a waiver that will likely jump out at you may not be the best one.

The Facts:

Though Non Resident Alien Reporting, FATCA, and misclassified workers are currently prime areas of IRS enforcement focus please note that reimbursements and fringe benefit payments also remain one of your most important compliance issues in terms of avoiding mistakes that can lead to penalty or audit. Let's take a further look here at reimbursements.

The tax treatment of cooperatives traps up many an unwary filer. In particular this is because there is an interplay between federal and individual state laws that can cause further confusion. As such, here are a few tips for handling cooperative reporting:

You sign up a new vendor, let's say a medical service provider, and send them a Form W-9. Sounds simple enough. But, when you get back the completed W-9 there is a company name on line one and a list of several dozen people that are a d/b/a of the company name on line two who are all under the same TIN.  To whom should you report?