IMPORTANT INFORMATION FOR THE LIVE PROGRAM This program is approved for 2 CPE credit hours. To earn credit you must: • Participate in the program on your own computer connection (no sharing) – if you need to register additional people, please call customer service at 1-800-926-7926 x10 (or 404-881-1141 x10). Strafford accepts American Express, Visa, MasterCard, Discover. U.S. Partnerships With Foreign Partners: Navigating Withholding, Informational Reporting and Payment Requirements WEDNESDAY, OCTOBER 4, 2017, 1:00-2:50 pm Eastern FOR LIVE PROGRAM ONLY WHO TO CONTACT DURING THE LIVE EVENT For Additional Registrations: -Call Strafford Customer Service 1-800-926-7926 x10 (or 404-881-1141 x10) For Assistance During the Live Program: -On the web, use the chat box at the bottom left of the screen If you get disconnected during the program, you can simply log in using your original instructions and PIN. • Listen on-line via your computer speakers. • Respond to five prompts during the program plus a single verification code. You will have to write down only the final verification code on the attestation form, which will be emailed to registered attendees. • To earn full credit, you must remain connected for the entire program.
Transcript
IMPORTANT INFORMATION FOR THE LIVE PROGRAM
This program is approved for 2 CPE credit hours. To earn credit you must:
• Participate in the program on your own computer connection (no sharing) – if you need to registeradditional people, please call customer service at 1-800-926-7926 x10 (or 404-881-1141 x10). Straffordaccepts American Express, Visa, MasterCard, Discover.
• Listen on-line via your computer speakers.
• Respond to five prompts during the program plus a single verification code. You will have to writedown only the final verification code on the attestation form, which will be emailed to registeredattendees.
• To earn full credit, you must remain connected for the entire program.
U.S. Partnerships With Foreign Partners: Navigating Withholding,Informational Reporting and Payment RequirementsWEDNESDAY, OCTOBER 4, 2017, 1:00-2:50 pm Eastern
FOR LIVE PROGRAM ONLY
WHO TO CONTACT DURING THE LIVE EVENT
For Additional Registrations:-Call Strafford Customer Service 1-800-926-7926 x10 (or 404-881-1141 x10)
For Assistance During the Live Program:-On the web, use the chat box at the bottom left of the screen
If you get disconnected during the program, you can simply log in using your original instructions and PIN.
IMPORTANT INFORMATION FOR THE LIVE PROGRAM
This program is approved for 2 CPE credit hours. To earn credit you must:
• Participate in the program on your own computer connection (no sharing) – if you need to registeradditional people, please call customer service at 1-800-926-7926 x10 (or 404-881-1141 x10). Straffordaccepts American Express, Visa, MasterCard, Discover.
• Listen on-line via your computer speakers.
• Respond to five prompts during the program plus a single verification code. You will have to writedown only the final verification code on the attestation form, which will be emailed to registeredattendees.
• To earn full credit, you must remain connected for the entire program.
Tips for Optimal Quality
Sound QualityWhen listening via your computer speakers, please note that the qualityof your sound will vary depending on the speed and quality of your internetconnection.
If the sound quality is not satisfactory, please e-mail [email protected] so we can address the problem.
FOR LIVE PROGRAM ONLY
Sound QualityWhen listening via your computer speakers, please note that the qualityof your sound will vary depending on the speed and quality of your internetconnection.
If the sound quality is not satisfactory, please e-mail [email protected] so we can address the problem.
ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BYTHE SPEAKERS’ FIRMS TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANYOTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THATMAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING ORRECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.
You (and your employees, representatives, or agents) may disclose to any and all persons,without limitation, the tax treatment or tax structure, or both, of any transactiondescribed in the associated materials we provide to you, including, but not limited to,any tax opinions, memoranda, or other tax analyses contained in those materials.
The information contained herein is of a general nature and based on authorities that aresubject to change. Applicability of the information to specific situations should bedetermined through consultation with your tax adviser.
ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BYTHE SPEAKERS’ FIRMS TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANYOTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THATMAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING ORRECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.
You (and your employees, representatives, or agents) may disclose to any and all persons,without limitation, the tax treatment or tax structure, or both, of any transactiondescribed in the associated materials we provide to you, including, but not limited to,any tax opinions, memoranda, or other tax analyses contained in those materials.
The information contained herein is of a general nature and based on authorities that aresubject to change. Applicability of the information to specific situations should bedetermined through consultation with your tax adviser.
I. IntroductionsII. Income Taxation of Partnerships with
Ruling:◦ A foreign partner’s gain or loss from the disposition of an interest in a
partnership that is engaged in a trade or business through a fixed place ofbusiness in the U.S. will be ECI gain or loss to the extent such gain or lossis attributable to ECI property of the partnership.
◦ The gain is presumed to be U.S. source ECI gain in its entirety and subjectto U.S. tax
◦ If a loss, the loss is presumed to be foreign source non-ECI in its entirety,unless the partner can show otherwise.
RR 91-32
Ruling:◦ A foreign partner’s gain or loss from the disposition of an interest in a
partnership that is engaged in a trade or business through a fixed place ofbusiness in the U.S. will be ECI gain or loss to the extent such gain or lossis attributable to ECI property of the partnership.
◦ The gain is presumed to be U.S. source ECI gain in its entirety and subjectto U.S. tax
◦ If a loss, the loss is presumed to be foreign source non-ECI in its entirety,unless the partner can show otherwise.
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Grecian Magnesite Mining
Ruling - In Sum: Gain was considered foreign source and not U.S.
source Gain not attributable to the LLC’s U.S. office because
the LLC’s office was not a material factor in theTaxpayer’s realization income from the redemptiontransaction LLC not regularly engaged in the business of
transacting in its own LLC interests
Not ECI
Grecian Magnesite Mining
Ruling - In Sum: Gain was considered foreign source and not U.S.
source Gain not attributable to the LLC’s U.S. office because
the LLC’s office was not a material factor in theTaxpayer’s realization income from the redemptiontransaction LLC not regularly engaged in the business of
transacting in its own LLC interests
Not ECI
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Source of income - all income earned by any individual or entity is either U.S.source income or non-U.S. source income. §§ 861-865
Effectively connected income - owners of flow-through entities, includingpartners in partnerships, are deemed to be engaged in the trade or business thepartnership is engaged in. § 875(1)
Permanent establishment - a flow-through entity will also attribute a permanentestablishment to its holders, which is an issue for partnerships that rely on treatyplanning
Therefore, if a partnership has ECI or income from a permanent establishment,then its non-U.S. partners become subject to tax at graduated rates. § 864(c)(3)
Application to investment funds – although trading in securities does not makeone engaged in a U.S. trade or business, investment funds face significant risks.(e.g. being deemed to be engaged in a U.S. trade or business of lending money)Private equity fund investments in particular require careful planning
Source of income - all income earned by any individual or entity is either U.S.source income or non-U.S. source income. §§ 861-865
Effectively connected income - owners of flow-through entities, includingpartners in partnerships, are deemed to be engaged in the trade or business thepartnership is engaged in. § 875(1)
Permanent establishment - a flow-through entity will also attribute a permanentestablishment to its holders, which is an issue for partnerships that rely on treatyplanning
Therefore, if a partnership has ECI or income from a permanent establishment,then its non-U.S. partners become subject to tax at graduated rates. § 864(c)(3)
Application to investment funds – although trading in securities does not makeone engaged in a U.S. trade or business, investment funds face significant risks.(e.g. being deemed to be engaged in a U.S. trade or business of lending money)Private equity fund investments in particular require careful planning
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Illustration of Passthrough ECI: If the Fund owns a portfolio
investment in apassthrough entity, thenthe Fund will be treated asif it earned the ECI
The Foreign Partner is apartner in the Fund whichhas ECI, therefore under §875(1), Foreign Partner willhave ECI itself
OtherPartners
ECI
ForeignPartner
Illustration of Passthrough ECI: If the Fund owns a portfolio
investment in apassthrough entity, thenthe Fund will be treated asif it earned the ECI
The Foreign Partner is apartner in the Fund whichhas ECI, therefore under §875(1), Foreign Partner willhave ECI itself
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PortfolioLLC
Portfolio,Inc.
Fund
ECI
ECI
ECI
Solution to ECI: Insert a BlockerCorporation US Blocker, Inc receives the
ECI from the Fund. SinceUS Blocker, Inc is not apassthrough entity, ForeignPartner is not attributedany income received by thecorporation.
There must be a separatedistribution to ForeignPartner so it mayparticipate in the income ofthe Fund. But, suchdistributions are not ECI.
OtherPartners
ForeignPartner
US Blocker,Inc.
Dividend
Solution to ECI: Insert a BlockerCorporation US Blocker, Inc receives the
ECI from the Fund. SinceUS Blocker, Inc is not apassthrough entity, ForeignPartner is not attributedany income received by thecorporation.
There must be a separatedistribution to ForeignPartner so it mayparticipate in the income ofthe Fund. But, suchdistributions are not ECI.
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PortfolioLLC
Portfolio,Inc.
Fund
ECI
ECI
ECI
Blocker Corporations “cut off” the attribution in § 875(1) sincethe corporation itself is a taxpayer.
Both domestic and foreign partnerships can be engaged in aU.S. trade or business. The status will flow through regardlessof how many pass-through entities are in a chain or theirrespective jurisdictions.
Foreign partnerships face additional requirements for Chapter4 withholding purposes
Blocker Corporations “cut off” the attribution in § 875(1) sincethe corporation itself is a taxpayer.
Both domestic and foreign partnerships can be engaged in aU.S. trade or business. The status will flow through regardlessof how many pass-through entities are in a chain or theirrespective jurisdictions.
Foreign partnerships face additional requirements for Chapter4 withholding purposes
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DomesticFeeder Fund
(DE LP)
TypicalTypical Investment Fund StructureInvestment Fund StructureU.S. Taxable
Investors
OffshoreFeeder Fund
(Cayman Corp.)
U.S. Tax-Exempt
Investors
ForeignInvestors
shareholders
Employmentagreements
CarriedInterest – 20%
generalpartner
limitedpartners
GeneralPartner(DE LLC)
Manager(DE LP)
EmployeesPrincipals
IMA
3 4
5 55
MasterFund
(Cayman LP)
generalpartner
IMAmanagementFee – 2%
limitedpartner
limitedpartner
U.S. SPV(s)Foreign SPV(s)
PortfolioInvestments
* Some details omitted
1 2
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1. Master fund2. Portfolio investments3. General partner – makes investment decisions for the fund. Receives a
“carried interest,” which is a profits interest◦ Potential tax issue – what is the character of the carried interest?
4. Manager – manages the fund and receives a fee for doing so◦ Potential tax issue – waiver of fee and receipt of carried interest in
lieu5. Investors – various types of investor
◦ Taxable and tax exempt US investors◦ Foreign taxable and sovereign wealth funds
Note: There are numerous variations on the basic structure including theParallel Fund structure in which a separate fund is created for each type ofinvestor (i.e., tax exempt, foreign taxable, foreign sovereign wealth fund,etc.). Each separate fund makes a direct investment into the portfoliocompanies. For foreign investors, the separate fund may be a corporation,which makes a separate blocker corporation unnecessary.
1. Master fund2. Portfolio investments3. General partner – makes investment decisions for the fund. Receives a
“carried interest,” which is a profits interest◦ Potential tax issue – what is the character of the carried interest?
4. Manager – manages the fund and receives a fee for doing so◦ Potential tax issue – waiver of fee and receipt of carried interest in
lieu5. Investors – various types of investor
◦ Taxable and tax exempt US investors◦ Foreign taxable and sovereign wealth funds
Note: There are numerous variations on the basic structure including theParallel Fund structure in which a separate fund is created for each type ofinvestor (i.e., tax exempt, foreign taxable, foreign sovereign wealth fund,etc.). Each separate fund makes a direct investment into the portfoliocompanies. For foreign investors, the separate fund may be a corporation,which makes a separate blocker corporation unnecessary.
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Applies to: U.S. Source Income paid to a ForeignIndividual ONLY
Different Chapter 3 Withholding Types
Difference to Chapter 4 Withholding
Mechanics:◦ Withholding Agent◦ Amount Subject to Withholding◦ Withholding rates◦ Treaty Modifications (FDAP Only)◦ Forms (see Part VI Filing Requirements)
Applies to: U.S. Source Income paid to a ForeignIndividual ONLY
Different Chapter 3 Withholding Types
Difference to Chapter 4 Withholding
Mechanics:◦ Withholding Agent◦ Amount Subject to Withholding◦ Withholding rates◦ Treaty Modifications (FDAP Only)◦ Forms (see Part VI Filing Requirements)
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Types of Chapter 3 Withholding:◦ § 1441 – Withholding of Tax on NRA◦ § 1442 – Withholding of tax on Foreign Corporations◦ § 1443 – Withholding of Tax on Foreign Tax
Exempts◦ § 1444 – Withholding of Tax on Virgin Island Source
Income◦ § 1445 – Withholding of Tax on Dispositions of
USRPI◦ § 1446 – Withholding of Tax on ECI Allocable to
Foreign Partners
Types of Chapter 3 Withholding:◦ § 1441 – Withholding of Tax on NRA◦ § 1442 – Withholding of tax on Foreign Corporations◦ § 1443 – Withholding of Tax on Foreign Tax
Exempts◦ § 1444 – Withholding of Tax on Virgin Island Source
Income◦ § 1445 – Withholding of Tax on Dispositions of
USRPI◦ § 1446 – Withholding of Tax on ECI Allocable to
Foreign Partners
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Mechanics: Withholding Agent
Generally, the payor of the U.S. source income
Responsible for:◦ withholding the correct amount,◦ filing the return with the IRS,◦ providing the withholding documents to the foreign
individual, and◦ paying withholding to IRS
Documentation and Due diligence◦ Valid Form from W-8 Series (see Treaty Modifications)
Mechanics: Withholding Agent
Generally, the payor of the U.S. source income
Responsible for:◦ withholding the correct amount,◦ filing the return with the IRS,◦ providing the withholding documents to the foreign
individual, and◦ paying withholding to IRS
Documentation and Due diligence◦ Valid Form from W-8 Series (see Treaty Modifications)
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Mechanics: Amount Subject to Withholding
Income allocable to foreign partner◦ Verify in accordance with partnership agreement
Track allocable income by income type◦ ECI vs. FDAP◦ Withholding rates vary – see Treaty Modifications later
Remember: the Agent has an obligation to withholdeven if no amounts were paid out to the foreignpartner
Mechanics: Amount Subject to Withholding
Income allocable to foreign partner◦ Verify in accordance with partnership agreement
Track allocable income by income type◦ ECI vs. FDAP◦ Withholding rates vary – see Treaty Modifications later
Remember: the Agent has an obligation to withholdeven if no amounts were paid out to the foreignpartner
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Mechanics: Withholding Rates
◦ 39.6% Foreign Individual (ECI)
◦ 35% Foreign Corporation (ECI)
◦ 30% NRA (FDAP Income)
◦ Treaty Modification
Mechanics: Withholding Rates
◦ 39.6% Foreign Individual (ECI)
◦ 35% Foreign Corporation (ECI)
◦ 30% NRA (FDAP Income)
◦ Treaty Modification
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Mechanics: Treaty Modifications to FDAP Income
What are they?◦ Bilateral agreements between two governments◦ Promote trade by lessening the incidents of double taxation
Results of Modification:◦ Reduced Rate or Elimination of Withholding
Key Concepts, Articles, and Substantive Provisions◦ Resident/Citizen◦ Business Profits/PE◦ Dividends/Interest/Rents/Royalties/Other Income◦ Limitations on Benefits◦ Savings Clause
Documents and Due Diligence◦ Valid Form from W-8 Series
Mechanics: Treaty Modifications to FDAP Income
What are they?◦ Bilateral agreements between two governments◦ Promote trade by lessening the incidents of double taxation
Results of Modification:◦ Reduced Rate or Elimination of Withholding
Key Concepts, Articles, and Substantive Provisions◦ Resident/Citizen◦ Business Profits/PE◦ Dividends/Interest/Rents/Royalties/Other Income◦ Limitations on Benefits◦ Savings Clause
Documents and Due Diligence◦ Valid Form from W-8 Series
Overview: The Hiring Incentives to Restore Employment Act (P.L. 111-147)
introduced a second set of withholding requirements withrespect to foreign financial institutions (“FFIs”) and other foreignentities
Chapter 4 withholding is commonly known as FATCAwithholding (“Foreign Account Tax Compliance Act”)
The purpose of the FATCA regime is to prevent US taxpayersfrom avoiding US taxation by hiding money in offshore accounts
FATCA requires FFIs to provide information about their USaccount holders or face a 30% withholding tax on US sourceinterest, dividends, rents, royalties, and proceeds from the saleof stock or debt of a US issuer – also called “withholdablepayments”
Overview: The Hiring Incentives to Restore Employment Act (P.L. 111-147)
introduced a second set of withholding requirements withrespect to foreign financial institutions (“FFIs”) and other foreignentities
Chapter 4 withholding is commonly known as FATCAwithholding (“Foreign Account Tax Compliance Act”)
The purpose of the FATCA regime is to prevent US taxpayersfrom avoiding US taxation by hiding money in offshore accounts
FATCA requires FFIs to provide information about their USaccount holders or face a 30% withholding tax on US sourceinterest, dividends, rents, royalties, and proceeds from the saleof stock or debt of a US issuer – also called “withholdablepayments”
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Definitions: FFI – includes foreign banking businesses, insurance
Account - includes equity ownership in entities (e.g.investment funds), in addition to depository and custodialaccounts. Treas. Reg. § 1.1471-5(b)
Investment entities –◦ Trading in money market instruments, foreign currency, etc.◦ Individual or collective portfolio management”◦ Otherwise investing, administering, or managing funds,
money, or financial assets on behalf of other persons.” (Treas.Reg. § 1.1471-5(e)(4).
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Definitions (cont.):
Withholding Agent - defined broadly, and generally means anyperson with control, receipt, custody, disposal, or payment ofany withholdable payment. a withholding agent is requiredTreas. Reg. § 1.1473-1(d)(1)
Withholdable Payment – Payments of FDAP items and grossproceeds from sale of stock or debt of a US issuer◦ The payment of effectively connected income (income
generated by being engaged in a trade or business in theUnited States) is generally not a withholdable payment. Treas.Reg. § 1.1473-1(a)(4)
Definitions (cont.):
Withholding Agent - defined broadly, and generally means anyperson with control, receipt, custody, disposal, or payment ofany withholdable payment. a withholding agent is requiredTreas. Reg. § 1.1473-1(d)(1)
Withholdable Payment – Payments of FDAP items and grossproceeds from sale of stock or debt of a US issuer◦ The payment of effectively connected income (income
generated by being engaged in a trade or business in theUnited States) is generally not a withholdable payment. Treas.Reg. § 1.1473-1(a)(4)
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Intergovernmental Agreements (IGA)
IGAs are agreements between a foreign jurisdiction and the US◦ Generally, payments to a compliant FFI in an IGA jurisdiction are
not subject to withholding◦ In jurisdictions with IGAs, the definition of an FFI is provided in
the IGA◦ Also in jurisdictions with confidentiality requirements and an IGA,
an FFI can report to the government of the foreign jurisdiction andthis will satisfy its FATCA reporting
There are two standard IGAs in place—Model 1 and Model 2 Under Model 1 IGAs, FFIs are responsible for making reports on their
account holders to their national tax authorities, and their nationalauthorities make reports to the IRS. Under Model 2 IGAs, FFIs reportdirectly to the IRS
Each IGA provides a series of definitions that can modify, expand, orchange Treasury Regulations
Intergovernmental Agreements (IGA)
IGAs are agreements between a foreign jurisdiction and the US◦ Generally, payments to a compliant FFI in an IGA jurisdiction are
not subject to withholding◦ In jurisdictions with IGAs, the definition of an FFI is provided in
the IGA◦ Also in jurisdictions with confidentiality requirements and an IGA,
an FFI can report to the government of the foreign jurisdiction andthis will satisfy its FATCA reporting
There are two standard IGAs in place—Model 1 and Model 2 Under Model 1 IGAs, FFIs are responsible for making reports on their
account holders to their national tax authorities, and their nationalauthorities make reports to the IRS. Under Model 2 IGAs, FFIs reportdirectly to the IRS
Each IGA provides a series of definitions that can modify, expand, orchange Treasury Regulations
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Withholding on Payments to FFIs
Not all payments need to be withheld Note special rules for Non-Financial Foreign Entities (“NFFE”s), including
Excepted NFFEs, Deemed Compliant FFIs, and other Rules While documentation requirements will often match documentation
requirements for Chapter 3 (e.g. W-8BENs, W-8BEN-Es, etc.) Additionaldocumentation will be needed in many cases
Foreign Financial Entities, e.g. foreign investment funds taxed aspartnerships, can become withholding agents. Treas. Reg. § 1.871-14T(c)(2)(ii) & (iii)
Using a “look-through” to individual foreign partners is acceptable inmany cases. Treas. Reg. § 1.871-14T(c)(2)(i)
Withholding on Payments to FFIs
Not all payments need to be withheld Note special rules for Non-Financial Foreign Entities (“NFFE”s), including
Excepted NFFEs, Deemed Compliant FFIs, and other Rules While documentation requirements will often match documentation
requirements for Chapter 3 (e.g. W-8BENs, W-8BEN-Es, etc.) Additionaldocumentation will be needed in many cases
Foreign Financial Entities, e.g. foreign investment funds taxed aspartnerships, can become withholding agents. Treas. Reg. § 1.871-14T(c)(2)(ii) & (iii)
Using a “look-through” to individual foreign partners is acceptable inmany cases. Treas. Reg. § 1.871-14T(c)(2)(i)
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Additional Key Points:
You should presume that any payment not made to an individual may besubject to Chapter 4 withholding, both because of the broad definition ofwhat constitutes an “account” and the broad definition of what constitutesan FFI
Chapter 4 withholding can be very different than Chapter 3 withholding. Awithholding agent may be required to withhold under Chapter 4 even whenan item of income is specifically exempted under Chapter 3
Portfolio interest is not subject to Chapter 3 withholding but is subject toChapter 4 withholding. Treas. Reg. § 1.1473-1(a)(2)(i)(C)
Chapter 4 withholding is not an additional tax. Additionally, Chapter 4 andChapter 3 withholding are not duplicative. Treas. Reg. § 1.1474-6.Therefore, a withholding agent need withhold only once
Additional Key Points:
You should presume that any payment not made to an individual may besubject to Chapter 4 withholding, both because of the broad definition ofwhat constitutes an “account” and the broad definition of what constitutesan FFI
Chapter 4 withholding can be very different than Chapter 3 withholding. Awithholding agent may be required to withhold under Chapter 4 even whenan item of income is specifically exempted under Chapter 3
Portfolio interest is not subject to Chapter 3 withholding but is subject toChapter 4 withholding. Treas. Reg. § 1.1473-1(a)(2)(i)(C)
Chapter 4 withholding is not an additional tax. Additionally, Chapter 4 andChapter 3 withholding are not duplicative. Treas. Reg. § 1.1474-6.Therefore, a withholding agent need withhold only once
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Withholding Agent
Recap of Responsibilities:◦ withholding the correct amount,◦ filing the return with the IRS,◦ providing the withholding documents to the foreign individual, and◦ paying withholding to IRS
NRA Withholding◦ Forms 1042/1042-S/1042-T
ECI Withholding◦ Forms 8804/8805/8813
USRPI◦ Forms 8288/8288-A
Withholding Agent
Recap of Responsibilities:◦ withholding the correct amount,◦ filing the return with the IRS,◦ providing the withholding documents to the foreign individual, and◦ paying withholding to IRS
NRA Withholding◦ Forms 1042/1042-S/1042-T
ECI Withholding◦ Forms 8804/8805/8813
USRPI◦ Forms 8288/8288-A
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Individual/Corporate Partner
◦ U.S. Individual Form W-9 – Request for Taxpayer ID Number
◦ Foreign Individual Form W-7 – Application for IRS ITIN Form W-8BEN/W-8BENE/W-8IMY – Certificate of Foreign Status Form 8233 – Personal Service Exemption
◦ Withholding Certificates re: FIRPTA Exemption Form 8288-B
◦ Income Tax Returns Form 1040-NR & 8833 –Treaty-Based Return Position Disclosure Form 1120-F – U.S. Income Tax Return of a Foreign Corporation
Individual/Corporate Partner
◦ U.S. Individual Form W-9 – Request for Taxpayer ID Number
◦ Foreign Individual Form W-7 – Application for IRS ITIN Form W-8BEN/W-8BENE/W-8IMY – Certificate of Foreign Status Form 8233 – Personal Service Exemption
◦ Withholding Certificates re: FIRPTA Exemption Form 8288-B
◦ Income Tax Returns Form 1040-NR & 8833 –Treaty-Based Return Position Disclosure Form 1120-F – U.S. Income Tax Return of a Foreign Corporation
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44
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46
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Penalties
Updated each year for inflation – review filingyear instructions carefully
Substantial - not de minimis
Imposed for failure to file (with IRS), as wellas failure to furnish to recipient
Penalties
Updated each year for inflation – review filingyear instructions carefully
Substantial - not de minimis
Imposed for failure to file (with IRS), as wellas failure to furnish to recipient
