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Irs Extension Forms

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Irs Extension Forms

Irs extension forms Publication 4492 - Introductory Material Table of Contents Introduction Useful Items - You may want to see: Introduction This publication explains the major provisions of the Katrina Emergency Tax Relief Act of 2005 and the Gulf Opportunity Zone Act of 2005. Irs extension forms Useful Items - You may want to see: Publication 526 Charitable Contributions 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 547 Casualties, Disasters, and Thefts 946 How To Depreciate Property Form (and Instructions) 4506Request for Copy of Tax Return 4506-TRequest for Transcript of Tax Return 4684Casualties and Thefts 5884Work Opportunity Credit 5884-ACredits for Employers Affected by Hurricane Katrina, Rita, or Wilma 8863Education Credits (Hope and Lifetime Learning Credits) 8914Exemption Amount for Taxpayers Housing Individuals Displaced by Hurricane Katrina 8915Qualified Hurricane Retirement Plan Distributions and Repayments Prev  Up  Next   Home   More Online Publications
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The Irs Extension Forms

Irs extension 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 extension forms S. Irs extension forms Taxpayer Identification NumbersUnexpected payment. Irs extension forms Depositing Withheld TaxesWhen Deposits Are Required Adjustment for Overwithholding Returns RequiredJoint owners. Irs extension forms Electronic reporting. Irs extension forms Partnership Withholding on Effectively Connected IncomeWho Must Withhold Foreign Partner Publicly Traded Partnerships U. Irs extension forms S. Irs extension forms Real Property InterestForeign corporations. Irs extension forms Domestic corporations. Irs extension forms U. Irs extension forms S. Irs extension forms real property holding corporations. Irs extension forms Partnerships. Irs extension forms Trusts and estates. Irs extension forms Domestically controlled QIE. Irs extension forms Late filing of certifications or notices. Irs extension forms Certifications. Irs extension forms Liability of agent or qualified substitute. Irs extension 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 extension forms Withholding of Tax In most cases, a foreign person is subject to U. Irs extension forms S. Irs extension forms tax on its U. Irs extension forms S. Irs extension forms source income. Irs extension forms Most types of U. Irs extension forms S. Irs extension forms source income received by a foreign person are subject to U. Irs extension forms S. Irs extension forms tax of 30%. Irs extension 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 extension forms The tax is generally withheld (NRA withholding) from the payment made to the foreign person. Irs extension 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 extension forms In most cases, NRA withholding describes the withholding regime that requires withholding on a payment of U. Irs extension forms S. Irs extension forms source income. Irs extension forms Payments to foreign persons, including nonresident alien individuals, foreign entities, and governments, may be subject to NRA withholding. Irs extension forms NRA withholding does not include withholding under section 1445 of the Code (see U. Irs extension forms S. Irs extension forms Real Property Interest, later) or under section 1446 of the Code (see Partnership Withholding on Effectively Connected Income , later). Irs extension forms A withholding agent (defined next) is the person responsible for withholding on payments made to a foreign person. Irs extension forms However, a withholding agent that can reliably associate the payment with documentation (discussed later) from a U. Irs extension forms S. Irs extension forms person is not required to withhold. Irs extension 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 extension forms Withholding Agent You are a withholding agent if you are a U. Irs extension forms S. Irs extension 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 extension 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 extension forms S. Irs extension forms branch of certain foreign banks and insurance companies. Irs extension 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 extension forms Although several persons may be withholding agents for a single payment, the full tax is required to be withheld only once. Irs extension forms In most cases, the U. Irs extension forms S. Irs extension forms person who pays an amount subject to NRA withholding is the person responsible for withholding. Irs extension forms However, other persons may be required to withhold. Irs extension 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 extension 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 extension forms Liability for tax. Irs extension forms   As a withholding agent, you are personally liable for any tax required to be withheld. Irs extension forms This liability is independent of the tax liability of the foreign person to whom the payment is made. Irs extension forms If you fail to withhold and the foreign payee fails to satisfy its U. Irs extension forms S. Irs extension forms tax liability, then both you and the foreign person are liable for tax, as well as interest and any applicable penalties. Irs extension forms   The applicable tax will be collected only once. Irs extension forms If the foreign person satisfies its U. Irs extension forms S. Irs extension forms tax liability, you are not liable for the tax but remain liable for any interest and penalties for failure to withhold. Irs extension forms Determination of amount to withhold. Irs extension forms   You must withhold on the gross amount subject to NRA withholding. Irs extension forms You cannot reduce the gross amount by any deductions. Irs extension 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 extension 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 extension forms In no case, however, should you withhold more than 30% of the total amount paid. Irs extension forms Or, you may make a reasonable estimate of the amount from U. Irs extension forms S. Irs extension forms sources and put a corresponding part of the amount due in escrow until the amount from U. Irs extension forms S. Irs extension forms sources can be determined, at which time withholding becomes due. Irs extension forms When to withhold. Irs extension forms   Withholding is required at the time you make a payment of an amount subject to withholding. Irs extension 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 extension forms A payment is considered made to a person if it is paid for that person's benefit. Irs extension 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 extension forms A payment also is considered made to a person if it is made to that person's agent. Irs extension forms   A U. Irs extension forms S. Irs extension forms partnership should withhold when any distributions that include amounts subject to withholding are made. Irs extension forms However, if a foreign partner's distributive share of income subject to withholding is not actually distributed, the U. Irs extension forms S. Irs extension 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 extension forms If the distributable amount consists of effectively connected income, see Partnership Withholding on Effectively Connected Income , later. Irs extension forms A U. Irs extension forms S. Irs extension 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 extension forms To the extent a U. Irs extension forms S. Irs extension 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 extension 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 extension forms (See Returns Required , later. Irs extension 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 extension forms Form 1099 reporting and backup withholding. Irs extension forms    You also may be responsible as a payer for reporting on Form 1099 payments made to a U. Irs extension forms S. Irs extension forms person. Irs extension forms You must withhold 28% (backup withholding rate) from a reportable payment made to a U. Irs extension forms S. Irs extension forms person that is subject to Form 1099 reporting if any of the following apply. Irs extension forms The U. Irs extension forms S. Irs extension forms person has not provided its taxpayer identification number (TIN) in the manner required. Irs extension forms The IRS notifies you that the TIN furnished by the payee is incorrect. Irs extension forms There has been a notified payee underreporting. Irs extension forms There has been a payee certification failure. Irs extension forms In most cases, a TIN must be provided by a U. Irs extension forms S. Irs extension forms non-exempt recipient on Form W-9, Request for Taxpayer Identification Number and Certification. Irs extension forms A payer files a tax return on Form 945, Annual Return of Withheld Federal Income Tax, for backup withholding. Irs extension 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 extension forms S. Irs extension forms person. Irs extension forms For example, you are required to report income paid to a foreign intermediary or flow-through entity that collects for a U. Irs extension forms S. Irs extension forms person subject to Form 1099 reporting. Irs extension forms See Identifying the Payee , later, for more information. Irs extension forms Also see Section S. Irs extension 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 extension 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 extension forms Wages paid to employees. Irs extension forms   If you are the employer of a nonresident alien, you generally must withhold taxes at graduated rates. Irs extension forms See Pay for Personal Services Performed , later. Irs extension forms Effectively connected income by partnerships. Irs extension forms   A withholding agent that is a partnership (whether U. Irs extension forms S. Irs extension forms or foreign) is also responsible for withholding on its income effectively connected with a U. Irs extension forms S. Irs extension forms trade or business that is allocable to foreign partners. Irs extension forms See Partnership Withholding on Effectively Connected Income , later, for more information. Irs extension forms U. Irs extension forms S. Irs extension forms real property interest. Irs extension forms   A withholding agent also may be responsible for withholding if a foreign person transfers a U. Irs extension forms S. Irs extension forms real property interest to the agent, or if it is a corporation, partnership, trust, or estate that distributes a U. Irs extension forms S. Irs extension forms real property interest to a shareholder, partner, or beneficiary that is a foreign person. Irs extension forms See U. Irs extension forms S. Irs extension forms Real Property Interest , later. Irs extension forms Persons Subject to NRA Withholding NRA withholding applies only to payments made to a payee that is a foreign person. Irs extension forms It does not apply to payments made to U. Irs extension forms S. Irs extension forms persons. Irs extension forms Usually, you determine the payee's status as a U. Irs extension forms S. Irs extension forms or foreign person based on the documentation that person provides. Irs extension forms See Documentation , later. Irs extension 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 extension 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 extension forms However, there are situations in which the payee is a person other than the one to whom you actually make a payment. Irs extension forms U. Irs extension forms S. Irs extension forms agent of foreign person. Irs extension forms   If you make a payment to a U. Irs extension forms S. Irs extension forms person and you have actual knowledge that the U. Irs extension forms S. Irs extension 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 extension forms However, if the U. Irs extension forms S. Irs extension 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 extension 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 extension forms S. Irs extension forms person and not as a payment to a foreign person. Irs extension forms You may be required to report the payment on Form 1099 and, if applicable, backup withhold. Irs extension forms Disregarded entities. Irs extension 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 extension forms The payee of a payment made to a disregarded entity is the owner of the entity. Irs extension 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 extension forms   If the owner is a U. Irs extension forms S. Irs extension forms person, you do not apply NRA withholding. Irs extension forms However, you may be required to report the payment on Form 1099 and, if applicable, backup withhold. Irs extension 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 extension forms Flow-Through Entities The payees of payments (other than income effectively connected with a U. Irs extension forms S. Irs extension forms trade or business) made to a foreign flow-through entity are the owners or beneficiaries of the flow-through entity. Irs extension forms This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Irs extension forms Income that is, or is deemed to be, effectively connected with the conduct of a U. Irs extension forms S. Irs extension forms trade or business of a flow-through entity is treated as paid to the entity. Irs extension forms All of the following are flow-through entities. Irs extension forms A foreign partnership (other than a withholding foreign partnership). Irs extension forms A foreign simple or foreign grantor trust (other than a withholding foreign trust). Irs extension forms A fiscally transparent entity receiving income for which treaty benefits are claimed. Irs extension forms See Fiscally transparent entity , later. Irs extension 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 extension forms You also may be required to treat the entity as a flow-through entity under the presumption rules, discussed later. Irs extension forms You must determine whether the owners or beneficiaries of a flow-through entity are U. Irs extension forms S. Irs extension 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 extension 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 extension 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 extension forms See Documentation and Presumption Rules , later. Irs extension forms Withholding foreign partnerships and withholding foreign trusts are not flow-through entities. Irs extension forms Foreign partnerships. Irs extension 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 extension 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 extension 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 extension 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 extension forms Example 1. Irs extension forms A nonwithholding foreign partnership has three partners: a nonresident alien individual; a foreign corporation; and a U. Irs extension forms S. Irs extension forms citizen. Irs extension forms You make a payment of U. Irs extension forms S. Irs extension forms source interest to the partnership. Irs extension 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 extension forms S. Irs extension forms citizen. Irs extension 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 extension forms You must treat all three partners as the payees of the interest payment as if the payment were made directly to them. Irs extension forms Report the payment to the nonresident alien and the foreign corporation on Forms 1042-S. Irs extension forms Report the payment to the U. Irs extension forms S. Irs extension forms citizen on Form 1099-INT. Irs extension forms Example 2. Irs extension forms A nonwithholding foreign partnership has two partners: a foreign corporation and a nonwithholding foreign partnership. Irs extension forms The second partnership has two partners, both nonresident alien individuals. Irs extension forms You make a payment of U. Irs extension forms S. Irs extension forms source interest to the first partnership. Irs extension 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 extension forms In addition, Forms W-8BEN from the partners are associated with the Form W-8IMY from the second partnership. Irs extension forms The Forms W-8IMY from the partnerships have complete withholding statements associated with them. Irs extension 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 extension forms Example 3. Irs extension forms You make a payment of U. Irs extension forms S. Irs extension forms source dividends to a withholding foreign partnership. Irs extension forms The partnership has two partners, both foreign corporations. Irs extension 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 extension forms You must treat the partnership as the payee of the dividends. Irs extension forms Foreign simple and grantor trust. Irs extension forms   A trust is foreign unless it meets both of the following tests. Irs extension forms A court within the United States is able to exercise primary supervision over the administration of the trust. Irs extension forms One or more U. Irs extension forms S. Irs extension forms persons have the authority to control all substantial decisions of the trust. Irs extension forms   In most cases, a foreign simple trust is a foreign trust that is required to distribute all of its income annually. Irs extension 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 extension forms   The payees of a payment made to a foreign simple trust are the beneficiaries of the trust. Irs extension forms The payees of a payment made to a foreign grantor trust are the owners of the trust. Irs extension 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 extension 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 extension forms Example. Irs extension forms A foreign simple trust has three beneficiaries: two nonresident alien individuals and a U. Irs extension forms S. Irs extension forms citizen. Irs extension forms You make a payment of interest to the foreign trust. Irs extension 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 extension forms S. Irs extension forms citizen. Irs extension 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 extension forms You must treat all three beneficiaries as the payees of the interest payment as if the payment were made directly to them. Irs extension forms Report the payment to the nonresident aliens on Forms 1042-S. Irs extension forms Report the payment to the U. Irs extension forms S. Irs extension forms citizen on Form 1099-INT. Irs extension forms Fiscally transparent entity. Irs extension 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 extension 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 extension forms ). Irs extension 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 extension 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 extension 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 extension forms   The payees of a payment made to a fiscally transparent entity are the interest holders of the entity. Irs extension forms Example. Irs extension 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 extension forms A has two interest holders, B and C. Irs extension forms B is a corporation organized under the laws of country Y. Irs extension forms C is a corporation organized under the laws of country Z. Irs extension forms Both countries Y and Z have an income tax treaty in force with the United States. Irs extension forms A receives royalty income from U. Irs extension forms S. Irs extension forms sources that is not effectively connected with the conduct of a trade or business in the United States. Irs extension forms For U. Irs extension forms S. Irs extension forms income tax purposes, A is treated as a partnership. Irs extension 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 extension 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 extension forms Accordingly, A is fiscally transparent in its jurisdiction, country X. Irs extension forms B and C are not fiscally transparent under the laws of their respective countries of incorporation. Irs extension 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 extension 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 extension forms S. Irs extension forms source royalty income for purposes of the U. Irs extension forms S. Irs extension forms -Y income tax treaty. Irs extension 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 extension forms Therefore, A is not treated as fiscally transparent under the laws of country Z. Irs extension forms Accordingly, C is not treated as deriving its share of the U. Irs extension forms S. Irs extension forms source royalty income for purposes of the U. Irs extension forms S. Irs extension forms -Z income tax treaty. Irs extension 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 extension forms This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Irs extension 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 extension forms An intermediary is a custodian, broker, nominee, or any other person that acts as an agent for another person. Irs extension forms A foreign intermediary is either a qualified intermediary or a nonqualified intermediary. Irs extension 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 extension forms You must determine whether the customers or account holders of a foreign intermediary are U. Irs extension forms S. Irs extension forms or foreign persons and, if the account holder or customer is foreign, whether a reduced rate of NRA withholding applies. Irs extension forms You make these determinations based on the foreign intermediary's Form W-8IMY and associated information and documentation. Irs extension 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 extension forms See Documentation and Presumption Rules , later. Irs extension forms Nonqualified intermediary. Irs extension forms   A nonqualified intermediary (NQI) is any intermediary that is a foreign person and that is not a qualified intermediary. Irs extension forms The payees of a payment made to an NQI are the customers or account holders on whose behalf the NQI is acting. Irs extension forms Example. Irs extension forms You make a payment of interest to a foreign bank that is a nonqualified intermediary. Irs extension 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 extension forms S. Irs extension forms person for whom the bank is collecting the payments. Irs extension 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 extension forms The account holders are the payees of the interest payment. Irs extension 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 extension forms S. Irs extension forms person on Form 1099-INT. Irs extension forms Qualified intermediary. Irs extension forms   A qualified intermediary (QI) is any foreign intermediary (or foreign branch of a U. Irs extension forms S. Irs extension forms intermediary) that has entered into a qualified intermediary withholding agreement (discussed later) with the IRS. Irs extension 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 extension forms In this situation, the QI is required to withhold the tax. Irs extension forms You can determine whether a QI has assumed responsibility from the Form W-8IMY provided by the QI. Irs extension 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 extension 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 extension forms S. Irs extension forms person. Irs extension forms Branches of financial institutions. Irs extension 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 extension forms The countries with approved KYC rules are listed on IRS. Irs extension forms gov. Irs extension forms QI withholding agreement. Irs extension forms   Foreign financial institutions and foreign branches of U. Irs extension forms S. Irs extension forms financial institutions can enter into an agreement with the IRS to be a qualified intermediary. Irs extension forms   A QI is entitled to certain simplified withholding and reporting rules. Irs extension forms In general, there are three major areas whereby intermediaries with QI status are afforded such simplified treatment. Irs extension forms   To apply for QI status, complete Form 14345, Qualified Intermediary Application, and Form SS-4, Application for Employer Identification Number. Irs extension forms These forms, and the procedures required to obtain a QI withholding agreement are available at www. Irs extension forms irs. Irs extension forms gov/Businesses/Corporations/Qualified-Intermediaries-(QI). Irs extension forms Documentation. Irs extension forms   A QI is not required to forward documentation obtained from foreign account holders to the U. Irs extension forms S. Irs extension forms withholding agent from whom the QI receives a payment of U. Irs extension forms S. Irs extension forms source income. Irs extension forms The QI maintains such documentation at its location and provides the U. Irs extension forms S. Irs extension forms withholding agent with withholding rate pools. Irs extension forms A withholding rate pool is a payment of a single type of income that is subject to a single rate of withholding. Irs extension forms   A QI is required to provide the U. Irs extension forms S. Irs extension forms withholding agent with information regarding U. Irs extension forms S. Irs extension forms persons subject to Form 1099 information reporting unless the QI assumes the primary obligation to do Form 1099 reporting and backup withholding. Irs extension 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 extension 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 extension forms Form 1042-S reporting. Irs extension 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 extension 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 extension forms Collective refund procedures. Irs extension forms   A QI may seek a refund on behalf of its direct account holders. Irs extension 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 extension forms U. Irs extension forms S. Irs extension forms branches of foreign banks and foreign insurance companies. Irs extension forms   Special rules apply to a U. Irs extension forms S. Irs extension forms branch of a foreign bank subject to Federal Reserve Board supervision or a foreign insurance company subject to state regulatory supervision. Irs extension forms If you agree to treat the branch as a U. Irs extension forms S. Irs extension forms person, you may treat the branch as a U. Irs extension forms S. Irs extension forms payee for a payment subject to NRA withholding provided you receive a Form W-8IMY from the U. Irs extension forms S. Irs extension forms branch on which the agreement is evidenced. Irs extension forms If you treat the branch as a U. Irs extension forms S. Irs extension forms payee, you are not required to withhold. Irs extension forms Even though you agree to treat the branch as a U. Irs extension forms S. Irs extension forms person, you must report the payment on Form 1042-S. Irs extension forms   A financial institution organized in a U. Irs extension forms S. Irs extension forms possession is treated as a U. Irs extension forms S. Irs extension forms branch. Irs extension forms The special rules discussed in this section apply to a possessions financial institution. Irs extension forms   If you are paying a U. Irs extension forms S. Irs extension 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 extension forms S. Irs extension forms person for amounts subject to NRA withholding. Irs extension forms Consequently, amounts not subject to NRA withholding that are paid to a U. Irs extension forms S. Irs extension forms branch are not subject to Form 1099 reporting or backup withholding. Irs extension forms   Alternatively, a U. Irs extension forms S. Irs extension 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 extension 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 extension forms See Nonqualified Intermediaries under  Documentation, later. Irs extension forms   If the U. Irs extension forms S. Irs extension 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 extension forms Withholding foreign partnership and foreign trust. Irs extension 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 extension 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 extension 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 extension forms A WP or WT acting in that capacity must assume NRA withholding responsibility for these amounts. Irs extension 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 extension forms WP and WT withholding agreements. Irs extension forms   The WP and WT withholding agreements and the application procedures for the agreements are in Revenue Procedure 2003-64. Irs extension forms Also see the following items. Irs extension forms Revenue Procedure 2004-21. Irs extension forms Revenue Procedure 2005-77. Irs extension forms Employer identification number (EIN). Irs extension forms   A completed Form SS-4 must be submitted with the application for being a WP or WT. Irs extension forms The WP or WT will be assigned a WP-EIN or WT-EIN to be used only when acting in that capacity. Irs extension forms Documentation. Irs extension 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 extension 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 extension forms The Form W-8IMY must contain the WP-EIN or WT-EIN. Irs extension forms Foreign Persons A payee is subject to NRA withholding only if it is a foreign person. Irs extension 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 extension forms S. Irs extension forms person. Irs extension forms It also includes a foreign branch of a U. Irs extension forms S. Irs extension forms financial institution if the foreign branch is a qualified intermediary. Irs extension forms In most cases, the U. Irs extension forms S. Irs extension forms branch of a foreign corporation or partnership is treated as a foreign person. Irs extension forms Nonresident alien. Irs extension forms   A nonresident alien is an individual who is not a U. Irs extension forms S. Irs extension forms citizen or a resident alien. Irs extension 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 extension forms Married to U. Irs extension forms S. Irs extension forms citizen or resident alien. Irs extension forms   Nonresident alien individuals married to U. Irs extension forms S. Irs extension forms citizens or resident aliens may choose to be treated as resident aliens for certain income tax purposes. Irs extension forms However, these individuals are still subject to the NRA withholding rules that apply to nonresident aliens for all income except wages. Irs extension forms Wages paid to these individuals are subject to graduated withholding. Irs extension forms See Wages Paid to Employees—Graduated Withholding . Irs extension forms Resident alien. Irs extension 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 extension forms Green card test. Irs extension 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 extension forms This is known as the green card test because these aliens hold immigrant visas (also known as green cards). Irs extension forms Substantial presence test. Irs extension forms An alien is considered a resident alien if the individual meets the substantial presence test for the calendar year. Irs extension 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 extension 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 extension forms This exception is for a limited period of time. Irs extension forms   For more information on resident and nonresident status, the tests for residence, and the exceptions to them, see Publication 519. Irs extension forms Note. Irs extension 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 extension forms For more information on making adjustments, see chapter 13 of Publication 15 (Circular E). Irs extension forms Resident of a U. Irs extension forms S. Irs extension forms possession. Irs extension forms   A bona fide resident of Puerto Rico, the U. Irs extension forms S. Irs extension forms Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands (CNMI), or American Samoa who is not a U. Irs extension forms S. Irs extension forms citizen or a U. Irs extension forms S. Irs extension forms national is treated as a nonresident alien for the withholding rules explained here. Irs extension 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 extension forms   For more information, see Publication 570, Tax Guide for Individuals With Income From U. Irs extension forms S. Irs extension forms Possessions. Irs extension forms Foreign corporations. Irs extension forms   A foreign corporation is one that does not fit the definition of a domestic corporation. Irs extension 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 extension forms Guam or Northern Mariana Islands corporations. Irs extension 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 extension forms Note. Irs extension forms   The provisions discussed below under U. Irs extension forms S. Irs extension 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 extension forms U. Irs extension forms S. Irs extension forms Virgin Islands and American Samoa corporations. Irs extension forms   A corporation created or organized in, or under the laws of, the U. Irs extension forms S. Irs extension 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 extension forms S. Irs extension 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 extension forms S. Irs extension forms Virgin Islands, American Samoa, Guam, the CNMI, or the United States. Irs extension forms Foreign private foundations. Irs extension forms   A private foundation that was created or organized under the laws of a foreign country is a foreign private foundation. Irs extension 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 extension forms Other foreign organizations, associations, and charitable institutions. Irs extension 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 extension 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 extension forms   Payments to these organizations, however, must be reported on Form 1042-S, even though no tax is withheld. Irs extension 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 extension forms U. Irs extension forms S. Irs extension forms branches of foreign persons. Irs extension forms   In most cases, a payment to a U. Irs extension forms S. Irs extension forms branch of a foreign person is a payment made to the foreign person. Irs extension forms However, you may treat payments to U. Irs extension forms S. Irs extension forms branches of foreign banks and foreign insurance companies (discussed earlier) that are subject to U. Irs extension forms S. Irs extension forms regulatory supervision as payments made to a U. Irs extension forms S. Irs extension forms person, if you and the U. Irs extension forms S. Irs extension forms branch have agreed to do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY. Irs extension forms For this purpose, a financial institution organized under the laws of a U. Irs extension forms S. Irs extension forms possession is treated as a U. Irs extension forms S. Irs extension forms branch. Irs extension 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 extension forms The payee is a U. Irs extension forms S. Irs extension forms person. Irs extension 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 extension forms In most cases, you must get the documentation before you make the payment. Irs extension forms The documentation is not valid if you know, or have reason to know, that it is unreliable or incorrect. Irs extension forms See Standards of Knowledge , later. Irs extension forms If you cannot reliably associate a payment with valid documentation, you must use the presumption rules discussed later. Irs extension 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 extension forms The specific types of documentation are discussed in this section. Irs extension forms However, see Withholding on Specific Income , later, as well as the instructions to the particular forms. Irs extension 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 extension forms Section 1446 withholding. Irs extension forms   Under section 1446 of the Code, a partnership must withhold tax on its effectively connected income allocable to a foreign partner. Irs extension 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 extension 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 extension forms Joint owners. Irs extension forms    If you make a payment to joint owners, you need to get documentation from each owner. Irs extension forms Form W-9. Irs extension forms   In most cases, you can treat the payee as a U. Irs extension forms S. Irs extension forms person if the payee gives you a Form W-9. Irs extension forms The Form W-9 can be used only by a U. Irs extension forms S. Irs extension forms person and must contain the payee's taxpayer identification number (TIN). Irs extension forms If there is more than one owner, you may treat the total amount as paid to a U. Irs extension forms S. Irs extension forms person if any one of the owners gives you a Form W-9. Irs extension forms See U. Irs extension forms S. Irs extension forms Taxpayer Identification Numbers , later. Irs extension forms U. Irs extension forms S. Irs extension forms persons are not subject to NRA withholding, but may be subject to Form 1099 reporting and backup withholding. Irs extension forms Form W-8. Irs extension forms   In most cases, a foreign payee of the income should give you a form in the Form W-8 series. Irs extension forms Until further notice, you can rely upon Forms W-8 that contain a P. Irs extension forms O. Irs extension 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 extension forms S. Irs extension forms person and that a street address is available. Irs extension forms You may rely on Forms W-8 for which there is a U. Irs extension forms S. Irs extension forms mailing address provided you received the form prior to December 31, 2001. Irs extension forms   If certain requirements are met, the foreign person can give you documentary evidence, rather than a Form W-8. Irs extension forms You can rely on documentary evidence in lieu of a Form W-8 for a payment made in a U. Irs extension forms S. Irs extension forms possession. Irs extension forms Other documentation. Irs extension forms   Other documentation may be required to claim an exemption from, or a reduced rate of, withholding on pay for personal services. Irs extension 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 extension forms These forms are discussed in Pay for Personal Services Performed under Withholding on Specific Income. Irs extension 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 extension forms Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Irs extension 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 extension 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 extension 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 extension forms Claiming treaty benefits. Irs extension 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 extension forms S. Irs extension 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 extension 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 extension 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 extension forms See Fiscally transparent entity discussed earlier under Flow-Through Entities. Irs extension forms   Limitations on benefits provisions generally prohibit third country residents from obtaining treaty benefits. Irs extension 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 extension forms   The exemptions from, or reduced rates of, U. Irs extension forms S. Irs extension forms tax vary under each treaty. Irs extension forms You must check the provisions of the tax treaty that apply. Irs extension 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 extension 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 extension 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 extension forms Exceptions to TIN requirement. Irs extension 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 extension forms Income from marketable securities (discussed next). Irs extension forms Unexpected payments to an individual (discussed under U. Irs extension forms S. Irs extension forms Taxpayer Identification Numbers ). Irs extension forms Marketable securities. Irs extension forms   A Form W-8BEN provided to claim treaty benefits does not need a U. Irs extension forms S. Irs extension forms TIN if the foreign beneficial owner is claiming the benefits on income from marketable securities. Irs extension forms For this purpose, income from a marketable security consists of the following items. Irs extension forms Dividends and interest from stocks and debt obligations that are actively traded. Irs extension forms Dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (mutual fund). Irs extension 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 extension forms Income related to loans of any of the above securities. Irs extension forms Offshore accounts. Irs extension 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 extension 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 extension 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 extension forms An offshore account is an account maintained at an office or branch of a U. Irs extension forms S. Irs extension forms or foreign bank or other financial institution at any location outside the United States. Irs extension 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 extension forms This rule applies even though you make the payment to a nonqualified intermediary or flow-through entity in the United States. Irs extension 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 extension forms Documentary evidence. Irs extension 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 extension 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 extension 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 extension 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 extension 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 extension 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 extension 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 extension forms (See Effectively Connected Income , later. Irs extension forms )   Effectively connected income for which a valid Form W-8ECI has been provided is generally not subject to NRA withholding. Irs extension forms   If a partner submits this form to a partnership, the income claimed to be effectively connected with the conduct of a U. Irs extension forms S. Irs extension forms trade or business is subject to withholding under section 1446. Irs extension 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 extension 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 extension forms Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding. Irs extension 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 extension forms S. Irs extension 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 extension 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 extension forms   See Foreign Governments and Certain Other Foreign Organizations , later. Irs extension 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 extension 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 extension 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 extension forms Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U. Irs extension forms S. Irs extension forms Branches for United States Tax Withholding. Irs extension forms   This form is used by foreign intermediaries and foreign flow-through entities, as well as certain U. Irs extension forms S. Irs extension 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 extension forms S. Irs extension forms branch of a foreign bank or insurance company and either is agreeing to be treated as a U. Irs extension forms S. Irs extension 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 extension forms For information on qualifying as an upper-tier foreign partnership, see Regulations section 1. Irs extension forms 1446-5. Irs extension 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 extension 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 extension forms The intermediary can claim that it is a QI until the IRS revokes its QI-EIN. Irs extension 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 extension forms Responsibilities. Irs extension forms   Payments made to a QI that does not assume NRA withholding responsibility are treated as paid to its account holders and customers. Irs extension forms However, a QI is not required to provide you with documentation it obtains from its foreign account holders and customers. Irs extension forms Instead, it provides you with a withholding statement that contains withholding rate pool information. Irs extension 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 extension forms A qualified intermediary is required to provide you with information regarding U. Irs extension forms S. Irs extension forms persons subject to Form 1099 reporting and to provide you withholding rate pool information separately for each such U. Irs extension forms S. Irs extension forms person unless it has assumed Form 1099 reporting and backup withholding responsibility. Irs extension forms For the alternative procedure for providing rate pool information for U. Irs extension forms S. Irs extension forms non-exempt persons, see the Form W-8IMY instructions. Irs extension 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 extension forms   The extent to which you must have withholding rate pool information depends on the withholding and reporting obligations assumed by the QI. Irs extension forms Primary responsibility not assumed. Irs extension 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 extension forms Unless the alternative procedure applies, the qualified intermediary must provide you with a separate withholding rate pool for each U. Irs extension forms S. Irs extension forms person subject to Form 1099 reporting and/or backup withholding. Irs extension 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 extension forms Primary NRA withholding responsibility assumed. Irs extension 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 extension forms S. Irs extension forms person, unless the alternative procedure applies, subject to Form 1099 reporting and/or backup withholding. Irs extension 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 extension forms Primary NRA and Form 1099 responsibility assumed. Irs extension 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 extension forms It is not necessary to associate the payment with withholding rate pools. Irs extension forms Example. Irs extension forms You make a payment of dividends to a QI. Irs extension 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 extension forms S. Irs extension forms individual who provides it with a Form W-9. Irs extension forms Each customer is entitled to 20% of the dividend payment. Irs extension forms The QI does not assume any primary withholding responsibility. Irs extension 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 extension forms S. Irs extension forms individual. Irs extension 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 extension forms The part of the payment allocable to the U. Irs extension forms S. Irs extension forms individual (20%) is reportable on Form 1099-DIV. Irs extension forms Smaller partnerships and trusts. Irs extension 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 extension forms It is a foreign partnership or foreign simple or grantor trust. Irs extension forms It is a direct account holder of the QI. Irs extension forms It does not have any partner, beneficiary, or owner that is a U. Irs extension forms S. Irs extension forms person or a pass- through partner, beneficiary, or owner. Irs extension forms   For information on these rules, see section 4A. Irs extension forms 01 of the QI agreement. Irs extension forms This is found in Appendix 3 of Revenue Procedure 2003-64. Irs extension forms Also see Revenue Procedure 2004-21. Irs extension forms Related partnerships and trusts. Irs extension forms    A QI may apply special rules to a related partnership or trust only if the partnership or trust meets the following conditions. Irs extension forms It is a foreign partnership or foreign simple or grantor trust. Irs extension 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 extension forms For information on these rules, see section 4A. Irs extension forms 02 of the QI agreement. Irs extension forms This is found in Appendix 3 of Revenue Procedure 2003-64. Irs extension forms Also see Revenue Procedure 2005-77. Irs extension forms Nonqualified Intermediaries If you are making a payment to an NQI, foreign flow-through entity, or U. Irs extension forms S. Irs extension 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 extension forms S. Irs extension forms branch), and You have sufficient information to report the payment on Form 1042-S or Form 1099, if reporting is required. Irs extension forms The NQI, flow-through entity, or U. Irs extension forms S. Irs extension forms branch must give you certain information on a withholding statement that is associated with the Form W-8IMY. Irs extension forms A withholding statement must be updated to keep the information accurate prior to each payment. Irs extension forms Withholding statement. Irs extension forms   In most cases, a withholding statement must contain the following information. Irs extension forms The name, address, and TIN (if any, or if required) of each person for whom documentation is provided. Irs extension forms The type of documentation (documentary evidence, Form W-8, or Form W-9) for every person for whom documentation has been provided. Irs extension forms The status of the person for whom the documentation has been provided, such as whether the person is a U. Irs extension forms S. Irs extension forms exempt recipient (U. Irs extension forms S. Irs extension forms person exempt from Form 1099 reporting), U. Irs extension forms S. Irs extension forms non-exempt recipient (U. Irs extension forms S. Irs extension forms person subject to Form 1099 reporting), or a foreign person. Irs extension 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 extension forms S. Irs extension forms branch. Irs extension forms The type of recipient the person is, based on the recipient codes used on Form 1042-S. Irs extension forms Information allocating each payment, by income type, to each payee (including U. Irs extension forms S. Irs extension forms exempt and U. Irs extension forms S. Irs extension forms non-exempt recipients) for whom documentation has been provided. Irs extension forms The rate of withholding that applies to each foreign person to whom a payment is allocated. Irs extension forms A foreign payee's country of residence. Irs extension 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 extension forms ). Irs extension 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 extension forms The name, address, and TIN (if any) of any other NQI, flow-through entity, or U. Irs extension forms S. Irs extension forms branch from which the payee will directly receive a payment. Irs extension forms Any other information a withholding agent requests to fulfill its reporting and withholding obligations. Irs extension forms Alternative procedure. Irs extension forms   Under this alternative procedure the NQI can give you the information that allocates each payment to each foreign and U. Irs extension forms S. Irs extension forms exempt recipient by January 31 following the calendar year of payment, rather than prior to the payment being made as otherwise required. Irs extension 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 extension forms You must receive the withholding statement with all the required information (other than item 5) prior to making the payment. Irs extension forms    This alternative procedure cannot be used for payments to U. Irs extension forms S. Irs extension forms non-exempt recipients. Irs extension forms Therefore, an NQI must always provide you with allocation information for all U. Irs extension forms S. Irs extension forms non-exempt recipients prior to a payment being made. Irs extension forms Pooled withholding information. Irs extension 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 extension 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 extension 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 extension 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 extension forms Failure to provide allocation information. Irs extension 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 extension forms You must treat the payees as undocumented and apply the presumption rules, discussed later in Presumption Rules . Irs extension forms An NQI is deemed to have f