W-8/1042-S Compliance When Making Payments to Non-U.S. Persons

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The IRS is heavily focusing its nonresident alien tax regulations compliance audits on accounts payable operations. If your organization outsources work to an overseas contractor, if you bring a foreign contractor in for short-term work, or if you are asked to pay a foreign consultant’s invoice, this course will help you to make sense of the regulations surrounding payments to foreign vendors.

Topics Covered

• How to distinguish a 1042-S reportable non-resident alien payee from a 1099 reportable resident alien or U.S. citizen payee
• Tips on recognizing how to handle visas, green cards, and using the IRS substantial presence test to identify when a payment should be 1042-S or 1099 reportable
• Why where the services performed, and why it is so important to determine your 1042-S reporting responsibilities
• How to use the Forms W-8 and 8233 to validate payee claims for treaty benefits
• Address rules for 1042-S tax withholding and how to report it

Learning Objectives

• Identify the regulations surrounding payments to foreign vendors
• Recognize how to make payments to foreign vendors and are confused as to how to validate Forms W-8 and 1042-S report those payments
• Identify if your organization does not have appropriate policies in place for identifying when W-8 or 1042-S reporting situations arise
• Describe 1099 reporting rules and want to get to the next level in terms of protecting your organization from an IRS audit
• Recognize which W-8 fits with the appropriate payee and payment si8tuation
• Break down important treaty benefit validation steps

Level
Basic

Instructional Method
Group: Internet-based

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None