Do you have a plan to deal with IRS demands for backup withholding if you failed to deduct from payments to Nonresident Aliens' (NRAs)? The IRS is working hard to reduce the delinquent tax burden. They know companies are becoming relatively compliant with 1099 reporting, but they also understand that companies and their advisors are less sure when it comes to identifying and performing backup withholding on NRAs. Collecting the tax due from NRAs working in the U.S. is an IRS Tier 1 audit issue. This tax burden is minimized when companies making payments to NRAs for both dependent and independent personal services properly withhold on these payments.
Join expert, Miles Hutchinson, CGMA, to obtain the knowledge necessary to identify your NRA payees and bring your company into compliance with the 30% backup withholding requirements. After this program, you can develop an effective plan to move your company, institution or clients toward complete regulatory compliance, efficiency improvements, standardized processes and adequate documentation, to ensure NRAs are properly handled according to IRS and tax treaty regulations. You will learn how to use the treaties and best practices to confirm exemption claims made by your NRAs with the IRS.
Publication Date: November 2021
Designed For
Bank Managers, Compliance Officers, Information Reporting Officers, Tax Managers, CFOs, Controllers, Accounting Managers, Auditors, IT Managers, Compliance Managers, and Risk Managers.
Topics Covered
- Who is a Nonresident Alien?
- Which document: W-9 or W-8 (which W-8?)
- Review of the Five Forms W-8: When to use each one
- Why Examine a Tax Treaty
- Use treaties to confirm exemption claims
- Making Backup Withholding Deposits Timely
- Prevent confusion with your other withholding deposits
- Review of the Form 1042-S
- The Annual Form 1042 reporting backup withholding
- Best Practices to Avoid Penalties
- Manage your NRA information reporting and backup withholding
Learning Objectives
- Identify your NRA payees and bring your company into compliance with the 30% backup withholding requirements
- Describe the rules and forms for proper depositing of back-up withholding taxes and the required reporting to the worker as well as to the IRS
- Recognize how to develop an effective plan to move your company, institution or clients toward complete regulatory compliance, efficiency improvements, standardized processes and adequate documentation, to ensure NRAs are properly handled according to IRS and tax treaty regulations
- Recognize how to use the treaties and best practices to confirm exemption claims made by your NRAs with the IRS
- Identify when ITIN renewal begins
- Recognize which individual's payment should be reported through Form 1042-S
- Describe which Visa types is used by Vo-Tech Students
- Recognize which type of income is sourced where the services are performed
- Identify a Form 1042-S 2021 change
- Identify the first step to perform if you sent an NRA a Form 1099 without proper backup withholding
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
Miles Hutchinson
Miles Hutchinson is a CGMA and experienced businessman with over 40 years in the field. He has been an auditor with PriceWaterhouseCoopers and the Chief Financial Officer of a $1 billion real estate development company. Miles is a professional speaker and consultant who has presented over 2,500 seminars and training sessions on a myriad of business and financial topics, like financial analysis and modeling, accounting, strategic planning, and compliance with the Sarbanes-Oxley Act. He is recognized as an expert in payroll and sales & use tax as well as financial modeling & analysis, business strategy and communications. He is the author of several useful accounting and tax tools.
His clients include, Abbott Labs, Bank of America, Boston Scientific, Citicorp, Corning, the FBI, the FDA, the Federal Reserve, GE, Pfizer, Siemens, US Marine Corps, and the US Army. Please visit his web sites to see how you can further benefit from his expertise.