TAX COMPLIANCE AND ENFORCEMENT ISSUES WITH 

RESPECT TO OFFSHORE ACCOUNTS AND ENTITIES 

Scheduled for a Public Hearing 

Before the 

SUBCOMMITTEE ON SELECT REVENUE MEASURES 

of the 

HOUSE COMMITTEE ON WAYS AND MEANS 

on March 31, 2009 

Prepared by the Staff 

of the 

JOINT COMMITTEE ON TAXATION 

 

March 30, 2009 

JCX-23-09
i 

CONTENTS 

Page

INTRODUCTION .......................................................................................................................... 1

I. NONRESIDENT WITHHOLDING ...................................................................................... 2

A. U.S. Tax Treatment of Payments to Nonresident Investors ............................................. 3

B. Why Impose Withholding Taxes? ................................................................................... 8

C. Withholding Tax Administration: Self-Certification .................................................... 11

D. Withholding Tax Enforcement Problems and Possible Solutions ................................. 13

1. Income categorization .............................................................................................. 13

2. Treaty shopping ....................................................................................................... 16

3. Self-certification nature of withholding tax rules .................................................... 18

II. QUALIFIED INTERMEDIARY PROGRAM .................................................................... 22

A. Background .................................................................................................................... 22

B. The Model QI Agreement .............................................................................................. 26

III. BANK SECRECY ............................................................................................................... 39

A. Bank Secrecy: General Background ............................................................................. 43

B. Unilateral Measures to Facilitate Production of Foreign-Based Documents ................. 46

1. Section 7456(b) ........................................................................................................ 46

2. Section 982 exclusionary rules ................................................................................ 46

3. John Doe summonses ............................................................................................... 47

IV. ADDRESSING CONFLICTING INTERESTS: EXCHANGE OF INFORMATION 

UNDER TAX TREATIES ................................................................................................... 50

A. Exchange of Information Under Double Tax Conventions ........................................... 51

1. U.S. Model Agreement ............................................................................................ 51

2. OECD Model Agreement ........................................................................................ 52

3. Recent developments ............................................................................................... 52

B. TIEAs ............................................................................................................................. 54

1. U.S. TIEA Program.................................................................................................. 55

2. OECD Model TIEA ................................................................................................. 55

3. Recent developments ............................................................................................... 56

C. Convention on Mutual Administrative Assistance in Tax Matters ................................ 58

D. Administration of U.S. Treaty Network ........................................................................ 59

1. Routine exchange of information ............................................................................. 59

2. Spontaneous exchange of information ..................................................................... 61

3. Specific exchange of information ............................................................................ 61

4. Other exchanges of information ............................................................................... 61

5. Litigation in support of exchange of information program ..................................... 62
ii 

E. Attempts to Develop an International Consensus .......................................................... 64

1. OECD Initiatives ...................................................................................................... 64

1. European Union Savings Directive .......................................................................... 65

APPENDIX ................................................................................................................................... 67
1 

INTRODUCTION 

The Subcommittee on Select Revenue Measures of the House Committee on Ways and 

Means has scheduled a public hearing for March 31, 2009 on issues relating to banking secrecy 

practices and wealthy American taxpayers. This document,1

 prepared by the staff of the Joint 

Committee on Taxation, provides background on withholding and information reporting 

requirements applicable to payments of U.S.-source portfolio investment income to nonresidents, 

the Internal Revenue Service (“IRS”) Qualified Intermediary program, the effect of bank secrecy 

laws and practices on U.S tax compliance and enforcement efforts involving offshore accounts, 

and information exchange procedures under U.S. income tax treaties and tax information 

exchange agreements. 

 1

 This document may be cited as follows: Joint Committee on Taxation, Tax Compliance and 

Enforcement Issues With Respect to Offshore Accounts and Entities (JCX-23-09), March 30, 2009. This 

document can be found at www.jct.gov. 
2 

I. NONRESIDENT WITHHOLDING 

Introduction

Under present law, nonresidents who receive payments of U.S.-source investment income 

are generally subject to U.S. withholding tax imposed at a 30 percent rate. This withholding tax 

serves as the only mechanism for collection of tax in the case of payments made to foreign 

persons who are not otherwise required to file a U.S. income tax return. There are, however, a 

number of significant statutory exemptions from the 30-percent withholding tax (including for 

interest paid on bank deposits, portfolio interest and most capital gains), and income tax treaties 

typically provide additional withholding tax relief. 

Distinguishing U.S. from foreign persons is therefore important in this context. The IRS 

has a variety of enforcement tools (including information reporting and backup withholding)2

 to 

enforce compliance by U.S. taxpayers. The IRS faces significant enforcement challenges, 

however, in confirming the status of an offshore payee as a bona fide non-U.S. investor. These 

challenges include resource constraints (and the resulting need to rely on compliance by both 

U.S. and foreign intermediaries), the difficulties inherent in determining beneficial ownership of 

income earned through intermediate vehicles (for example, trusts or partnerships), which 

typically are organized under foreign law and often do not have close analogies in U.S. trust or 

company law practice, and disclosure limitations imposed by foreign law. 

If a U.S. person can arrange to receive investment income through means that permit the 

U.S. person to appear to be a foreign person, the U.S. investor may be able to evade U.S. income 

tax entirely. This problem lies at the heart of the ongoing investigation into the role played by 

UBS AG (“UBS”), based in Switzerland and one of the world’s largest financial institutions, in 

facilitating tax evasion by U.S. clients and avoidance of U.S. reporting requirements. 

This section provides an overview of the nonresident withholding tax rules, particularly 

as those rules apply to payments of portfolio investment income by financial institutions to U.S. 

and nonresident customers. It then discusses briefly the enforcement challenges arising under 

those rules, both as a result of their substantive effect and as a matter of administration. 

 2

 U.S. persons may be subject in certain cases to a “backup withholding” tax with respect to 

payments of investment income. This backup withholding tax serves as a backstop to the regular 

information reporting and tax return filing requirements, and does not apply where the U.S. payee has 

provided an Internal Revenue Service Form W-9 to the payor or where the U.S. payee is a so-called 

“exempt recipient” (including a corporation, tax-exempt organization or governmental entity). See, 

generally, sections 3406 and 6041 through 6049 and the Treasury Regulations thereunder. Unless 

otherwise indicated, all section references herein are to sections of the Internal Revenue Code of 1986, as 

amended (the “Code”). A copy of Form W-9 is included in the Appendix hereto. 
3 

A. U.S. Tax Treatment of Payments to Nonresident Investors 

Payments of U.S.-source “fixed and determinable annual or periodic” income, including 

interest, dividends, and similar types of investment income, that are made to foreign persons are 

subject to U.S. withholding tax at a 30 percent rate, unless the withholding agent can establish 

that the beneficial owner of the amount is eligible for an exemption from withholding or a 

reduced rate of withholding under an income tax treaty.3

 

The principal statutory exemptions from the 30-percent nonresident withholding tax 

apply to interest on bank deposits, portfolio interest and capital gains. Since 1984 the United 

States has imposed no tax on “portfolio interest” received by a nonresident individual or foreign 

corporation from sources within the United States.4 Portfolio interest includes generally any 

interest (including original issue discount) other than interest received by a 10-percent 

shareholder,5

 certain contingent interest,6 interest received by a controlled foreign corporation 

 3

 See Treas. Reg. sec. 1.1441-1(b). 

4

 Secs. 871(h) and 881(c). Congress believed that the imposition of a withholding tax on 

portfolio interest paid on debt obligations issued by U.S. persons might impair the ability of U.S. 

corporations to raise capital in the Eurobond market (i.e., the global market for U.S. dollar-denominated 

debt obligations). Congress also anticipated that repeal of the withholding tax on portfolio interest would 

allow the U.S. Treasury Department direct access to the Eurobond market. See Joint Committee on 

Taxation, General Explanation of the Revenue Provisions of the Deficit Reduction Act of 1984, JCS-41-

84 (December 31, 1984), at 391-392. 

5

 Sec. 871(h)(3). A 10-percent shareholder includes any person who owns 10 percent or more of 

the total combined voting power of all classes of stock of the corporation (in the case of a corporate 

obligor), or 10 percent or more of the capital or profits interest of the partnership (in the case of a 

partnership obligor). The attribution rules of section 318 apply for this purpose, with certain 

modifications. 

6

 Sec. 871(h)(4). Contingent interest generally includes any interest if the amount of such 

interest is determined by reference to any receipts, sales or other cash flow of the debtor or a related 

person; any income or profits of the debtor or a related person; any change in value of any property of the 

debtor or a related person; or any dividend, partnership distributions, or similar payments made by the 

debtor or a related person, and any other type of contingent interest identified by Treasury regulation. 

Certain exceptions also apply. 
4 

from a related person,7

 and interest received by a bank on an extension of credit made pursuant 

to a loan agreement entered into in the ordinary course of its trade or business.8

 

In the case of interest paid on a debt obligation that is in registered form,9 the portfolio 

interest exemption is available only to the extent that the U.S. person otherwise required to 

withhold tax (the “withholding agent”) has received a statement made by the beneficial owner of 

the obligation (or a securities clearing organization, bank or other financial institution that holds 

customers’ securities in the ordinary course of its trade or business) that the beneficial owner is 

not a United States person.10 This certification of non-U.S. ownership most commonly is made 

on an IRS Form W-8. 

U.S. tax law also contemplates that U.S. issuers (other than the United States itself) may 

issue debt obligations in bearer form. Historically, in such cases, a holder would present a 

physical interest coupon for payment free of U.S. withholding tax, without that holder being 

required to provide any certification of non-U.S. ownership. Now, however, so-called “bearer 

bonds” are typically held in “dematerialized” (or electronic) form, much like debt obligations 

that are issued in registered form; their “bearer” status arises solely from the fact that a holder 

may request a physical certificate with interest coupons from the issuer. As a practical matter, 

such requests for physical certificates are extremely rare. Nonetheless, the principal U.S. tax 

enforcement focus for “bearer bonds” rests on the historical premise that these bonds are actually 

held in physical form and relates to their mode of original distribution. More particularly, (i) the 

obligation must be offered and sold pursuant to arrangements that are reasonably designed to 

ensure that the obligation will be sold in connection with its original issuance only to a nonUnited States person, (ii) interest on the obligation must be payable only outside the United 

 7

 Sec. 881(c)(3)(C). A related person includes, among other things, an individual owning more 

than 50 percent of the stock of the corporation by value, a corporation that is a member of the same 

controlled group (defined using a 50-percent common ownership test), a partnership if the same persons 

own more than 50 percent in value of the stock of the corporation and more than 50 percent of the capital 

interests in the partnership, any United States shareholder (as defined in section 951(b) and generally 

including any U.S. person who owns 10 percent or more of the voting stock of the corporation), and 

certain persons related to such a United States shareholder. 

8

 Sec. 881(c)(3)(A). 

9

 An obligation is treated as in registered form if (i) it is registered as to both principal and 

interest with the issuer (or its agent) and transfer of the obligation may be effected only by surrender of 

the old instrument and either the reissuance by the issuer of the old instrument to the new holder or the 

issuance by the issuer of a new instrument to the new holder, (ii) the right to principal and stated interest 

on the obligation may be transferred only through a book entry system maintained by the issuer or its 

agent, or (iii) the obligation is registered as to both principal and interest with the issuer or its agent and 

may be transferred through both of the foregoing methods. Treas. Reg. sec. 5f.103-1(c). 

10 Sec. 871(h)(2)(B) and (5). 
5 

States, and (iii) the obligation must bear a legend to the effect that any United States person who 

holds the obligation will be subject to limitations under the U.S. income tax laws.11

Interest on deposits with foreign branches of domestic banks and domestic savings and 

loan associations is not treated as U.S.-source income and is thus exempt from U.S. withholding 

tax (regardless of whether the recipient is a U.S. or foreign person).12 In addition, interest on 

bank deposits, deposits with domestic savings and loan associations, and certain amounts held by 

insurance companies are not subject to the U.S. withholding tax when paid to a foreign person, 

unless the interest is effectively connected with a U.S. trade or business of the recipient.13 

Similarly, interest and OID on certain short-term obligations is also exempt from the U.S. 

withholding tax when paid to a foreign person.14 Consequently, there is no information reporting 

on Form 1042-S with respect to payments of such amounts.15 

Gains derived from the sale of property by a nonresident individual or foreign 

corporation similarly are exempt from U.S. tax, unless they are effectively connected with the 

conduct of a U.S. trade or business. Gains derived by a nonresident alien individual are subject 

to U.S. taxation only if the individual is present in the United States for 183 days or more during 

the taxable year.16 Foreign corporations are subject to tax only with respect to certain gains on 

disposal of timber, coal, or domestic iron ore and certain gains from contingent payments made 

in connection with sales or exchanges of patents, copyrights, goodwill, trademarks and similar 

intangible property.17 Most capital gains realized by foreign investors on the sale of portfolio 

investment securities thus are exempt from U.S. taxation. 

 11 Secs. 871(h)(2)(A) and 163(f)(2)(A). 

12 Treas. Reg. sec. 1.1441-1(b)(4)(iii). 

13 Treas. Reg. sec. 1.1441-1(b)(4)(ii). 

14 Secs. 871(g)(1)(B), 881(a)(3); Treas. Reg. sec. 1.1441-1(b)(4)(iv). 

15 Treas. Reg. sec. 1.1461-1(c)(2)(ii)(A), (B). However, Treasury regulations require a bank to 

report interest on Form 1042-S if the recipient is a resident of Canada and the deposit is maintained at an 

office in the United States. Treas. Reg. secs. 1.6049-4(b)(5), 1.6094-8. This reporting is required to 

comply with the obligations of the United States under the U.S.-Canada income tax treaty. T.D. 8664, 

1996-1 C.B. 292. In 2001, the IRS and Treasury Department issued proposed regulations that would 

require annual reporting to the IRS of U.S. bank deposit interest paid to any foreign individual. 66 Fed. 

Reg. 3925 (Jan. 17, 2001). The 2001 proposed regulations were withdrawn in 2002 and replaced with 

proposed regulations that would require reporting with respect to payments made only to residents of 

certain specified countries (Australia, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the 

Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, and the United Kingdom). 67 Fed. Reg. 

50,386 (Aug. 2, 2002). The proposed regulations have not been finalized. 

16 Sec. 871(a)(2). In most cases, however, an individual satisfying this presence test will be 

treated as a U.S. resident under section 7701(b)(3), and thus will be subject to full residence-based U.S. 

income taxation. 

17 Secs. 881(a), 631(b), (c). 
6 

Treasury regulations provide additional rules governing the treatment of notional 

principal contract payments and substitute dividend or interest payments made to nonresidents. 

Payments made pursuant to a notional principal contract (i.e., a derivative) are sourced in 

accordance with the residence of the recipient.18 Accordingly, when such payments are made by 

a U.S. party to a nonresident counterparty, the payment is treated as foreign source and, as such, 

is generally not subject to U.S. taxation. This rule applies even the payment is calculated in 

whole or part by reference, for example, to U.S.-source dividends paid on an underlying 

reference security. However, if the nonresident counterparty is engaged in a U.S. trade or 

business to which the payment is effectively connected, the payment is subject to regular U.S. 

net income taxation (and not withholding tax) in the same manner as if paid to a U.S. resident.19 

On the other hand, substitute payments made in lieu of interest or dividend payments 

pursuant to a securities lending arrangement or similar transaction are treated by regulation as 

having the same source and character as the payments for which they substitute (a so-called 

“look-through” approach). As a result, substitute interest payments made to a nonresident with 

respect to interest paid on a debt obligation of a U.S. obligor may qualify for the portfolio 

interest exemption, to the extent that they meet the conditions otherwise applicable to actual 

interest payments on the obligation. Substitute dividends paid to a nonresident with respect to 

stock of a U.S. corporation are similarly treated as U.S.-source dividends and are subject to 30-

percent nonresident withholding tax.20 Substitute payments are also eligible for treaty benefits 

(described below) to the same extent and subject to the same conditions as the actual payments 

for which they substitute. 

As the above summary suggests, many forms of income or gain from U.S. investments 

are simply not subject to U.S. withholding tax when earned by a non-U.S. investor. On the other 

hand, the Code does impose withholding tax on some important classes of U.S.-source income 

earned by non-U.S. investors. In particular, dividends paid by U.S. corporations (but, as 

described above, not dividend-equivalent payments made in respect of equity derivative 

contracts) to foreign investors are subject to U.S. withholding tax. So, too, are nonportfolio 

interest payments (e.g., interest paid by a U.S. subsidiary to a foreign parent company), and 

certain rent and royalty payments made in respect of property used in the United States (if not 

incurred in connection with the conduct of a trade or business in the United States). 

Even in those cases where the Code imposes the general 30-percent withholding tax on 

the income or gain of a foreign investor, that tentative tax liability may be reduced or eliminated 

by a tax treaty between the United States and the country in which the investor is domiciled. 

Thus, most U.S. income tax treaties provide for a zero rate of withholding tax on interest 

payments (other than contingent interest of the type described in section 871(h)(4)), with the 

result that virtually all U.S.-source interest paid to residents of a treaty country is typically 

 18 Treas. Reg. sec. 1.863-7(b)(1). 

19 Treas. Reg. sec. 1.863-7(b)(3). 

20 Treas. Reg. sections 1.861-2(a)(7) (substitute interest), 1.861-3(a)(6) (substitute dividends). 
7 

exempt from U.S. withholding tax. Most U.S. income tax treaties also reduce the rate of 

withholding on dividends to 15 percent (in the case of portfolio dividends) and to five percent (in 

the case of “direct investment” dividends paid to a 10 percent-or-greater shareholder). For 

royalties, the U.S. withholding rate is typically reduced to five percent or to zero in certain cases. 

In each case, the reduced withholding rate is available only to a beneficial owner who qualifies 

as a resident of the treaty country within the meaning of the treaty and otherwise satisfies any 

applicable limitation on benefits provisions of the treaty. 
8 

B. Why Impose Withholding Taxes? 

As a practical matter, withholding taxes are the only viable collection mechanism for 

taxing foreign investors with respect to U.S.-source portfolio income. This observation begs the 

question, however, of why the United States should seek to tax this income in the first place. 

Some commentators have described a longstanding global consensus in the allocation of rights to 

tax cross-border income. Under this norm, business income is taxed by the country in which it is 

derived (the source country) and passive or portfolio income is taxed by the country in which the 

recipient of the income resides (the residence country).21 Unlike, for example, a corporation 

operating a business in a source country, a portfolio investor may have no ties to the source 

country other than the investor’s passive holding of the investment. The source country 

therefore may have no clear economic claim to the income. 

In this allocation of taxing rights, source-based withholding tax arguably is an anomaly. 

The current practice of the United States not to tax U.S.-source portfolio interest income (even 

where the interest expense reduces the U.S. tax base) or capital gains derived by nonresidents 

can be said to be consistent with this norm. 

U.S. tax policy with respect to U.S.-source income earned by non-U.S. portfolio investors 

also may be influenced by larger macroeconomic trends. This observation is particularly 

relevant to the exception for interest paid on bank deposits and the portfolio interest exception. 

First, the financial markets are largely global; investment choices are not generally 

constrained by currency exchange controls, and information about global investment 

opportunities is relatively easy to obtain. As a result, non-U.S. investors have available to them a 

wide range of investment opportunities, many of which can be said to be close substitutes for one 

another. Thus, for example, a foreign investor who wishes to acquire a U.S. dollar-denominated 

debt instrument (or bank account) in practice is not required to make that investment in a U.S. 

issuer. 

Second, and as described in detail in an earlier Joint Committee on Taxation staff 

pamphlet, the United States for many years has been a net importer of financial capital.22 

Measured in nominal dollars, the amount of foreign-owned assets in the United States grew at an 

annual rate of more than 13 percent between 1981 and 2006.23 In 2006 the portfolio assets of 

foreign investors invested in the United States exceeded $10 trillion; direct assets of foreign 

investors in the United States (e.g., ownership by a foreign parent company of a U.S. subsidiary) 

 21 E.g., Reuven S. Avi-Yonah, The Structure of International Taxation: A Proposal for 

Simplification, 74 Texas Law Review 1301, 1305-08 (1996); Michael J. Graetz and Itai Grinberg, 

“Taxing International Portfolio Income,” 56 Tax Law Review 537, 540-41 (Summer 2003). 

22 Economic and U.S. Income Tax Issues Raised by Sovereign Wealth Fund Investment in the 

United States, JCX-49-08 (June 17, 2008), at 3-20. 

23 Id. at 14. 
9 

exceeded $2 trillion.24 Foreign ownership of U.S. investments in 2006 exceeded the converse 

case (U.S. investments abroad) by $2.5 trillion.25 

Third, many other countries also are net capital importers, or wish to reduce domestic 

interest costs by increasing the supply of lenders. As a result, many other jurisdictions do not 

today impose withholding tax on interest paid by resident companies to nonresident investors. In 

light of the ready substitutability in the global markets of debt obligations on which withholding 

tax is not imposed for those instruments that are subject to withholding tax, some observers have 

concluded that the imposition of withholding tax on interest paid to foreign portfolio investors is 

unlikely to raise revenue, but is likely to affect adversely the supply of lendable funds to 

domestic issuers (including, in the case of the United States, the U.S. Treasury). This reasoning 

may in part explain the decision of the United States (and other countries) not to impose 

withholding tax on portfolio interest income earned by nonresident investors. 

As described earlier, however, the Code does impose 30-percent withholding tax on U.S.-

source dividends, rents, royalties, and other amounts derived by nonresidents. Notwithstanding 

the broad international tax framework of source-based taxation of business income and 

residence-based taxation of portfolio income, there are a few possible explanations for the 

persistence of these withholding taxes under domestic law. Two practical explanations are first, 

that source-based withholding taxes generate some revenue26 and, second, that the 30-percent 

statutory withholding rate is a tool that the U.S. Treasury Department can employ in negotiations 

over bilateral income tax treaties. On this second point, U.S. bilateral income tax treaties 

generally allow, as was described previously, reduced rates of U.S. withholding tax on dividends, 

rents, royalties, and non-portfolio interest derived by qualified residents of the other treaty 

countries in exchange for similar benefits for U.S. residents with investments in those countries. 

Where investment flows are disproportionate between the United States and a treaty partner, the 

 24 Id. at 17. In addition, foreign governments in 2006 held official reserve assets in the United 

States of $2.77 trillion, up from $1.25 trillion only four years earlier. Id. 

25 Id. at 14. 

26 For tax year 2005, foreign payees received $378.4 billion of U.S.-source income, as reported 

on Form 1042-S, and $333.2 billion (88.0 percent) of this income was exempt from withholding. (Since 

interest on bank deposits is wholly exempt from withholding, these figures exclude interest income paid 

by U.S. banking businesses to foreign depositors.) A total of $6.7 billion in withholding tax was collected 

on the remaining $45.3 billion of U.S.-source income subject to withholding. This amount of withholding 

tax represented approximately two percent of the total amount of U.S.-source income reported on Form 

1042-S. IRS Statistics of Income Bulletin, Winter 2009, Publication 1136, at 100. This amount arguably 

is significant in absolute terms, but of course is a small fraction of total foreign investment in the United 

States. For example, using the 2006 figures cited earlier of some $12 trillion in foreign portfolio and 

direct private investments in the United States, if one were to assume (solely for illustrative purposes) a 

five percent presumptive return on those investments, those investments would generate some $600 

billion in (presumptive) income. $6.7 billion in withholding tax amounts to a little over one percent of 

that amount. 
10 

United States may also be able to obtain other types of concessions from the treaty partner in 

exchange for offering to reduce the U.S. withholding tax rate. 

A third explanation for the persistence of withholding taxes is the difficulty of enforcing 

residence-based taxation of foreign-source portfolio income.27 This portfolio income may be 

truly foreign source as, for example, when a Mexican resident owns shares of stock in U.S. 

companies, either directly or perhaps through an entity organized in a tax haven jurisdiction. 

Alternatively, the portfolio income may be foreign source in formal terms only as, for example, 

when a U.S. resident forms a foreign corporation or other entity for investing into the United 

States. In either case, the residence country (Mexico in the first example and the United States in 

the second example) may not be able to enforce residence-based taxation under its regular 

income tax rules. In this circumstance, tax collected at the source may be the only tax imposed 

on the income. The enforcement challenges presented when U.S. residents derive portfolio 

income through foreign entities or accounts are the subject of much of the succeeding discussion 

in this pamphlet. 

 27 See, e.g., Reuven S. Avi-Yonah, “Memo to Congress: It’s Time to Repeal the U.S. Portfolio 

Interest Exemption,” Tax Notes International, Dec. 7, 1998, at 1817; Graetz and Grinberg, note 16, at 578 

(arguing against source-based withholding taxes and expressing the view that residence-based taxation of 

foreign portfolio income is possible through continued unilateral and multilateral enforcement and 

information exchange efforts). For a general discussion of the difficulties in collecting residence-based 

taxes given globalization and technological developments such as electronic commerce and money, see 

Vito Tanzi, “Globalization, Technological Developments, and the Work of Fiscal Termites,” 26 Brooklyn 

Journal of International Law 1261 (2001). 
11 

C. Withholding Tax Administration: Self-Certification 

The U.S. withholding tax rules are administered through a system of self-certification. 

Thus, a nonresident investor seeking to obtain withholding tax relief for U.S.-source investment 

income typically must provide a certification, on IRS Form W-8, to the withholding agent in 

order to establish foreign status and eligibility for an exemption or reduced rate.28 

There are four types of Form W-8,29 three of which are designed to be filed by the 

beneficial owner of a payment of U.S.-source income: (1) the Form W-8BEN, which is filed by 

a beneficial owner of U.S.-source non-effectively-connected income, (2) the Form W-8ECI, 

which is filed by a beneficial owner of U.S.-source effectively-connected income,30 and (3) the 

Form W-8EXP, which is filed by a beneficial owner of U.S.-source income that is an exempt 

organization or foreign government.31 Each of these forms requires that the beneficial owner 

provide its name and address and certify that the beneficial owner is not a United States person. 

The Form W-8BEN also includes a certification of eligibility for treaty benefits (for completion 

where applicable). All certifications on Forms W-8 are made under penalties of perjury. 

The United States imposes tax on the beneficial owner of income, not its formal recipient. 

For example, if a U.S. citizen owns securities that are held for her in “street” name at a brokerage 

firm, that U.S. citizen (and not the brokerage firm) is subject to tax on income from those 

securities. The distinction between nominal and beneficial ownership of course is important in 

 28 In general, the U.S. information reporting and backup withholding system as it applies to both 

domestic and foreign investors operates on the basis of offering investors an implicit choice: either the 

investor can furnish the requisite identifying information (e.g., a Form W-9 for domestic individual 

investors, or a Form W-8 for a foreign investor), or the investor can suffer withholding tax (technically, 

backup withholding tax in the case of a U.S. investor or, in most cases, an unidentified investor). While it 

is true that withholding tax protects government revenues (although not to the extent of the highest 

individual tax rate), it might be argued that noncompliance with these identification requirements can be 

evidence of more general noncompliance activity by the taxpayer, which in turn would be relevant to the 

IRS. As a result, it might be argued (for example) that interest should simply not be payable to a foreign 

account (or from a U.S. bank account) unless the requisite forms are provided. This approach would go 

far beyond current law, and might in turn be viewed as unduly intrusive into taxpayer privacy (with 

potentially adverse effects on U.S. borrowers’ ability to raise funds). Alternatively, the backup 

withholding rate could be increased to the highest marginal tax rate applicable to individuals, or an even 

higher rate, in order to provide a greater incentive for compliance. 

29 Copies of the Forms W-8 and their instructions are included in the Appendix hereto. 

30 The Form W-8ECI requires that the beneficial owner specify the items of income to which the 

form is intended to apply and certify that those amounts are effectively connected with the conduct of a 

trade or business in the United States and includible in the beneficial owner’s gross income for the taxable 

year. 

31 The Form W-8EXP requires that the beneficial owner certify as to its qualification as a foreign 

government, an international organization, a foreign central bank of issue or a foreign tax-exempt 

organization, in each case meeting certain requirements. 
12 

determining liability for tax in the case of cross-border flows as well, but the complexity and 

opacity of some foreign law arrangements can make compliance more difficult. 32

The fourth type of Form W-8 is the IRS Form W-8IMY, which is filed by a payee that 

receives a payment of U.S.-source income as an intermediary for the beneficial owner of that 

income. The intermediary’s Form W-8IMY must be accompanied by a Form W-8BEN, W8EXP, or W-8ECI, as applicable,33 furnished by the beneficial owner, unless the intermediary is 

a “qualified intermediary,” a “withholding foreign partnership” or a “withholding foreign trust.” 

The rules applicable to qualified intermediaries are discussed in Section II below. A withholding 

foreign partnership or trust is a foreign partnership or trust that has entered into an agreement 

with the Internal Revenue Service to collect appropriate Forms W-8 from its partners or 

beneficiaries and act as a U.S. withholding agent with respect to those persons.34

Provision of the Form W-8 also establishes an exemption from the rules that apply to 

many U.S. persons governing information reporting on Form 1099 and backup withholding.35 A 

withholding agent that makes payments of U.S.-source amounts to a foreign person is required to 

report those payments, including any amounts of U.S. tax withheld, to the IRS on Forms 1042 

and 1042-S.36 

 32 A corporation (and not its shareholders) ordinarily is treated as the beneficial owner of the 

corporation’s income; as a result, this problem technically is not one of withholding tax noncompliance as 

much as it is noncompliance with the rules governing U.S. owners of controlled foreign corporations or 

passive foreign investment companies. Similarly, a foreign complex trust ordinarily is treated as the 

beneficial owner of income that it receives, and a U.S. beneficiary or grantor is not subject to tax on that 

income unless and until he receives a distribution. However, as described by the Senate Permanent 

Subcommittee on Investigations, Committee on Homeland Security and Governmental Affairs, in its 

2006 report, Tax Haven Abuses: the Enablers, the Tools and Secrecy, S. Hrg. 109-797, 109th Cong., 2d 

Sess. (August 1, 2006), arrangements such as “trust protectors” have been employed by U.S. taxpayers to 

achieve substantial control over assets held in offshore trusts. The UBS case, described later in this 

pamphlet, also involved the use of nominee and sham entities to conceal the assets and income of U.S. 

taxpayers. 

33 In limited cases, the intermediary may furnish other documentary evidence of the status of the 

beneficial owner, rather than a Form W-8. 

34 Rev. Proc. 2003-64, 2003-32 I.R.B. 306 (July 10, 2003), provides procedures for qualification 

as a withholding foreign partnership or withholding foreign trust and model withholding agreements. 

35 See Treas. Reg. sec. 1.1441-1(b)(5). 

36 Treas. Reg. sec. 1.1461-1(b), (c). Copies of Form 1042, Form 1042-S and their instructions 

are included in the Appendix hereto. 
13 

D. Withholding Tax Enforcement Problems and Possible Solutions 

Although the existence of source-based withholding taxes can be explained as a response 

to the difficulty of enforcing residence-based taxation of portfolio income, the withholding tax 

itself is difficult to enforce. This section describes several reasons for that difficulty. 

1. Income categorization 

As was described previously, the U.S. 30-percent withholding tax is imposed on discrete 

categories of income — dividends, rents, royalties, and non-portfolio interest, for example. The 

withholding tax treatment of a particular item of income derived by a nonresident may vary 

based on how the income is categorized. Particularly with the growth of financial derivatives, 

taxpayers have exploited problems of characterization.37

Perhaps the best-known example of structuring to avoid withholding tax is the use of 

instruments known as swaps to replicate actual ownership of stock while avoiding the 

withholding tax that would be imposed on dividends paid on the stock. A nonresident seeking 

exposure to the U.S. equity markets could purchase stock in U.S. companies. Dividends paid on 

this stock generally would be considered U.S.-source and therefore would be subject to 

withholding tax at a 30-percent (or reduced treaty) rate.38 Instead of actually owning the stock, 

however, the non-U.S. investor could create synthetic ownership by holding an equity derivative 

contract. 

For example, under a typical “total return swap,” the investor would enter into an 

agreement with a counterparty under which returns to each party would be based on the returns 

generated by a notional investment in a specified dollar amount of stock. The investor would 

agree for a specified period to pay to the counterparty (a) interest calculated at a market rate 

(such as the London Interbank Offered Rate (LIBOR)) on the notional amount of stock and (b) 

any depreciation in the value of the stock, and the counterparty would agree for the specified 

period to pay the investor (c) any dividends paid on the stock and (d) any appreciation in the 

value of the stock.39 This swap would be economically equivalent to a transaction in which the 

foreign investor actually purchased the stock from the counterparty, using funds borrowed from 

the counterparty, and at the end of the period sold the stock back to the counterparty and repaid 

the borrowing. 

 37 At the end of June 2008, the notional amount of interest rate derivatives (that is, the value of 

financial assets underlying the derivatives) outstanding worldwide was $458.3 trillion. Bank for 

International Settlements, Monetary and Economic Department, “OTC Derivatives Market Activity in the 

First Half of 2008” (November 2008), at 2. 

38 Secs. 861(a)(2)(A), 871(a)(1)(A), 881(a)(1). 

39 Amounts owed by each party under a total return swap typically are netted so that only one 

party makes an actual payment. 
14 

Although the equity swap just described has identical economic characteristics to a 

leveraged purchase of stock (except that the equity swap party has credit exposure to its swap 

counterparty), the tax treatment of the foreign investor would be different. Because the source of 

income from an equity swap (in tax terms, a notional principal contract) is (as described 

previously) determined by reference to the residence of the recipient of the income, amounts 

representing dividends in this example would be foreign source and therefore would not be 

subject to U.S. withholding tax.40 

There may be non-tax reasons why foreign investors enter into equity swaps on U.S. 

stock rather than holding the underlying stock. For instance, U.S. securities law regulations 

forbid extending credit above certain levels for the purchase of stock, but these rules do not 

apply to swap transactions that replicate leveraged purchases.41 Nonetheless, certain 

arrangements have been viewed as abusive. For example, a foreign investor might sell stock it 

owns to a U.S. counterparty shortly before a dividend is paid, simultaneously enter into a total 

return swap on the stock with the counterparty, and terminate the swap agreement and 

repurchase the stock from the counterparty shortly after the dividend is paid.42 The IRS has 

sought data from large U.S. financial institutions to determine whether U.S. withholding tax 

should have been paid on certain swap transactions that those institutions facilitated.43 

Notwithstanding possible IRS successes in individual cases, the volume of swap transactions 

remains large. Financial engineering has made it difficult to collect withholding tax on crossborder dividend payments. 

In response, some commentators argue that the U.S. withholding tax on nonresidents’ 

U.S.-source dividend income should be abolished (or that attempts to collect that withholding tax 

are futile).44 Arguments for why the dividend withholding tax should be abolished include the 

 40 Treas. Reg. section 1.863-7(b)(1). For a fuller discussion of sourcing and other tax issues 

related to derivatives transactions, see Joint Committee on Taxation, Present Law and Analysis Relating 

to the Tax Treatment of Derivatives (JCX-21-08), March 4, 2008. For a presentation of various 

hypothetical equity and interest rate swaps and stock lending transactions and a discussion of whether and 

when imposition of withholding tax might be appropriate, see David P. Hariton, “Equity Derivatives, 

Inbound Capital, and Outbound Withholding Tax,” 60 Tax Lawyer 313 (Winter 2007). As a policy 

matter, Hariton argues that the withholding tax on U.S.-source dividends should be eliminated. 

41 See Hariton, note 32, at 324-25. 

42 For an extensive discussion of swap transactions entered into by U.S. financial institutions, 

offshore hedge funds, and other taxpayers, see United States Senate, Permanent Subcommittee on 

Investigations, Committee on Homeland Security and Governmental Affairs, “Dividend Tax Abuse: 

How Offshore Entities Dodge Taxes on U.S. Stock Dividends,” Staff Report, Sept. 11, 2008. 

43 Anita Raghavan, “IRS Probes Tax Goal of Derivatives,” Wall Street Journal, July 19, 2007, 

C1; Anita Raghavan, “Happy Returns: How Lehman Sold Plan to Sidestep Tax Man -- Hedge Funds Use 

Swaps to Avoid Dividend Hit; IRS Seeks Information,” Wall Street Journal, Sept. 17, 2007, A1. 

44 E.g., Hariton, note 32, at 346-50; Gregory May, “Flying on Instruments: Synthetic Investment 

and the Avoidance of Withholding Tax,” Tax Notes, Dec. 9, 1996, at 1225. 
15 

following. First, the dividend withholding tax impedes U.S. corporations' access to global 

capital. Second, taxpayers seek to avoid the dividend withholding tax, and this avoidance creates 

its own issues. Because portfolio interest can be paid to nonresidents free of withholding tax, 

U.S. corporations seeking foreign financing may find their decisions distorted by a tax 

preference for debt rather than equity financing. Debt financing, in turn, can result in a stripping 

of the U.S. tax base since interest payments, unlike dividend payments, are (subject to certain 

limitations) deductible. Moreover, the IRS must expend resources policing the distinction 

between notional principal contract income, which can be derived by nonresidents free of 

withholding tax, and dividend income, which cannot. Eliminating the dividend withholding tax 

would, in this view, free up resources for other enforcement efforts. 

On the other hand, some policy makers and commentators have argued that the United 

States should not give up on dividend withholding tax. One alternative to giving up on the tax is 

to enact targeted changes to prevent avoidance of the tax. One targeted measure could be to 

change the rule under which the source of income from a notional principal contract is 

determined based on the residence of the recipient of the income. A source rule similar to the 

source rule for dividends would treat the source of notional principal contract income as the 

residence jurisdiction of the payor of the income. This rule, however, could create withholding 

on amounts that are not actually paid (because amounts representing dividends in swaps are 

netted against amounts representing interest and depreciation) and could be avoided by entering 

into derivative transactions in which amounts representing dividends are categorized as interest 

and therefore qualify for the portfolio interest exemption.45 

Another targeted measure, included in bills introduced recently in the U.S. House of 

Representatives and the U.S. Senate, would impose the 30-percent gross basis withholding tax on 

dividend-equivalent amounts paid on swap contracts.46 This measure may raise similar concerns 

to those that apply to a change in the source rule for notional principal contract income — that 

withholding tax could be imposed on amounts not actually paid and that the provision might be 

avoided through the use of other forms of derivative contracts (e.g., forward contracts in which 

anticipated dividend payments are reflected in the forward pricing). 

A more thorough approach to the problem of avoiding withholding tax by deriving 

income in one category rather than another would be to impose a uniform withholding tax on all 

deductible payments, including portfolio interest. This approach is described in more detail 

below. 

 45 Statement of Reuven S. Avi-Yonah, Irwin I. Cohn Professor of Law, University of Michigan 

Law School, Testimony Before the Subcommittee on Select Revenue Measures of the House Committee 

on Ways and Means, March 5, 2008, available at 

http://waysandmeans.house.gov/hearings.asp?formmode=printfriendly&id=6821 (last accessed March 25, 

2009. 

46 S. 506, 111th Cong., 1st Sess. (2009), section 108; H.R. 1265, 111th Cong., 1st Sess. (2009), 

section 108. 
16 

2. Treaty shopping 

A second problem with enforcing withholding taxes arises from the availability of 

reduced rates of withholding tax under U.S. bilateral income tax treaties. Under the U.S. model 

tax treaty and in many actual U.S. tax treaties, the withholding tax rate on dividends is reduced to 

five percent when the beneficial owner of the dividends owns at least 10 percent of the voting 

stock of the company paying the dividends and is reduced to 15 percent in other cases; the 

withholding tax rate on interest that would not qualify for the U.S. portfolio interest exemption is 

reduced to zero (or, in the case of certain contingent interest, 15 percent); and the withholding 

tax on royalties is eliminated.47 Several recent U.S. tax treaties go further than the U.S. model 

treaty and completely eliminate withholding tax when a subsidiary company makes dividend 

payments to its parent corporation (so-called “direct investment” dividends).48

Nonresidents receiving U.S.-source income subject to withholding tax have an incentive 

to take advantage of U.S. income tax treaties that reduce withholding tax. Treaty benefits, 

however, generally are allowed only to residents of the treaty countries. A taxpayer that is not a 

resident of a treaty country may attempt to benefit from a treaty by organizing an entity in a 

treaty jurisdiction and causing income to be routed through that entity. 

For example, a corporation organized in Singapore (a non-treaty jurisdiction) that intends 

to make loans to a related U.S. corporation might form a corporation in Luxembourg (a treaty 

jurisdiction), and then arrange for the loans to be made by the Luxembourg corporation with 

funds ultimately supplied by the Singapore company. If the Luxembourg corporation is viewed 

under applicable U.S. law as the owner of the interest income paid by the U.S. affiliate, then 

interest on the loans will qualify for a zero or 15-percent rate of withholding tax under the U.S.-

Luxembourg income tax treaty rather than the statutory 30-percent rate. This hypothetical 

example illustrates a practice referred to as treaty shopping. 

There have been various efforts to restrict treaty shopping. The IRS has successfully 

litigated some cases, including a leading case involving “back-to-back” interest paid (as in the 

above example) from a U.S. company to a foreign affiliate in a treaty country that acted as a 

simple conduit for a loan from a non-treaty ultimate owner.49 Similarly, the Treasury has 

negotiated extensive “limitation on benefits” provisions in treaties, and the problem has been 

addressed by proposed and enacted legislation and regulations. 

All recent U.S. income tax treaties include comprehensive limitation on benefits 

provisions. These provisions are intended to ensure that only genuine residents of treaty 

 47 U.S. Model Income Tax Convention of November 15, 2006, Articles 10, 11, and 12. 

48 See, for example, Article 10(3) of the income tax treaty between the United States and the 

United Kingdom. Other U.S. treaties that include a zero rate of withholding tax on direct dividends are 

the income tax treaties with Australia, Belgium, Denmark, Finland, Germany, Iceland, Japan, and 

Sweden. 

49 Aiken Industries, Inc. v. Commissioner, 56 T.C. 925 (1971). 
17 

countries are eligible for the benefits of a treaty. Limitation on benefits provisions therefore 

typically include rules denying treaty benefits unless one of several tests for a genuine 

connection to a treaty country is satisfied. Under a typical version of one of these tests (the 

ownership and base erosion test), at least 50 percent of the voting power and value of the person 

for whom eligibility for treaty benefits is at issue must be residents of the relevant treaty country 

and deductible payments to persons who are not residents of either treaty country must represent 

less than 50 percent of the person’s income. 

Limitation on benefits provisions have not prevented treaty shopping in all cases. The 

limitation on benefits provisions in some treaties more than 10 years old (the treaty with 

Luxembourg, for instance, under which, as an example, a Luxembourg company may qualify for 

treaty benefits even if its direct owner is a resident of a zero-tax jurisdiction so long as at least 50 

percent of the company’s principal share class is ultimately owned by Luxembourg or U.S. 

residents) are not as restrictive as the provisions in more recent treaties. Treaty shopping using 

the U.S. income tax treaties with Hungary and Poland, in fact, is limited only by relatively 

narrow provisions in those treaties defining residency and by considerations of the domestic laws 

of the treaty countries. Those two treaties have no rules comparable to comprehensive limitation 

on benefits provisions found in other treaties. 

U.S. internal law, a recent legislative proposal, and Treasury regulations have also 

addressed certain concerns about treaty shopping. A Code provision denies treaty benefits to 

certain foreign persons for payments received through certain hybrid entities.50 A proposal 

included in a bill sponsored by House Ways and Means Committee Chairman Rangel would 

deny treaty-based reductions in withholding tax for any payment to a subsidiary of a foreign 

parent corporation unless the payment would qualify for treaty benefits if paid directly to the 

parent corporation.51 Treasury regulations promulgated in 1995 (the anti-conduit rules) 

recharacterize as transactions made directly between two parties certain multi-party financing 

transactions entered into principally to reduce withholding tax.52

In light of these treaty-based and domestic law provisions to limit withholding tax 

reductions to genuine residents of treaty countries, the extent of treaty shopping is unclear, in 

part because defining treaty shopping is itself subjective. 

 50 Section 894(c). 

51 H.R. 3970, 110th Cong., 1st Sess. (2007), section 3204. Rep. Doggett introduced a similar, 

though more restrictive, bill. H.R. 3160, 110th Cong. 1st Sess. (2007). The provision in H.R. 3970 

would allow the treaty reduction in withholding tax if the parent corporation was eligible for the benefits 

of an income tax treaty with the United States. By contrast, if the rate of withholding tax applicable under 

the U.S. income tax treaty with the parent corporation’s country of residence were higher than the rate 

under the U.S. income tax treaty with the subsidiary’s country of organization, H.R. 3160 would apply the 

higher rate. 

52 Treas. Reg. section 1.881-3; T.D. 8611 (Aug. 10, 1995). 
18 

3. Self-certification nature of withholding tax rules 

A third enforcement difficulty originates in the basic framework of the U.S. withholding 

tax rules. Those rules rely on certifications by recipients of income potentially subject to 

withholding and by withholding agents. As described previously, recipients of income 

potentially subject to withholding must certify their status so that the payors of the income can 

determine to what extent withholding is required. Recipients must, for example, certify whether 

they are U.S. residents or nonresidents and, if they are nonresidents, whether they are eligible for 

reduced rates of withholding tax allowed by a tax treaty. Withholding agents must certify that 

they have withheld the proper amount of tax, often with respect to very large volumes of income 

flows. Proper withholding, in turn, requires the withholding agent to determine whether a payee 

has U.S. or foreign status; whether a payee is the beneficial owner53 of the income or is an 

intermediary receiving a payment on behalf of the owner; whether the payment can be reliably 

associated with proper documentation; and whether, in the absence of documentation, certain 

presumptions require full, reduced, or zero withholding or instead require backup withholding. 

Problems with withholding can result from errors related to any aspect of this selfcertification process. Moreover, the self-certification system can be difficult for the IRS to audit. 

Applicable Treasury regulations generally do not impose an “audit” or affirmative diligence 

obligation on the part of domestic withholding agents in determining the validity of a Form W8,54 and as a practical matter U.S. withholding agents cannot verify the accuracy of every Form 

W-8 they receive. As a consequence, U.S. investors may be able to portray themselves 

successfully as foreign persons, thereby escaping U.S. income taxation. 

In a December 2007 report to the Senate Finance Committee, the Government 

Accountability Office (“GAO”) found a number of potential problems with the self-certification 

process.55 Withholding agents may not know the identity of beneficial owners of income when 

 53 The beneficial owner of income is, generally, the person who is required under U.S. tax 

principles to include the income in gross income on a tax return. A person is not a beneficial owner of 

income, however, to the extent that person is receiving the income as a nominee, agent, or a custodian, or 

to the extent that the person is a conduit whose participation in a transaction is disregarded. Foreign 

partnerships, foreign simple trusts, and foreign grantor trusts are not the beneficial owners of income paid 

to the partnership or trust. The beneficial owner of income paid to a foreign estate is the estate itself. See 

Treas. Reg. sec. 1.1441-1(c)(6) and the Instructions to Form 1042-S. 

54 See, e.g., Treas. Reg. section 1.1441-1(b)(2)(vii)(A) (providing that a withholding agent 

generally can rely on a Form W-8 or similar documentation if, before the payment, the agent holds the 

documentation, can reliably determine how much of the payment relates to the documentation, and has no 

actual knowledge or reason to know that any of the information, certifications, or statements in or 

associated with the documentation are incorrect). 

55 Government Accountability Office, Report to the Committee on Finance, U.S. Senate, “Tax 

Compliance: Qualified Intermediary Program Provides Some Assurance that Taxes on Foreign 

Investors Are Withheld and Reported, but Can Be Improved” (GAO-08-99), December 2007 

(hereafter GAO Report). 
19 

income is paid through foreign intermediaries. In particular, withholding agents may not be able 

to identify U.S. beneficial owners who ultimately control foreign corporations or trusts.56

Consequently, these U.S. persons may incorrectly benefit from treaty-based reductions of 

withholding tax or exemptions from withholding tax altogether (because, for instance, the 

income in question is interest on a bank account or a bond). The problem of U.S. beneficial 

owners hiding behind foreign entities or accounts is central to the UBS case discussed elsewhere 

in this pamphlet and has been the focus of various efforts to address noncompliance with 

information reporting and withholding rules. 

Relatedly, according to the GAO significant amounts of income have flowed to 

undisclosed recipients and undisclosed jurisdictions. For reasons that the IRS could not explain, 

according to the GAO, withholding taxes on these income flows have been imposed, in the 

aggregate, at rates significantly below 30 percent. Because beneficial ownership and residence 

information typically is the basis for reduced withholding tax rates, these reduced rates, 

according to GAO, suggest some amount of noncompliance. This noncompliance can be 

expected to have included evasion of U.S. tax by U.S. persons who have derived portfolio 

income through foreign intermediaries. 

Potential changes to the information reporting and withholding rules to address problems 

arising from the self-certification nature of the rules range from modest to sweeping. In its 2007 

report the GAO recommended, among other steps, that the IRS improve its enforcement efforts 

by making better use of data that it already collects. In particular, the GAO suggested that the 

IRS determine the extent to which (1) income paid by withholding agents flows through foreign 

intermediaries that may be providing the IRS with unreliable documentation, and (2) reductions 

in withholding taxes collected from funds flowing to undisclosed jurisdictions and undisclosed 

recipients were proper.57

The IRS’s qualified intermediary (“QI”) program has been the major initiative 

undertaken by the IRS to deal with the compliance issues presented by self-certification. Under 

this program, the IRS contracts with foreign financial institutions to enforce U.S. withholding 

and reporting rules. The QI program is discussed in detail in Section II. 

Professor Reuven Avi-Yonah has advocated a different approach.58 Avi-Yonah’s 

proposal is intended to address the principal concern of this pamphlet — the failure by 

 56 As previously noted, a corporation (and not its shareholders) ordinarily is treated as the 

beneficial owner of the corporation’s income. Similarly, a foreign complex trust ordinarily is treated as 

the beneficial owner of income that it receives, and a U.S. beneficiary or grantor is not subject to tax on 

that income unless and until he receives a distribution. 

57 GAO Report at 15-16, 21. 

58 Statement of Reuven S. Avi-Yonah, Irwin I. Cohn Professor of Law, University of Michigan 

Law School, Testimony Before the Subcommittee on Select Revenue Measures of the House Committee 

on Ways and Means, March 5, 2008, available at 

http://waysandmeans.house.gov/hearings.asp?formmode=printfriendly&id=6821 (last accessed March 25, 
20 

individuals to report to the taxing authorities of their home countries income from portfolio 

investments derived through foreign intermediaries. Avi-Yonah argues that the United States 

should impose a uniform withholding tax on cross-border interest flows, other deductible 

payments such as royalties, and payments on derivative instruments. He suggests that this 

withholding tax should be imposed at a rate that would approximate the tax rate that would apply 

if the portfolio income were taxed on a true residence basis, a rate of 40 percent or higher. The 

withholding tax would be fully refundable if the beneficial owner of the income subject to 

withholding provided a certificate to the tax authorities in the country from which the income 

was derived attesting that the income was reported in the owner’s home country. 

Avi-Yonah’s approach builds on (but goes further than) the European Union (“EU”) 

Savings Taxation Directive.59 That directive provides for (1) the automatic exchange of 

beneficial ownership and other information when a resident of one member state of the EU 

receives interest payments from an entity or other payor in another member state and (2) during a 

transitional period, imposition of a 20 percent (35 percent after June 2011) withholding tax on 

interest payments received by EU residents from payors located in Austria, Belgium, or 

Luxembourg unless the recipients of the payments agree to the exchange of information related 

to their accounts.60 Avi-Yonah argues that the United States should use the EU Savings Taxation 

Directive as the basis for leading a coordinated effort at instituting his proposed uniform 

withholding tax in all member countries of the Organisation for Economic Co-operation and 

Development (“OECD”). 

Avi-Yonah’s recommendations must be put in the context of the macroeconomic issues 

identified earlier. In particular, those recommendations might prove difficult for the United 

States to adopt unilaterally if withholding increases the cost of borrowing to domestic issuers, 

including the Federal government. Moreover, as applied to the United States those 

 

2009); Reuven S. Avi-Yonah, “Memo to Congress: It’s Time to Repeal the U.S. Portfolio Interest 

Exemption,” Tax Notes International, Dec. 7, 1998, at 1817. 

59 Council Directive 2003/48/EC of 3 June 2003 on Taxation of Savings Income in the Form of 

Interest Payments, available at 

http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:157:0038:0048:en:PDF (last accessed 

March 25, 2009). To address avoidance of the Directive, the European Commission has proposed 

amendments that would, among other changes, extend the Directive to interest-equivalents and require 

payors to apply the Directive when payments are made to non-EU intermediaries on behalf of beneficial 

owners who reside in the EU. See Proposal for a Council Directive amending Directive 2003/48/EC on 

Taxation of Savings Income in the Form of Interest Payments, November 13, 2008, available at 

http://ec.europa.eu/taxation_customs/resources/documents/taxation/personal_tax/savings_tax/savings_dir

ective_review/COM(2008)727_en.pdf. 

60 Rules similar to the rules for Austria, Belgium, and Luxembourg apply under EU savings 

agreements with Andorra, Liechtenstein, San Marino, Monaco, and Switzerland and under bilateral 

agreements between individual EU states and the ten dependent and associated territories of the United 

Kingdom and the Netherlands (Anguilla, Aruba, the British Virgin Islands, the Cayman Islands, 

Guernsey, the Isle of Man, Jersey, Montserrat, the Netherlands Antilles and the Turks and Caicos 

Islands). 
21 

recommendations presumably would require that bearer bonds be prohibited, and arguably 

should require domestic withholding on interest as well. To date, at least, the United States has 

moved in the opposite direction, by emphasizing improved information reporting. It is worth 

noting, however, that repeal of the special rules for bearer bonds (under which the portfolio 

interest exemption is made available as long as certain foreign-targeting requirements are 

satisfied in connection with the original issuance) would also be consistent with the current IRS 

approach; the continued need for those rules is no longer entirely clear, in light of the absence of 

demand for actual bearer bonds and the global prevalence of electronic clearing systems. 

Professor Michael J. Graetz and Itai Grinberg are not as pessimistic as Avi-Yonah about 

the ability of residence countries to collect tax on foreign portfolio income in the absence of 

refundable source-country withholding taxes.61 Graetz have argued that source-based taxation of 

foreign portfolio income should be abolished and that, to address noncompliance with residencebased taxation of this income, the United States and other countries should instead engage in 

continued multilateral cooperation in information sharing. Graetz also have argued for unilateral 

efforts to address cross-border evasion. As an example of unilateral action, they view the United 

States' QI program as "a major step forward." 

 61 Michael J. Graetz & Itai Grinberg, “Taxing International Portfolio Income,” 56 Tax Law 

Review 537, 578-86 (Summer 2003). (More broadly, Graetz and Grinberg argue that the United States 

should pursue a policy of national neutrality in the taxation of foreign portfolio income and therefore 

should allow a deduction, not a credit, for foreign taxes imposed on that income.) 
22 

II. QUALIFIED INTERMEDIARY PROGRAM 

A. Background 

In April of 1996, the IRS published proposed regulations under sections 1441 and 1442 

addressing certain U.S.-source income paid to foreign persons.62 Final regulations were issued in 

1997, but their effective date was twice delayed, and they became effective only as of January 1, 

2001.63 These regulations substantially revised the withholding and reporting requirements for 

amounts paid to foreign persons and established the Qualified Intermediary (“QI”) program.64 

As described in this Section II, the revised Treasury regulations were an attempt to balance the 

needs of tax administration and the procedures necessary to curb tax evasion with the need to 

minimize the barriers and burdens placed on the financial markets. 

The basic strategy adopted by the QI regulations was for the IRS to rely explicitly on 

certain foreign intermediaries (QIs) to enforce compliance with U.S. tax information reporting 

requirements. These foreign intermediaries agree to assume responsibility for obtaining 

documentation from their customers and to substantiate the status of their customers as the 

beneficial owners of U.S.-source income. In turn, the IRS agrees to permit the QIs to certify on 

behalf of their foreign customers, without revealing to the IRS or to other U.S. withholding 

agents the identity of those foreign customers. Moreover, the IRS agrees to rely on third-party 

private auditors to audit the compliance of the QIs with the QI program; this condition was 

viewed as a practical necessity if foreign banks were to agree to participate in the QI program, 

because these foreign institutions feared that their non-U.S. customer base would not agree to 

allow a foreign taxing authority (the IRS) direct access (through an IRS audit) to customer 

account information. 

At the time the QI program was adopted, the IRS explained its scope and purpose as 

follows in Announcement 2000-48: 

The QI system is a significant step forward for both taxpayers and the IRS. It does, 

however, represent a paradigm shift to greater self-regulation. Treasury and the IRS 

believe that it is appropriate to allow the greatest self-regulation under circumstances in 

which Treasury and the IRS have the greatest confidence that such self-regulation will be 

effective. In pursuit of that objective, Treasury and the IRS considered allowing QI 

status only for businesses operating in jurisdictions with which the United States has a 

 62 61 Fed. Reg. 17,614 (Apr. 22, 1996). 

63 T.D. 8734 (Oct. 6, 1997). The regulations specific to QIs have subsequently been amended. 

See T.D. 8804 (Dec. 30, 1998) (delaying effective date and providing additional transition rules); T.D. 

8856 (Dec. 30, 1999) (delaying effective date); and T.D. 8881 (May 16, 2000) (providing for withholding 

rate pools for QIs and changing model QI agreement regulations to conform with Rev. Proc. 2000-12, 

which includes a provision requiring a QI to disinvest in cases in which a non-exempt U.S. customer does 

not waive local bank secrecy laws). 

64 Treas. Reg. sec. 1.1441-1(e)(5). 
23 

bilateral tax treaty or tax information exchange agreement. In response to taxpayer 

comments, however, that approach was not adopted. Taxpayers requested that the QI 

system have the broadest scope possible, so that financial institutions can potentially act 

as qualified intermediaries in all jurisdictions in which they do business. In an attempt to 

balance these competing concerns, Treasury and the IRS intend to permit financial 

institutions to act as qualified intermediaries in accordance with the provisions of this 

announcement [and the model QI Agreement].65

The Announcement went on to explain that, as part of this “paradigm shift,” the IRS’s 

cross-border withholding tax compliance effort essentially would be built around reliance on 

bank regulatory “know-your-customer” rules: 

Treasury and the IRS believe it is appropriate to permit the self-regulation envisioned by 

the QI system only under circumstances in which Treasury and the IRS have confidence 

that such self-regulation may be effective. Because Treasury and the IRS regard knowyour-customer (KYC) rules as a vital component of adequate self-regulation, the IRS 

generally will not extend the QI system to any country that does not have KYC rules or 

has unacceptable KYC rules. The IRS will, however, permit a branch of a financial 

institution (but not a separate juridical entity affiliated with the financial institution) 

located in such a country to act as a qualified intermediary if the branch is part of an 

entity organized in a country that has acceptable KYC rules and the entity agrees to apply 

its home country KYC rules to the branch. As is the case with any violations of the QI 

agreement by the branch, failure to obtain adequate documentation will cause the entity 

to be in default of its agreement and may cause the agreement to be terminated.66

Prior to the issuance of the current withholding tax regulations and the QI program, 

withholding agents were subject to complex rules depending on the type of income and source of 

income of the payment. Inconsistent rules for determining whether a payee was a U.S. or foreign 

person applied to different types of income, and IRS guidance was sometimes unclear. The IRS 

and Treasury determined that, due to the substantial growth in cross-border flows and the desire 

to continue a net withholding system (rather than moving to a full withholding system with 

refundability), it was necessary to standardize and coordinate the procedures imposed on 

withholding agents for verifying U.S. or foreign status for Form 1099 reporting, compliance with 

backup withholding rules, and administration of the nonresident withholding provisions. 

Additionally, Treasury was under a congressional mandate to consider options for replacing the 

address/self-certification method of administering income tax treaty benefits.67

In developing the QI program, Treasury and the IRS gave particular attention to the 

problems raised under prior practice by payments made through foreign intermediaries. (As 

 65 Announcement 2000-48, 2000-1 C.B. 1243. 

66 Id. After December 31, 2006, however, branches located in countries without approved knowyour-customer rules are no longer permitted to operate as QIs. See Notice 2006-35, 2006-14 I.R.B. 708. 

67 See Tax Equity and Fiscal Responsibility Act of 1982, sec. 342. 
24 

previously noted, payments made through an intermediary are treated as payments made directly 

to the beneficial owner for whom the intermediary is collecting the payments.) Prior Treasury 

regulations required different documentation depending on the type of payment, whether the 

intermediary remitted through a U.S. office, or whether the payee had a foreign address. In cases 

in which withholding certificates were required, the beneficial owner certification was required 

to be passed up through a chain of intermediaries to the U.S. withholding agent. These 

procedures were difficult to implement and enforce in many cases, making it difficult to collect 

tax from the ultimate beneficial owner of the payments. 

A QI is defined as a foreign financial institution or a foreign clearing organization, other 

than a U.S. branch or U.S. office of such institution or organization, which has entered into a 

withholding and reporting agreement (a “QI agreement”) with the IRS.68 In exchange for 

entering into a QI agreement, the QI is able to shield the identities of its customers from the IRS 

and other intermediaries (for example, other financial institutions in the chain of payment that 

may be business competitors of the QI) in certain circumstances and is subject to reduced 

information reporting duties compared to those that would be imposed in the absence of the 

agreement. This ability to shield customer information is limited, however, with respect to U.S. 

persons, because the QI is required to furnish Forms 1099 to its U.S. customers if it has assumed 

primary withholding responsibility for these accounts, or to provide Forms W-9 to the 

withholding agent in cases in which the QI has not assumed such responsibility. 

A foreign financial institution that becomes a QI is not required to forward beneficial 

ownership information with respect to its customers to a U.S. financial institution or other 

withholding agent of U.S.-source investment-type income to establish their eligibility for an 

exemption from, or reduced rate of, U.S. withholding tax.69 Instead, the QI is permitted to 

establish for itself the eligibility of its customers for an exemption or reduced rate, based on 

information as to residence obtained under the “know-your-customer” rules imposed by the 

banking laws to which the QI is subject in its home jurisdiction. The QI certifies as to eligibility 

on behalf of its customers, and provides withholding rate pool information to the U.S. 

withholding agent as to the portion of each payment that qualifies for an exemption or reduced 

rate of withholding. As described below, a QI may also assume responsibility for both 

nonresident withholding and, in the case of U.S. customers, backup withholding. 

The IRS has published a model QI agreement (described in more detail below) that 

financial institutions wishing to become QIs are generally expected to sign.70 A prospective QI 

 68 The definition also includes: a foreign branch or office of a U.S. financial institution or U.S. 

clearing organization; a foreign corporation for purposes of presenting income tax treaty claims on behalf 

of its shareholders; and any other person acceptable to the Internal Revenue Service. Treas. Reg. sec. 

1.1441-1(e)(5)(ii). 

69 U.S. withholding agents are allowed to rely on a QI’s Form W-8IMY without any underlying 

beneficial owner documentation. By contrast, non-QIs are required both to provide a Form W-8IMY to a 

U.S. withholding agent and to forward with that document Form W-8s or W-9s for each beneficial owner. 

70 Rev. Proc. 2000-12, 2000-1 C.B. 387, supplemented by Announcement 2000-50, 2000-1 C.B. 

998, and modified by Rev. Proc. 2003-64, 2003-2 C.B. 306, and Rev. Proc. 2005-77, 2005-2 C.B. 1176. 
25 

must submit an application to the IRS providing certain specified information, and any additional 

information and documentation requested by the IRS. The application must establish to the 

IRS’s satisfaction that the applicant has adequate resources and procedures to comply with the 

terms of the QI agreement. 

Before entering into a QI agreement that provides for the use of documentary evidence 

obtained under a country’s know-your-customer rules, the IRS must receive (1) that country’s 

know-your-customer practices and procedures for opening accounts and (2) responses to 18 

related items. If the IRS has already received this information, a particular prospective QI need 

not submit it again. The IRS web site (www.irs.gov) lists 59 countries for which it has received 

such information and for which the know-your-customer rules are acceptable. 

Although the QI program “gives the IRS an important line of sight into the activities of 

U.S. taxpayers at foreign banks and financial institutions,”71 QIs handle only a relatively small 

percentage of U.S.-source income flowing through foreign intermediaries. The Government 

Accountability Office (the “GAO”) has reported that, in 2003, only 12.5 percent of income 

reported as paid by withholding agents was reported by QIs; in fairness, however, the QI 

program at that point was only in its third year.72 Of the remaining 87.5 percent, the GAO made 

no determination as to the amounts flowing through direct versus indirect (i.e., nonqualified 

intermediary) account holdings; nor did the GAO distinguish between portfolio and direct 

investment flows. 

 

The QI agreement applies only to foreign financial institutions, foreign clearing organizations, and 

foreign branches or offices of U.S. financial institutions or U.S. clearing organizations. However, the 

principles of the QI agreement may be used to conclude agreements with other persons defined as QIs. In 

addition, the IRS may choose to enter into a QI agreement that deviates from the model agreement. 

71 Written Testimony of Douglas H. Shulman, Commissioner, Internal Revenue Service, Hearing 

on Tax Issues Related to Ponzi Schemes and an Update on Offshore Tax Evasion Legislation Before the 

S. Comm. on Fin., 111th Cong., Mar. 17, 2009 [hereinafter Shulman 2009 SFC Testimony]. 

72 Government Accountability Office, Testimony of Michael Brostek Before the Committee on 

Finance, U.S. Senate: Tax Compliance: Offshore Financial Activity Creates Enforcement Issues for IRS, 

GAO-09-478T (Mar. 17, 2009), at 10. 
26 

B. The Model QI Agreement 

The model QI agreement describes in detail the QI’s withholding and reporting 

obligations in numerous circumstances. Certain key aspects of the model agreement are 

described briefly below.73 

Withholding and reporting

As a technical matter, all QIs are withholding agents for purposes of the nonresident 

withholding and reporting rules, and payors (required to withhold and report) for purposes of the 

backup withholding rules. However, under the QI agreement, a QI is not required to withhold on 

payments made to nonresident customers, or to report those payments on Form 1042-S, if the QI 

has not assumed primary responsibility for nonresident withholding and, instead, provides a U.S. 

withholding agent with a Form W-8IMY that certifies as to the status of its (unnamed) 

nonresident account holders. Similarly, a QI is not required to backup withhold on payments 

made to U.S. customers if the QI does not assume primary Form 1099 reporting and backup 

withholding responsibility and, instead, provides a U.S. payor with the Forms W-9 of its U.S. 

non-exempt recipient account holders (i.e., account holders that are U.S. persons not generally 

exempt from Form 1099 reporting and backup withholding). In either case, the QI must also 

provide the U.S. withholding agent (or U.S. payor) certain additional information about the 

withholding rates that should be applied to payments made to such account holders. These rates 

can be supplied with respect to “withholding rate pools” that aggregate payments of a single type 

of income (e.g., interest or dividends) that is subject to a single rate of withholding. 

Alternatively, a QI may elect to assume primary nonresident withholding and reporting 

responsibility, primary backup withholding and Form 1099 reporting responsibility, or both. A 

QI that assumes such responsibility is subject to all of the related obligations imposed by the 

Code on U.S. withholding agents or payors. 

In general, a QI is not required to disclose, either to a withholding agent or to the IRS, the 

identity of an account holder that is a foreign person or a U.S. person that is an exempt recipient 

(such as a corporation).74 To the extent that a QI has not assumed primary Form 1099 reporting 

and backup withholding responsibility, the QI generally must provide to a withholding agent 

Forms W-9 obtained from each U.S. non-exempt recipient account holder (for example, an 

individual). If a U.S. non-exempt recipient has not provided a Form W-9, the QI must disclose 

the name, address, and taxpayer identification number (if available) to the withholding agent 

(and the withholding agent must apply backup withholding). However, no such disclosure is 

necessary if the QI is, under local law, prohibited from making the disclosure and the QI has 

 73 Additional detail can be found in Joint Committee on Taxation, Selected Issues Relating to Tax 

Compliance With Respect to Offshore Accounts and Entities (JCX-65-08), July 23, 2008. 

74 This absence of a requirement to disclose a U.S. exempt recipient is consistent with the fact 

that exempt recipients are excluded from the scope of the general rules governing backup withholding and 

information reporting. 
27 

followed certain procedural requirements (including providing for backup withholding, as 

described further below). 

Documentation of account holders

QIs agree to review and maintain documentation regarding the status of their account 

holders in accordance with the terms of their QI agreement and, in the case of documentary 

evidence obtained from direct account holders, in accordance with “know-your-customer” rules 

applicable under the banking laws and regulations of the jurisdiction in which the QI is located. 

A QI may treat an account holder as a foreign beneficial owner of an amount if the 

account holder provides a valid Form W-8 (other than a Form W-8IMY) or valid documentary 

evidence that supports the account holder’s status as a foreign person. With such documentation, 

a QI generally may treat an account holder as entitled to a reduced rate of withholding if all the 

requirements for the reduced rate are met and the documentation supports entitlement to a 

reduced rate. A QI may not reduce the rate of withholding if the QI knows that the account 

holder is not the beneficial owner of a reportable amount or payment. 

If a foreign account holder is the beneficial owner of a payment, then a QI may shield the 

account holder’s identity from U.S. custodians and the IRS. If a foreign account holder is not the 

beneficial owner of a payment (for example, because the account holder is a nominee), the 

account holder must provide the QI with a Form W-8IMY for itself along with specific 

information about each beneficial owner to which the payment relates. A QI that receives this 

information may shield the account holder’s identity from a U.S. custodian, but not from the 

IRS.75 

In general, if an account holder is a U.S. person, the account holder must provide the QI 

with a Form W-9 or appropriate documentary evidence that supports the account holder’s status 

as a U.S. person. However, in cases in which a QI does not have sufficient documentation to 

determine whether an account holder is a U.S. or foreign person, the QI must apply certain 

presumption rules detailed in the QI agreement. These presumption rules may not be used to 

grant a reduced rate of nonresident withholding; instead they merely determine whether a 

payment should be subject to full nonresident withholding (at a 30 percent-rate), subject to 

backup withholding (at a 28 percent-rate), or treated as exempt from backup withholding. 

In general, under these presumptions, amounts of U.S.-source investment income that are 

paid outside the United States to an account maintained outside the United States are presumed 

made to an undocumented foreign account holder. A QI must treat such an amount as subject to 

withholding at a 30-percent rate and report the payment to an unknown account holder on Form 

1042-S.76 However, U.S.-source deposit interest and interest or original issue discount on short-

 75 This rule restricts one of the principal benefits of the QI regime, nondisclosure of account 

holders, to financial institutions that have assumed the documentation and other obligations associated 

with QI status. 

76 Form 1042-S is the IRS form on which a withholding agent reports a foreign person’s U.S.-

source income that is subject to reporting to the foreign person and to the IRS. 
28 

term obligations that is paid outside the United States to an offshore account is presumed made 

to an undocumented U.S. non-exempt recipient account holder and thus is subject to backup 

withholding at a 28-percent rate.77 Importantly, both foreign-source income and broker proceeds 

are presumed to be paid to a U.S. exempt recipient (and thus are exempt from both nonresident 

and backup withholding) in cases in which such amounts are paid outside the United States to an 

account maintained outside the United States. 

Foreign law prohibition of disclosure

The QI agreement includes procedures to address situations in which foreign law 

(including by contract) prohibits the QI from disclosing the identities of U.S. non-exempt 

recipients (such as individuals). Separate procedures are provided for accounts established with 

a QI prior to January 1, 2001, and for accounts established on or after January 1, 2001. 

Established prior to January 1, 2001

For accounts established prior to January 1, 2001, if the QI knows that the account holder 

is a U.S. non-exempt recipient, the QI must (1) request from the account holder the authority to 

disclose its name, address, taxpayer identification number (if available), and reportable amounts; 

(2) request from the account holder the authority to sell any assets that generate, or could 

generate, reportable payments; or (3) request that the account holder disclose itself by mandating 

the QI to provide a Form W-9 completed by the account holder. The QI must make these 

requests at least two times during each calendar year and in a manner consistent with the QI’s 

normal communications with the account holder (or at the time and in the manner that the QI is 

authorized to communicate with the account holder). Until the QI receives a waiver on all 

prohibitions against disclosure, authorization to sell all assets that generate, or could generate, 

reportable payments, or a mandate from the account holder to provide a Form W-9, the QI must 

backup withhold on all reportable payments paid to the account holder and report those payments 

on Form 1099 or, in certain cases, provide another withholding agent with all of the information 

required for that withholding agent to backup withhold and report the payments on Form 1099. 

Established on or after January 1, 2001

For any account established by a U.S. non-exempt recipient on or after January 1, 2001, 

the QI must (1) request from the account holder the authority to disclose its name, address, 

taxpayer identification number (if available), and reportable amounts; (2) request from the 

account holder, prior to opening the account, the authority to exclude from the account holder’s 

account any assets that generate, or could generate, reportable payments; or (3) request that the 

account holder disclose itself by mandating the QI to transfer a Form W-9 completed by the 

account holder. 

If a QI is authorized to disclose the account holder’s name, address, taxpayer 

identification number, and reportable amounts, it must obtain a valid Form W-9 from the account 

 77 These amounts are statutorily exempt from nonresident withholding when paid to non-U.S. 

persons. 
29 

holder, and, to the extent the QI does not have primary Form 1099 and backup withholding 

responsibility, provide the Form W-9 to the appropriate withholding agent promptly after 

obtaining the form. If a Form W-9 is not obtained, the QI must provide the account holder’s 

name, address, and taxpayer identification number (if available) to the withholding agents from 

whom the QI receives reportable amounts on behalf of the account holder, together with the 

withholding rate applicable to the account holder. If a QI is not authorized to disclose an account 

holder’s name, address, taxpayer identification number (if available), and reportable amounts, 

but is authorized to exclude from the account holder’s account any assets that generate, or could 

generate, reportable payments, the QI must follow procedures designed to ensure that it will not 

hold any assets that generate, or could generate, reportable payments in the account holder’s 

account. 

Under both of these procedures, a U.S. non-exempt recipient may effectively avoid 

disclosure and backup withholding simply by investing in assets that generate solely foreign 

source income (such as bonds issued by a foreign government). Under present law, foreign 

source income generally is not subject to Form 1099 reporting and backup withholding or to U.S. 

nonresident withholding tax.78 Thus, this feature of the QI agreement is arguably consistent with 

the present law framework for withholding and information reporting. Moreover, a U.S. investor 

seeking to avoid disclosure can hold foreign assets through an account with a foreign financial 

institution that is not a QI and, similarly, escape information reporting and backup withholding. 

On the other hand, the fact that QI status affords foreign financial institutions a number of 

significant benefits arguably justifies the imposition of enhanced reporting by those institutions 

(for example, with respect to foreign-source income) in order to assist the IRS in its enforcement 

efforts. 

External audit procedures

The IRS generally will not audit a QI with respect to withholding and reporting 

obligations covered by a QI agreement if an approved external auditor conducts an audit of the 

QI. An external audit must be performed of the second and fifth full calendar years in which the 

QI agreement is in effect. In general, the IRS must receive the external auditor’s report by June 

30 of the year following the year being audited. 

Certain requirements for the external audit are provided in the QI agreement. In general, 

however, the QI must permit the external auditor to have access to all relevant records of the QI, 

including information regarding specific account holders. In addition, the QI must permit the 

IRS to communicate directly with the external auditor, review the audit procedures followed by 

the external auditor, and examine the external auditor’s work papers and reports. 

 78 Non-U.S. investments can generate amounts subject to information reporting if they are not 

considered paid outside the U.S. under Treas. Reg. 1.6049-5(e). Payments are not considered paid 

outside the U.S. if the customer has transmitted instructions to an agent, branch, or office of the institution 

from inside the U.S. by mail, phone, electronic transmission, or otherwise, unless the transmission from 

the U.S. has taken place in isolated and infrequent circumstances. 
30 

In addition to the external audit requirements set forth in the QI agreement, the IRS has 

issued further guidance (the “QI audit guidance”) for an external auditor engaged by a QI to 

verify the QI’s compliance with the QI agreement.79 An external auditor must conduct its audit 

in accordance with the procedures described in the QI agreement. However, the QI audit 

guidance is intended to assist the external auditor in understanding and applying those 

procedures. The QI audit guidance does not amend, modify, or interpret the QI agreement. 

Term of a QI agreement

A QI agreement expires on December 31 of the fifth full calendar year after the year in 

which the QI agreement first takes effect, although it may be renewed. Either the IRS or the QI 

may terminate the QI agreement prior to its expiration by delivering a notice of termination to 

the other party. However, the IRS will not terminate a QI agreement unless there is a significant 

change in circumstances or an event of default occurs, and the IRS determines that the change in 

circumstance or event of default warrants termination. In the event that an event of default 

occurs, a QI is given an opportunity to cure it within a specified time. 

Discussion

Since the adoption of the QI regime in 2001, more than 7,000 QI agreements have been 

signed. As of July 2008, there were 5,660 active QI agreements involving financial institutions 

in 60 countries.80 The QI program provides a significant benefit to foreign financial 

institutions—in particular, the ability to obtain a reduced rate or exemption from U.S. 

withholding tax for their non-U.S. customers without disclosing the identities of those customers 

to the IRS or competing financial institutions. At the same time, however, the contractual nature 

of the QI program provides the IRS with an important mechanism to enforce compliance with 

U.S. reporting and withholding rules. For example, a foreign financial institution that is a QI is 

contractually required to disclose the identity of its U.S. customers to the IRS, report the 

payment of certain amounts to those customers and, in some circumstances, apply backup 

withholding. These contractual requirements extend beyond the scope of the reporting and 

withholding that would otherwise be required under applicable Treasury regulations. Moreover, 

the fact that so many of the world’s major financial institutions have entered into QI agreements 

places a non-QI financial institution at a competitive disadvantage and creates a significant 

incentive for existing QIs to maintain their QI status. The IRS’s ability to terminate a QI 

agreement in the event of noncompliance, thereby placing a financial institution at such a 

disadvantage, is a powerful tool for enforcing compliance and ensuring cooperation by a QI 

when instances of noncompliance are discovered. 

 79 Rev. Proc. 2002-55, 2002-2 C.B. 435. 

80 See Written Testimony of Douglas H. Shulman, Commissioner, Internal Revenue Service, 

Hearing on Tax Haven Banks and U.S. Tax Compliance Before the Permanent Subcomm. on 

Investigations, S. Comm. on Homeland Sec. and Governmental Affairs, 110th Cong., July 17, 2008 

[hereinafter Shulman 2008 Testimony]. The difference between signed agreements and active 

agreements is due to mergers, acquisitions, and terminations. As of July 2008, the IRS had issued 600 

default letters and had terminated 100 QI agreements. 
31 

On the other hand, the ongoing investigation into the failure by UBS to comply with the 

terms of its QI agreement has demonstrated certain weaknesses in the QI program as presently 

implemented. The UBS investigation is described briefly below, followed by a description of 

certain modifications to the QI program presently under consideration by the IRS to address 

problems identified in the UBS and other enforcement proceedings and the voluntary disclosure 

procedures recently announced by the IRS for individual taxpayers with unreported offshore 

accounts and entities. 

The UBS Case

UBS, based in Switzerland and one of the world’s largest financial institutions, had 

voluntarily entered into a QI agreement with the IRS, effective January 1, 2001, under which 

UBS agreed to identify and document any customers who held U.S. investments or received 

U.S.-source income in accounts maintained with UBS. Alternatively, if a U.S. customer refused 

to be identified under the QI agreement, UBS was required to apply backup withholding tax at a 

28-percent rate on payments made to the customer, and to bar the customer from holding U.S. 

investments. 

According to a report issued by the Permanent Subcommittee on Investigations of the 

Committee on Homeland Security and Governmental Affairs of the U.S. Senate (the “PSI”) on 

July 17, 2007 (prepared in connection with a hearing held that day), entitled Tax Haven Banks 

and U.S. Tax Compliance (the “2008 PSI Report”), many of UBS’s U.S. clients refused to be 

identified, to have taxes withheld, or to sell their U.S. assets as required under the QI agreement. 

To retain these customers, UBS bankers assisted the customers in concealing their ownership of 

the assets held in offshore accounts by helping to create nominee and sham entities. These 

entities were set up in various jurisdictions, including Switzerland, Liechtenstein, Panama, the 

British Virgin Islands, and Hong Kong. The UBS bankers and their U.S. customers then claimed 

that the offshore accounts were owned by these nominee and sham entities and were not subject 

to the reporting requirements imposed by the QI agreement. 

On July 1, 2008, a Federal district court in Florida granted the IRS permission to issue a 

John Doe summons to UBS seeking the names of as many as 20,000 U.S. citizens who were 

UBS customers for which reporting or withholding obligations may not have been met. 

At the 2008 PSI hearing, Mark Branson, Chief Financial Officer, UBS Global Wealth 

Management and Business Banking, acknowledged in his testimony that compliance failures 

may have occurred and stated that UBS would take actions to ensure that the types of activities 

identified in the 2008 PSI Report would not recur. As part of that effort, UBS will no longer 

provide offshore banking services to U.S. customers; instead, such customers will be provided 

services only through companies licensed in the United States. Moreover, UBS will no longer 

permit advisors based in Switzerland to travel to the United States to meet with U.S. customers. 

Finally, Mr. Branson indicated that UBS would comply with the John Doe summons as it relates 

to the UBS accounts held by U.S. residents. 

Subsequent to the 2008 PSI hearing, there have been several developments including the 

United States and UBS entering into a deferred prosecution agreement, the filing of a petition to 

enforce the John Doe summons, and an expansion of the Justice Department’s investigation to 
32 

certain Swiss individuals that allegedly worked with UBS employees to help U.S. taxpayers set 

up offshore accounts and entities to avoid paying U.S. taxes. On February 18, 2009, the United 

States District Court for the Southern District of Florida accepted a deferred prosecution 

agreement between the United States and UBS.81 Pursuant to this agreement, UBS waived 

indictment and consented to the filing of a one-count criminal information charging UBS in a 

conspiracy to defraud the United States and the IRS in violation of U.S. criminal law. As part of 

the agreement, UBS agreed to pay $780 million in fines, penalties, interest and restitution. To 

the extent UBS meets this, and all other, obligations under the deferred prosecution agreement, 

the government will recommend dismissal of the charge. 

On February 19, 2009, following the acceptance of the deferred prosecution agreement, 

the government filed a petition to enforce the previously issued John Doe summons with the 

United States District Court for the Southern District of Florida. In this petition, the government 

requested that the court issue an order requiring UBS to disclose to the IRS the identities of the 

bank’s U.S. customers with undeclared Swiss accounts. The lawsuit alleges that there may be as 

many as 52,000 undeclared accounts with approximately $14.8 billion in assets as of the mid2000s. 

On March 4, 2009, a subsequent PSI hearing on Tax Haven Banks and U.S. Tax 

Compliance—Obtaining the Names of U.S. Clients with Swiss Accounts (“the 2009 PSI hearing”) 

was held. At this hearing, the Acting Assistant Attorney General, Tax Division, U.S. 

Department of Justice, John DiCicco, discussed the content of the UBS deferred prosecution 

agreement.82 Specifically, Mr. DiCicco stated that UBS acknowledged that, beginning in 2000 

and continuing through 2007, it participated in a scheme to defraud the United States and the IRS 

through its cross-border business. UBS engaged in such activities through its private bankers 

and managers that actively facilitated the creation of accounts in the names of offshore 

companies, allowing U.S. taxpayers to conceal their ownership of, or beneficial interest in, the 

accounts in an effort to evade U.S. tax reporting and payment requirements. Furthermore, UBS 

admitted that it had failed to implement effective controls to detect and prevent the unlawful 

activity, that it had failed to initiate an effective investigation into credible allegations of such 

unlawful activity, and that it had failed to take effective action to stop such activities. 

In addition to making the payment to the United States of $780 million, UBS also agreed 

to the following conditions: 

 UBS will provide the United States with voluminous and detailed records concerning 

accounts held directly or through beneficial arrangements by United States persons. 

UBS has a continuing obligation to cooperate with the criminal investigation and any 

 81 See United States v. UBS AG, 09-60033-CR-COHN (S.D. Fl.). 

82 Written Testimony of John DiCicco, Acting Assistant Attorney General, Tax Division, U.S. 

Department of Justice, Hearing on Tax Haven Banks and U.S. Tax Compliance—Obtaining the Names of 

U.S Clients with Swiss Accounts Before the Permanent Subcomm. on Investigations, S. Comm. On 

Homeland Sec. and Governmental Affairs, 111th Cong., Mar. 4, 2009. 
33 

resulting prosecutions, and also to search for and turn over any additional records 

found concerning such accounts. 

 UBS will terminate its U.S. cross-border business. As part of this process, the 

accounts of United States customers covered by the deferred prosecution agreement 

will be closed with any underlying assets liquidated. All resulting proceeds will be 

distributed to the U.S. owners in dollar-denominated instruments. 

 UBS’s challenge to the government’s motion to enforce the John Doe summons, 

including the filing of an appeal from an adverse ruling, will not be considered a 

breach of the deferred prosecution agreement. Upon completion of that litigation, 

however, if the Court were to order UBS to produce the documents sought and hold 

UBS in contempt for failure to do so, UBS’s noncompliance may be determined to be 

a material breach of the deferred prosecution agreement, permitting the government 

to proceed with the criminal prosecution of UBS. 

 UBS’s failure to comply with a term of the deferred prosecution agreement may, in 

the sole discretion of the government, be deemed a material breach, permitting the 

government to proceed with the criminal prosecution of UBS. If UBS fully complies 

with the deferred prosecution agreement, the criminal information will be dismissed. 

 The deferred prosecution agreement only applies and provides protection for the bank 

as to the specific conduct set forth within the agreement. 

At the 2009 PSI hearing, Mr. Branson again testified on behalf of UBS. In his testimony, 

he addressed the progress UBS has made with respect to the requirements under the deferred 

prosecution agreement.83 Mr. Branson discussed the petition filed by the IRS to have the court 

enforce the John Doe summons. Mr. Branson also discussed how UBS has sought to comply 

with the summons without violating Swiss law. As Swiss law prohibits UBS from producing 

responsive information located in Switzerland, Mr. Branson explained that UBS has been able to 

produce only information responsive to the summons that is located in the United States. He 

stated his belief that UBS has now complied with the summons to the fullest extent possible 

without subjecting its employees to criminal prosecution in Switzerland.84 

Mr. Branson went on to state his belief that further enforcement of the summons would 

be in violation of the original QI agreement and the income tax treaty between Switzerland and 

the United States. With respect to the QI agreement entered into between UBS and the IRS in 

 83 Written Testimony of Mark Branson, Chief Financial Officer of UBS AG, Hearing on Tax 

Haven Banks and U.S. Tax Compliance − Obtaining the Names of U.S Clients with Swiss Accounts 

Before the Permanent Subcomm. on Investigations, S. Comm. On Homeland Sec. and Governmental 

Affairs, 111th Cong., March 4, 2009. 

84 The Swiss banking authority with the permission of the Swiss government had allowed UBS to 

agree to transfer approximately 250 names of United States resident account holders for which there is a 

reasonable suspicion of conduct constituting what Swiss law considers fraudulent acts to the Justice 

Department as part of the deferred prosecution agreement. See Lee Sheppard, Don’t Ask, Don’t Tell, Part 

III: UBS’s Sweet Deal, 122 Tax Notes 1050 (2009). 
34 

2001, it expressly recognized that UBS would open and maintain accounts covered by Swiss 

financial privacy laws for U.S. clients who chose not to provide a Form W-9, as long as those 

accounts held no U.S. securities. According to Mr. Branson, as UBS legitimately maintained 

those accounts consistent with the QI agreement, the summons seeks client information that the 

IRS itself agreed would be kept confidential. Additionally, the income tax treaty between 

Switzerland and the United States discusses those circumstances under which client names and 

account information located in Switzerland may be shared with U.S. authorities. Mr. Branson, 

therefore, expressed his belief that the John Doe summons is inconsistent with long-standing 

treaty obligations and this matter should, instead, be resolved through diplomatic measures. 

According to an article published in the New York Times on March 18, 2009, the Justice 

Department has extended its investigation into UBS offshore tax fraud to include independent 

lawyers and accountants in Switzerland and the United States who worked with UBS.85 Three 

individuals currently under investigation include Beda Singenberger, a Zurich based accountant 

who runs a boutique finance and trust company called Sinco Trust, as well as Matthias W. 

Rickenbach and Andreas M. Rickenbach, two brothers that are lawyers at Rickenbach & Partner, 

a law firm in Zurich and Geneva. A criminal case is being built against these individuals who 

are suspected of having traveled with Swiss UBS bankers to the U.S. to work with American 

clients to evade taxes. 

2008 PSI Report

The 2008 PSI Report includes several recommendations for strengthening the QI 

program, based primarily on its investigation of the UBS matter and a similar investigation of the 

Liechtenstein Global Trust Group (discussed below). First, the report recommends that QIs 

should be required to file Forms 1099 for all U.S. persons who are clients (whether or not the 

client has U.S. securities or receives U.S.-source income) and for all accounts beneficially owned 

by U.S. persons, even if the accounts are held in the name of a foreign corporation, trust, 

foundation, or other entity. 

The report also recommends that the IRS close what the report describes as a gap in the 

QI program by expressly requiring QIs to apply to their QI reporting obligations all information 

obtained through their know-your-customer procedures to identify the beneficial owners of 

accounts. The 2008 PSI Report claims that the rules of the QI program are distinct from the 

know-your-customer rules that apply for due diligence purposes under the internal laws of the 

country in which the QI is located, although a QI must apply such know-your-customer rules as a 

prerequisite for entering into the QI program. As a result, the 2008 PSI Report concludes, some 

QIs, including UBS, have apparently taken the position that information the QI acquires about a 

particular customer as a result of satisfying the QI’s requirements under applicable know-yourcustomer rules does not necessarily affect the determination of that customer’s status for 

purposes of the QI program. Thus, for example, the report states that such a QI may take the 

position that it can rely on a certification of non-U.S. status (technically a Form W-8BEN) 

 85 Lynnley Browning, U.S. Extends Its Inquiry of Offshore Tax Fraud, N.Y. Times, Mar. 18, 

2009, at B3. 
35 

proffered by a foreign nominee owner (e.g., a Liechtenstein foundation) to establish that the 

nominee in fact is the beneficial owner of an account for withholding and reporting purposes 

under the QI program, even if the QI knows, as a result of satisfying the applicable know-yourcustomer rules, that a U.S. person is the actual beneficial owner of the account. 

The better reading of the model QI agreement is that the gap identified by the 2008 PSI 

Report does not in fact exist, although admittedly the model QI agreement might be revised to 

make the point more explicitly. Very simply, a QI is a “withholding agent” for all U.S. tax 

purposes. The QI agreement expands the obligations of withholding agents under the relevant 

Treasury regulations,86 but does not override them. Under the regulations (and, indeed, under the 

model QI agreement itself87), a withholding agent may not accept a certification of non-U.S. 

status (a Form W-8BEN) if the withholding agent has actual knowledge that the beneficial owner 

of the relevant income (the taxpayer) is a U.S. person. There is no obvious basis for concluding 

that information obtained through know-your-customer rules is irrelevant for this purpose. 

Moreover, the relevant Treasury regulations also provide that a withholding agent effectively 

must compare a Form W-8BEN that it receives with other account information in its possession, 

and reject the Form W-8BEN if it is inconsistent with that information.88

As a result, a straightforward reading of the model QI agreement, in the context of the 

Treasury regulations under which the QI program exists, is that a foreign QI cannot accept a 

Form W-8BEN certification of non-U.S. status where it has actual knowledge (whether obtained 

through know-your-customer rules or otherwise) that the beneficial owner of the income in 

question is a U.S. person or where the certification is inconsistent with other account 

information. The gap, to the extent one exists, is with the consistent treatment of foreign 

corporations, in particular, as entities separate from their owners for both know-your-customer 

and withholding tax purposes, but this is a different (and larger) issue. 

The 2008 PSI Report also recommends that the IRS broaden QI audits to require external 

auditors to report evidence of fraudulent or illegal activity.89 The report also recommends that 

 86 Principally, Treasury Regulation sections 1.1441-1 and 1.1441-7. 

87 See Section 5.10 of the model QI agreement, as set forth in Rev. Proc. 2000-12, 2000-1 C.B. 

387. 

88 Treasury Regulation section 1.1441-7(b)(4). 

89 A similar recommendation was made in a 2007 report prepared by the Government 

Accountability Office (the “GAO”) on the QI program. The report generally found that the QI program 

provides some assurance that tax on U.S.-source income sent offshore is properly withheld and reported. 

However, the report offered four recommendations for the IRS to further improve the QI program. In 

addition to recommending that external auditors report fraud or illegal acts, the report recommended that 

the IRS: (1) measure U.S. withholding agents’ reliance on self-certified documentation and use that data 

in its compliance efforts; (2) determine why some funds are reported to unknown jurisdictions and to 

unidentified recipients and take appropriate steps to recover withholding taxes that should have been paid 

and to better ensure that U.S. taxes are withheld; and (3) require electronic filing of forms in QI 

agreements whenever possible. Government Accountability Office, Tax Compliance: Qualified 
36 

the Treasury Department penalize banks located in tax haven jurisdictions that impede U.S. tax 

enforcement or fail to disclose accounts held directly or indirectly by U.S. clients by terminating 

their QI status. The report further recommends that Congress amend section 311 of the Patriot 

Act to allow the Treasury Department to bar such banks from doing business with U.S. financial 

institutions. 

Potential modifications under IRS consideration

During 2008, the IRS announced that a series of potential modifications to the QI program to 

address certain of the issues raised by the PSI report and the UBS investigation. These 

modifications are described further below. The modifications do not, however, purport to 

address compliance and enforcement issues relating to bank secrecy laws. Section III of this 

pamphlet addresses that subject. 

Announcement 2008-98

On October 14, 2008, the IRS released Announcement 2008-98, 2008-44 I.R.B. 1087, 

which describes proposed amendments to the QI agreement and to the QI audit guidance. The 

announcement contains three proposed changes, which are proposed to be effective for calendar 

years beginning after December 31, 2009. The first proposed change relates to internal controls; 

it requires a QI to ensure that specific employees are responsible for oversight of the QI’s 

performance under the QI agreement, and that those employees take steps to prevent, deter, 

detect, and correct failures in performance. In addition, the QI agreement will be amended to 

require a QI to notify the IRS whenever the QI becomes aware of a material failure of internal 

controls relating to its performance under the QI agreement, any employee allegations of such 

failures, or any investigation by regulatory authorities of such failures. The IRS does not 

anticipate automatically terminating a QI agreement as a result of any such notice; instead, the 

IRS expects prompt notification to allow the IRS and the QI to work together to remedy such 

failures. 

The second proposed change relates to additional fact finding during the basic fact 

finding phase (phase 1) of a QI audit to enable the IRS to evaluate risk. The QI audit guidance 

will be amended to add an audit procedure testing certain accounts for characteristics that 

suggest that a U.S. person has authority over the account. Such information will allow the IRS in 

the follow up fact finding phase (phase 2) of the audit process to evaluate the risk of any failure 

of controls and, if necessary, to request that the external auditor perform additional audit 

procedures. 

Furthermore, the QI audit guidance will be amended to add additional procedures for fact 

gathering by the external auditor relating to the IRS’s evaluation of the risk of a material failure 

of internal controls. These procedures will include, for instance, identifying the persons charged 

with oversight of performance under the QI agreement and the authority given them to prevent, 

deter, detect, and correct such failures on the part of other operational personnel. The external 

 

Intermediary Program Provides Some Assurance that Taxes on Foreign Investors Are Withheld and 

Reported, but Can Be Improved, GAO-08-99 (Dec. 19, 2007). 
37 

auditor will be required to report any facts and circumstances observed in the course of its audit 

that reasonably relate to the evaluation by the IRS of the risk of a material failure of internal 

controls. 

The third proposed change relates to oversight and review of the QI audit. The QI audit 

guidance will be amended to require a QI’s external auditor to associate a U.S. auditor with the 

audit and to require the U.S. auditor to accept joint responsibility for the performance of the 

procedures under the QI audit guidance. It is intended that joining a U.S. auditor to the QI audit 

will assure appropriate application of U.S. withholding rules and enhance accuracy and 

accountability in the audit process. 

In addition to announcing the proposed changes, Announcement 2008-98 solicited public 

comments regarding the proposed changes. The government asked that such comments be 

submitted by February 28, 2009. Several comments were received. In general, the commenters 

objected to the proposed changes on the grounds that the commenters believed the proposed 

changes would impose additional costs and burdens on QIs with no, or only marginal, benefit to 

the IRS. Nevertheless, in a few instances, commenters offered specific technical suggestions in 

the event the IRS decides not to abandon completely the proposed changes. These suggestions 

generally were intended to make the proposed changes more understandable and consistent with 

the existing model QI agreement and QI audit guidance. 

IRS Commissioner’s testimony

The IRS Commissioner indicated in congressional testimony before the PSI in July 2008, 

and more recently before the PSI and Senate Committee on Finance in March 2009, that the IRS 

may make several modifications to the QI program intended to further improve its effectiveness 

in enhancing compliance.90 

In particular, in his 2008 PSI testimony, the Commissioner indicated that the IRS was 

considering changing the regulations to require QIs to look through trusts or certain other 

offshore entities to determine if U.S. taxpayers are the beneficial owners of the accounts. 

Additionally the IRS may require external auditors that conduct the audits required under the QI 

agreements to report to the IRS indications of fraud or other illegal acts. Currently, there is no 

requirement for external auditors to make such reports to the IRS. The Commissioner indicated 

that the IRS was engaged in discussions with the major accounting firms that perform QI audits 

to identify ways to enhance the detection and reporting of violations of the QI agreement. 

As recommended by the 2008 PSI Report, the Commissioner testified in July 2008, and 

again at both March 2009 hearings, that the IRS and Treasury are also considering regulations 

that would expand the QI program to require information reporting on additional sources of 

 90 See Shulman 2008 Testimony, supra; Shulman 2009 SFC Testimony, supra; and Written 

Testimony of Douglas H. Shulman, Commissioner, Internal Revenue Service, Hearing on Tax Haven 

Banks and Offshore Compliance—Obtaining the Names of U.S. Clients with Swiss Accounts Before the 

Permanent Subcomm. on Investigations, S. Comm. on Homeland Sec. and Governmental Affairs, 111th 

Cong., Mar. 4, 2009 [hereinafter Shulman 2009 PSI Testimony]. 
38 

income for accounts held by U.S. persons. This reporting could include foreign as well as U.S.-

source income; QIs are currently required to report only certain U.S.-source income received by 

U.S. customers who are not otherwise exempt from information reporting and backup 

withholding. 

The Commissioner’s March testimonies also include two additional measures to enhance 

and strengthen the QI program that are currently under consideration by the IRS and Treasury. 

The first is to strengthen the QI documentation rules, and the second is to require withholding for 

accounts in cases in which documentation is considered insufficient. The Commissioner 

provided little detail on either of these measures. 

Since the Commissioner’s July 2008 testimony, IRS and Treasury Department officials 

have made several public statements indicating that proposed regulations to further improve the 

QI program may be forthcoming in the near future. Few details, other than the release of 

Announcement 2008-98, discussed above, about these proposed regulations are available. 

However, it is possible that these proposed regulations, whenever issued, may include some, or 

all, of the changes the Commissioner indicated are under consideration. 

Voluntary disclosure procedures

On March 26, 2009, the IRS issued a statement, together with internal field guidance, 

announcing voluntary disclosure procedures that may be applied to individual taxpayers with 

unreported offshore accounts and entities. In return for engaging in this voluntary disclosure, 

these taxpayers can avoid criminal prosecution. In general, the guidance provides that taxpayers 

who make voluntary disclosures will be required to make all delinquent filings (e.g., FBAR and 

other information returns), pay back-taxes and interest for six years, and an accuracy or 

delinquency penalty for all six years. Additionally, such taxpayers will be required to pay a 

penalty equal to 20 percent of the highest asset value in any unreported bank account at any time 

during the six-year period. The penalty amount may be reduced to only five percent if the 

taxpayer did not open the account, there was no account activity while the taxpayer controlled 

the account, and all taxes have been paid on the account. The IRS’s offer took effect March 23, 

2009, and is available for only six months.91

 91 Kristen A. Parillo & Jeremiah Coder, IRS Reduces Penalties on Voluntarily Disclosed 

Offshore Accounts, 2009 Tax Notes Today 57-2.
39 

III. BANK SECRECY 

Introduction

In connection with the implementation of the QI program in 2000, the IRS issued 

Announcement 2000-48 describing the approach that it intended to take in determining whether 

financial institutions in a particular country would be permitted to become QIs. The 

Announcement describes the QI program as a “paradigm shift to greater self-regulation,” and 

states that Treasury and IRS believe that it is appropriate to permit the self-regulation envisioned 

by the QI system only under circumstances in which Treasury and IRS have confidence that such 

self-regulation may be effective. 

In that regard, Announcement 2000-48 indicated that the Treasury Department and the 

IRS considered restricting the QI program to institutions operating in jurisdictions with which 

the United States has a bilateral tax treaty or tax information exchange agreement. However, in 

response to taxpayer requests that the QI program permit financial institutions to act as QIs in all 

jurisdictions in which they do business, the IRS decided not to limit the program to institutions in 

treaty jurisdictions. 

Instead, Treasury and the IRS determined that the key criterion for qualification of a 

jurisdiction as eligible for the QI program was the existence of “know-your-customer rules.” 

Announcement 2000-48 described know-your-customer rules as “a vital component of adequate 

self-regulation” and states that the IRS generally will not extend the QI program to any country 

that does not have know-your-customer rules or that has unacceptable know-your-customer 

rules.92 Thus, as described earlier, the IRS, in Rev. Proc. 2000-12, required that a financial 

institution applying to become a QI provide detailed information regarding the know-yourcustomer rules applicable in each jurisdiction in which the institution wished to act as a QI. 

The IRS does not require that an institution applying to become a QI provide information 

regarding bank secrecy or other laws that could apply in a foreign jurisdiction to restrict 

disclosure of the institution’s customers to the IRS or otherwise affect the IRS’s ability to 

enforce the terms of the QI agreement. Instead, Announcement 2000-48 stated that the IRS 

expected to apply more rigorous oversight to financial institutions or their branches in 

jurisdictions that are tax havens or bank secrecy jurisdictions and show an unwillingness to 

cooperate with the United States to reform their practices relating to transparency and the 

provision of tax information.. In addition, the Announcement indicated that QIs should not 

assume that, merely because they have an agreement covering a business in a particular 

jurisdiction, such jurisdiction would not later be identified as a specified tax haven or secrecy 

jurisdiction. However, Announcement 2000-48 indicated that any enhanced audit requirements 

or stricter enforcement standards would be imposed only on agreements entered into or renewed 

after identification of the jurisdiction as a specified tax haven or secrecy jurisdiction. 

 92 However, the IRS will permit a branch of a financial institution located in such a country to act 

as a QI if the branch is part of an entity organized in a country that has acceptable know-your-customer 

rules and the entity agrees to apply its home country know-your-customer rules to the branch. 
40 

Announcement 2000-48 further stated that the IRS expected that it would agree to renew 

a QI agreement or, in the case of new agreements that become effective on or after January 1, 

2004, enter a new agreement for QIs in a particular country only if the IRS receives a 

certification from the Treasury Department that the country has effective rules and/or procedures 

for providing tax information to the United States for both civil tax administration and criminal 

tax enforcement purposes (including, for example, under an income tax treaty or a tax 

information exchange agreement), or has taken significant steps towards achieving such effective 

provision of information. As described further below, the actions taken by the Treasury 

Department and IRS in connection with the execution of a TIEA with Liechtenstein are 

consistent with this approach. 

Liechtenstein 

On July 17, 2008, the PSI released a report (prepared in connection with a hearing held 

that day) examining the business practices of the Liechtenstein Global Trust Group (“LGT”) in 

Liechtenstein and UBS in Switzerland, both of which are alleged to have facilitated tax evasion 

by U.S. clients of those institutions.93 The report describes practices employed by LGT, a 

leading Liechtenstein financial institution that is alleged to have assisted U.S. clients in hiding 

assets offshore during the period from 1998 to 2007. According to the report, those practices 

included maintaining U.S. client accounts that were not disclosed to U.S. tax authorities; 

advising U.S. clients to open accounts in the name of Liechtenstein foundations to hide their 

beneficial ownership of the account assets; advising clients on the use of complex offshore 

structures to hide ownership of assets outside of Liechtenstein; and establishing “transfer 

corporations” to disguise asset transfers to and from LGT accounts. According to the report, 

LGT also advised clients on how to structure their investments to avoid disclosure to the IRS 

under the QI program.94 

The LGT inquiry originated with an investigation by German authorities into the role of 

LGT in facilitating the evasion of German tax.95 On February 25, 2008, the German authorities 

announced that they would share the information they had obtained in regard to LGT with 

authorities in other countries whose residents had utilized Liechtenstein to engage in tax 

evasion.96 On February 26, 2008, the IRS issued a news release stating that it was initiating 

 93 Tax Haven Banks and U.S. Tax Compliance, Permanent Subcommittee on Investigations of 

the Committee on Homeland Security and Governmental Affairs of the U.S. Senate (July 17, 2008). The 

UBS matter is described in Section II of this document. 

94 The QI program is discussed in detail in Section II of this document. 

95 For additional background on this investigation, see Nicholas Kulish & Carter Dougherty, 

Deutsche Post Chief Under Tax Inquiry, N.Y. Times, Feb. 15, 2008, at C4; Randall Jackson, The Mouse 

that Roared: Liechtenstein’s Tax Mess, 49 Tax Notes Int’l 707 (2008) [hereafter Jackson, The Mouse that 

Roared]; Mark Landler, Liechtenstein Seeks Man Suspected of Selling Information that Led to Tax 

Scandal, N.Y. Times, Mar. 13, 2008, at C3. 

96 Jackson, The Mouse that Roared, supra.
41 

enforcement actions involving more than 100 U.S. taxpayers to ensure that they properly 

reported income, and paid taxes, in connection with accounts in Liechtenstein.97 The news 

release also stated that the tax authorities in Australia, Canada, France, Italy, New Zealand, 

Sweden, the United Kingdom, and the United States were working together to address the use of 

Liechtenstein accounts for tax evasion purposes. 

Both the PSI report and news accounts of the IRS and other investigations into the 

conduct of LGT suggest that Liechtenstein’s favorable treatment of foundations, together with its 

bank secrecy laws, was important to LGT’s ability to shield client assets from discovery by U.S. 

and other tax authorities.98 In Liechtenstein, according to these accounts, foundations are 

effectively taxed at a very low rate,99 are permitted to benefit their founders and their founders’ 

families,100 and are permitted to open bank accounts in their own names outside Liechtenstein 

(which provides foundation owners with ready access to cash outside Liechtenstein). Efforts to 

trace the owners or activities of nonpublic foundations are typically precluded by Liechtenstein’s 

bank secrecy laws. Although these foundations function effectively as foreign trusts, the U.S. 

clients of LGT who established these foundations apparently did not file Forms 3520 (Annual 

Return to Report Transactions with Foreign Trusts and Receipt of Foreign Gifts) or 3520-A 

(Annual Information Return of Foreign Trust with a U.S. Owner), and LGT did not disclose the 

existence of bank accounts opened by these foundations (whether at LGT or other financial 

institutions) to the IRS. The U.S. clients typically did not file the FBAR form to disclose the 

existence of these accounts to the Treasury Department, apparently taking the position that only 

the nominal owner of the accounts were required to file. 

On December 8, 2008, the U.S. signed a tax information exchange agreement (“TIEA”) 

with Liechtenstein.101 Under the terms of this agreement, the United States may seek 

information from Liechtenstein on all types of U.S. federal taxes, and in both civil and criminal 

tax matters, without regard to whether Liechtenstein needs the information for its own tax 

purposes or whether the conduct being investigated would constitute a crime under its laws. 

According to the terms of the TIEA, however, Liechtenstein must change its banking secrecy 

laws that prevent it from complying with the agreement. Specifically, Article 13 of the TIEA 

 97 News Release, Internal Revenue Service, IRS and Tax Treaty Partners Target Liechtenstein 

Accounts, IR-2008-26 (Feb. 26, 2008). 

98 See 2008 PSI Report at 36-37; Jackson, The Mouse that Roared, supra.

99 Foundations are generally exempt from income taxes in Liechtenstein. However, they are 

subject to an annual capital tax, which is generally equal to the greater of 0.1 percent of the foundation’s 

capital or CHF 1,000 (approximately U.S. $980). Other taxes may apply, including a stamp duty on 

formation (equal to no more than 1.0 percent of taxable capital) and a tax on the transfer of securities 

(equal to 0.15 percent for Liechtenstein securities and 0.30 percent for foreign securities).

100 Liechtenstein does not tax distributions to beneficiaries residing outside Liechtenstein. 

101 Agreement Between the Government of the United States of America and the Government of 

the Principality of Liechtenstein on Tax Cooperation and the Exchange of Information Relating to 

Taxes. 
42 

states: “Legislation necessary to comply with and give effect to the terms of this Agreement 

shall be enacted by December 31, 2009, to the extent necessary.” 102 As a result of Liechtenstein 

entering into this TIEA, the U.S. has agreed to extend Liechtenstein’s treatment as an eligible QI 

jurisdiction until December 31, 2009; prior to this agreement, that status was set to expire on 

December 31, 2008. 

 102 In this regard, the Liechtenstein government released a statement on March 12, 2009 that it 

“accepts the OECD standards on transparency and information exchange in tax matters and supports the 

international measures against noncompliance with tax laws.” Andrew Ross Sorkin, Liechtenstein 

Pledges Tax Openness, N.Y. Times Deal Book, Mar. 12, 2009. 
43 

A. Bank Secrecy: General Background 

The degrees of protection afforded financial information range from the relative 

transparency in the United States to the traditional opacity of jurisdictions such as Switzerland, 

Liechtenstein or the Cayman Islands. The term “bank secrecy” generally refers to a legal 

standard, whether judicial or statutory in origin, which prevents governmental access to the 

financial information necessary to ascertain beneficial ownership and enforce tax, securities and 

financial regulations. The limitations may apply only to certain entities operating within the 

jurisdiction or may apply only to the sharing of information with a foreign jurisdiction,103 and are 

often reinforced by civil or criminal penalties. 

The difficulties in piercing the “bank secrecy” of tax haven jurisdictions are related to the 

centuries-long tradition against one jurisdiction assisting another jurisdiction with collection of 

its taxes. This doctrine, known as the “Revenue Rule,” is rooted in common law and sovereign 

immunity. It is often referred to as the Lord Mansfield Rule, who stated “For no country ever 

takes notice of the revenue laws of another.”104 Although its vitality and scope have been 

questioned, most recently in Pasquatino v. United States,

105 the doctrine remains a cornerstone 

of all common law jurisdictions, as well as many others, and is abrogated only by state-to -state 

negotiations, in the form of multilateral or bilateral international agreements or treaties.106 

Tensions arise when the confidentiality of the information sought is in conflict with the other 

state’s interest in obtaining information relevant to law enforcement. 

In the United States, rights to financial privacy are generally governed by statute, both in 

tax matters and other financial information, and protect one from public dissemination of 

information. The government’s need to have access to financial information to assist it in 

detecting and preventing money-laundering led to enactment of the Bank Secrecy Act of 1970,107

which requires U.S. financial institutions to maintain records and submit reports on certain cash 

or cash equivalent transactions. Since 1974, federal statute has established controls over how 

federal agencies gather, maintain and use personal information, including financial 

information.108 The Right to Financial Privacy Act ensures that the government will not have 

access to information without service of a valid subpoena, consent of an account holder or as 

 103 “Tax Co-operation: Towards a Level Playing Field,” 2008 Assessment by the Global Forum 

on Taxation, OECD, tabulates the numerous permutations by which information that is available to the 

host jurisdiction may or may not be shared with a requesting state. 

104 Holman v. Johnson, 98 Eng. Rep. 1120 (K.B. 1775), cited in AG of Canada v. R.J. Reynolds 

Tobacco Holdings, Inc., 268 F.3d 103, cert. denied, 537 U.S. 1000 (2002). 

105 544 U.S. 349; 125 S. Ct. 1766; 161 L. Ed. 2d 619 (2005) 

106 The United States has mutual assistance in collection agreements with five treaty partners, 

i.e., France, Canada, Sweden, Denmark, and the Netherlands. 

107 31 U.S.C. Secs. 5311-5314e, 5316-5332e; 12 U.S.C. secs. 1829b and 1951-1959e. 

108 Privacy Act of 1974, 5 U.S.C. sec. 552a. 
44 

provided in the Code.109 Further prohibitions on the disclosure of tax return information were 

enacted in 1976.110 

Because the United States taxes its citizens and residents on their worldwide income,111 it 

frequently needs foreign-based financial information to verify the accuracy of reporting by U.S. 

taxpayers. Obtaining that information requires a balancing of the U.S. interest in tax 

enforcement with the interests of the other state in maintaining confidentiality. In Société 

Internationale v. Rogers,

112 the Supreme Court articulated a basic rule of comity, holding 

unanimously that a United States district court could not ignore the interests of the foreign state 

in determining whether it would compel production of foreign based documents. Since then, 

courts balancing these conflicting U.S. and foreign interests113 have tended to give greater weight 

to the United States’ interests in cases involving money laundering or drug dealing, than in those 

involving tax compliance. Thus, in U.S. v. Bank of Nova Scotia, the court enforced a grand jury 

subpoena served in the United States for records maintained in the Cayman Islands, despite 

claims that the bank secrecy laws of that jurisdiction would not permit production.114 In that 

case, the records were sought in connection with prosecution of money laundering and possible 

drug dealing. 

By contrast, in cases in which the only U.S. law enforcement interest was tax compliance, 

results have been mixed. Although the Ninth Circuit Court of Appeals has enforced a grand jury 

 109 12 U.S.C. 3402. 

110 I.R.C. sec. 6103; 

111 Cook v. Tait, 265 U.S. 47 (1924) 

112 357 U.S. 197 (1958) 

113 The balancing test is summarized in the Restatement 3rd on Foreign Relations Law as 

follows: (a) A court or agency in the United States, when authorized by statute or rule of court, may order 

a person subject to its jurisdiction to produce documents, objects, or other information relevant to an 

action or investigation, even if the information or the person in possession of the information is outside 

the United States; (b) failure to comply with an order to produce information may subject the person to 

whom the order is directed to sanctions, including finding of contempt, dismissal of a claim or defense, or 

default judgment, or may lead to a determination that the facts to which the order was addressed are as 

asserted by the opposing party; and (c) in deciding whether to issue an order directing production of 

information located abroad, and in framing such an order, a court or agency in the United States should 

take into account the importance to the investigation or litigation of the documents or other information 

requested; the degree of specificity of the request; whether the information originated in the United 

States; the availability of alternative means of securing the information; and the extent to which 

noncompliance with the request would undermine important interests of the United States, or compliance 

with the request would undermine important interests of the state where the information is located. 

Restatement 3d, Foreign Relations, sec. 441(1). 

114 691 F2d 1384 (11th Cir.1982), cert. denied 462 U.S. 1119 (1983). 
45 

subpoena for Swiss business records in a tax fraud case,115 the Seventh Circuit Court of Appeals 

refused to enforce IRS administrative summons for Greek bank records in a tax case.116 

In balancing the conflicting interests of the U.S. and foreign interests, courts will examine 

whether there exists a reasonable alternative to obtaining the requested information.117 Another 

alternative means of obtaining documents from a foreign jurisdiction is through negotiations 

between the states, usually in the context of an income tax treaty or a tax information exchange 

agreements. The information exchange procedures available under treaties are described in 

Section IV of this document. The remainder of this Section III describes the statutory and other 

unilateral measures available to the IRS under present law in connection with obtaining offshore 

information. 

 115 United States v. Vetco, 691 F.2d 1281 (9th Cir.1981). 

116 United States v. First National Bank of Chicago, 699 F. 2d 341 (7th Cir. 1983). 

117 Restatement 3d, Foreign Relations, sec. 441(1)(c). 
46 

B. Unilateral Measures to Facilitate Production of Foreign-Based Documents 

In response to the difficulties in compelling production of information across borders, a 

variety of statutory measures have been enacted to require greater voluntary disclosure, at the 

risk of incurring penalties or adverse findings. These include specific authority for the Tax 

Court to order foreign entities invoking its jurisdiction to provide all relevant information,118 and 

a statutory exclusionary rule affecting admissibility of foreign based documents that had not 

been produced earlier in administrative or judicial proceedings.119 Each is a valuable tool, but is 

limited to the situation in which an offshore transaction has been identified and selected for 

examination; they do not assist in identifying an offshore transaction. In the latter situation, the 

IRS can make use of its authority to issue so-called “John Doe” summons, although recent 

experience has shown that enforcement of these summonses can be particularly difficult when 

the information sought is located in jurisdictions with restrictive bank secrecy laws. 

1. Section 7456(b) 

Any party who initiates proceedings in the United States Tax Court may be subject to an 

order compelling production of offshore materials that are subject to that party’s control. The 

term control is not limited to legal control. If the party establishes to the Court’s satisfaction that 

it is unable to produce the materials in court, it may be ordered to make the documents available 

for inspection wherever situated. Although the Tax Court has attempted to rely on this provision 

to order production of materials, despite local law prohibitions against disclosure, it has met with 

limited success. The orders requiring production have been used to enforce government requests 

for documents as well as interrogatories,120 and may require that the party appear personally at 

hearings or proceedings. The sanctions for failure to comply may include entry of a default 

judgment, striking pleadings, or adverse findings as to the issues to which the documents relate. 

2. Section 982 exclusionary rules 

In 1984, Congress enacted section 982, which limits the evidentiary value of foreignbased information by barring its admissibility in a civil proceeding if it was not timely produced 

to the IRS in response to a formal request for foreign based documents. The provision permits a 

defense of reasonable cause for non-production, but specifically precludes a defense that foreign 

law prohibits disclosure of such information.121 The exclusionary rule has been upheld,122 and is 

useful in prompting compliance with requests for information that are otherwise difficult to 

enforce. Nevertheless, the exclusion is only of value in denying a taxpayer’s ability to use the 

 118 Sec. 7465(b) 

119 Sec. 982 

120 Gerling International Insurance Co. v. Commissioner, 839 F. 2d 131 (3rd Cir. 1988); Hong 

Kong Shanghai Banking Corporation v. Commissioner, 85 T.C. (1985)

121 Sec. 982(b)(2). 

122 Flying Tigers Oil Co. v. Commissioner, 92 T.C. 1261 (1989). 
47 

information in defense of its own position. It does not compel a taxpayer to produce information 

in its possession that would be adverse to its position or that would help the IRS develop and 

support an issue identified in an examination. 

3. John Doe summonses 

The IRS has broad statutory authority to require production of information in the course 

of an examination.123 A request for information in the form of an administrative summons is 

enforceable if the IRS establishes its good faith, as evidenced by the four factors enunciated by 

the Supreme Court in United States v. Powell.

 124 The Powell factors require that the 

information is sought for a legitimate law enforcement purpose, is of a type that will shed light 

on the subject of the examination, is not already in the possession of the IRS and that the IRS has 

complied with all applicable statutory requirements such as service of process. Subsequent to 

United States v. Powell, the legitimacy of using an administrative summons in furtherance of an 

investigation into criminal violations was validated in United States v. LaSalle National Bank,125

in which the Supreme Court determined that the dual civil and criminal purpose was legitimate, 

so long as there had not yet been a commitment to refer the case for prosecution. 

The use of this summons authority to obtain information from third-parties is subject to 

greater procedural safeguards,126 but otherwise the same good faith elements are analyzed to 

determine whether the summons should be enforced. When the existence of a possibly noncompliant taxpayer is known but not his identity, as in the case of holders of offshore bank 

accounts, or investors in particular abusive transactions, the IRS is able to issue a summons to 

learn the identity of the taxpayer, but must first meet significantly greater statutory requirements, 

to guard against fishing expeditions. 

An effort to learn the identity of unnamed “John Does” requires that the United States 

seek judicial review in an ex parte proceeding prior to issuance of the summons. In its 

application and supporting documents,127 the United States must establish that the information 

sought pertains to an ascertainable group of persons, that there is a reasonable basis to believe 

that taxes have been avoided, and that the information is not otherwise available.128 The 

reviewing court does not determine whether the summons will ultimately be enforceable. Once a 

court has determined that the predicate for issuance of a summons is met, the summons is served, 

and the summoned party served may challenge enforcement of the summons, based on the 

 123 Sec. 7602. 

124 United States v. Powell, 379 U.S. 48 (1964). 

125 437 U.S. 298 (1978); codified in section 7609(c) 

126 Sec. 7609. 

127 Sec. 7609(h)(2) provides that the determination will be made ex parte, solely on the 

pleadings. 

128 Sec. 7609(f). 
48 

Powell factors. It is not entitled to judicial review of the ex parte ruling that permitted issuance 

of the summons.129 

If a taxpayer whose liability is the subject of the summons either initiates or intervenes in 

a proceeding to challenge the enforcement of the summons, the limitations period for the tax year 

under investigation is suspended during the pendency of the proceeding.130 The taxpayer whose 

identity is at issue in a John Doe summons would not initiate or intervene in a proceeding, and 

may not know of the proceeding. Nevertheless, enforcement of a John Doe summons is likely to 

be subject to time-consuming challenges, possibly warranting an extension of the limitations 

period. 

Under current law, the limitations period for the tax year under investigation is suspended 

beginning six months after the service of a John Does summons, and ends with the final 

resolution of the response to the summons.131 The chronology of the UBS investigation 

(described previously in Section II) illustrates the time-consuming nature of the process. The 

basis for requiring six months to elapse between service of the summons, after a court has found 

that there is a likelihood of non-compliance by an ascertainable group of taxpayers, is less 

apparent. 

Offshore Credit Card Program 

The Offshore Credit Card Program (“OCCP”), initiated by the IRS in 2000, illustrates the 

type of situation in which the IRS has sought to use John Doe summonses. The OCCP was 

designed to identify taxpayers who hide unreported income in offshore bank accounts and access 

the funds through credits cards issued by those banks. Between 2000 and 2002, the IRS issued a 

series of “John Doe” summonses to a variety of financial and commercial businesses to obtain 

information and records relating to U.S. residents who held credit, debit, or other payment cards 

issued by offshore banks. The IRS used the information and records obtained through those 

efforts to trace the identities of people using the payment cards.132 As of July 31, 2003, the 

OCCP had resulted in approximately 2,800 tax returns being selected for audit, a number of 

which had been referred to the Criminal Investigation Division for possible action.133

Subsequently, in January 2003, the IRS announced the Offshore Voluntary Compliance Initiative 

 129 United States v. Samuels, Kramer & Co., and First Western Government Securities, Inc., 712 

F.2d 1342 (9th Cir. 1983), which affirmed a lower court determination that the issuance of the John Doe 

summons was not subject to review, but reversed and remanded to permit a limited evidentiary hearing on 

whether the Powell standard was met. 

130 Sec. 7609(e)(1). 

131 Sec. 7609(e)(2). 

132 News Release, Internal Revenue Service, IR-2003-95 (July 31, 2003); General Accounting 

Office, Internal Revenue Service: Challenges Remain in Combating Abusive Tax Schemes, GAO-04-50, 

at 10-11 (Nov. 19, 2003) [hereafter GAO, Challenges Remain]. 

133 News Release, Internal Revenue Service, IR-2003-95 (July 31, 2003). 
49 

(“OVCI”) to encourage the voluntary disclosure of previously unreported income placed by 

taxpayers in offshore accounts and accessed through credit card or other financial arrangements 

similar to those targeted by the OCCP. Under this program, the IRS waived the civil fraud 

penalty and certain penalties relating to failure to file information and other returns, including the 

Report of Foreign Bank and Financial Accounts (“FBAR”),134 but taxpayers remained liable for 

back taxes, interest, and certain accuracy-related and delinquency penalties.135 The IRS reported 

that, as of July 31, 2003, it had received OVCI applications from 1,299 taxpayers who paid over 

$75 million in taxes and identified over 400 offshore promoters of abusive credit card or other 

financial arrangements.136 Then IRS Commissioner Mark Everson discussed the limited success 

of the OVCI initiative at a PSI hearing on August 1, 2006. Within his testimony, he stated “In 

reality, we did not have a good idea of the potential universe of individuals covered by this 

initiative. As a result, the incentive for taxpayers to come forward and take advantage of this 

initiative was diminished due to the fact that we did not have the ability to identify immediately 

and begin examinations for all non-participating individuals.”137

 134 News Release, Internal Revenue Service, IR-2003-48 (April 10, 2003). Taxpayers wishing to 

participate in the OVCI program were required to apply before April 15, 2003. The FBAR reporting 

requirements are discussed in Section II of this document. 

135 Rev. Proc. 2003-11, 2003-1 C.B. 311; News Release, Internal Revenue Service, IR-2003-5 

(Jan. 14, 2003); GAO, Challenges Remain, supra, at 12; General Accounting Office, Testimony of 

Michael Brostek Before the Committee on Finance, U.S. Senate: Taxpayer Information: Data Sharing 

and Analysis May Enhance Tax Compliance and Improve Immigration Eligibility Decisions, GAO-04-

972T (Nov. 19, 2003). 

136 News Release, Internal Revenue Service, IR-2003-95 (July 31, 2003). 

137 Written Testimony of Commissioner of Internal Revenue Mark Everson Before Senate 

Committee on Homeland Security and Governmental Affairs' Permanent Subcommittee on Investigations 

Hearing on Offshore Abuses: The Enablers, The Tools and Offshore Secrecy, 109th Cong., August 1, 

2006. 
50 

IV. ADDRESSING CONFLICTING INTERESTS: EXCHANGE 

OF INFORMATION UNDER TAX TREATIES 

Tax treaties establish the scope of information that can be exchanged between treaty 

parties. Exchange of information provisions first appeared in the late 1930s,138 and are included 

in most139 current double tax conventions to which the United States is a party. More recently, 

the United States started executing specific, separate tax information exchange agreements 

(“TIEAs”). Presently, the United States is a party to more than 80 double tax conventions and 

TIEAs that provide for the exchange of information upon request, and is in negotiations for 

several additional agreements. In addition, the United States is a member of the Convention on 

Mutual Administrative Assistance in Tax Matters, which includes provisions on the exchange of 

tax information. 

Model double tax conventions adopted by the United States and the Organization for 

Economic Co-operation and Development (the “OECD”) each include exchange of information 

provisions. While the OECD has adopted a model TIEA, the model presently being used by the 

United States Treasury Department is not publicly available. 

 138 The United States' first double tax convention was entered into in 1932 with France; it did not 

contain an exchange of information provision. Article XV of the U.S.-Sweden Double Tax Convention, 

signed on March 23, 1939, included the United States’ first the exchange of information provision. This 

was followed shortly by a second double tax convention with France, signed on July 25, 1939, which 

provided for the exchange of information in Article 26. 

139 The 1973 income tax treaty between the USSR and the United States does not have an 

exchange of information provision. It still applies to the countries of Armenia, Azerbaijan, Belarus, 

Georgia, Kirgizstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan. 
51 

A. Exchange of Information Under Double Tax Conventions 

1. U.S. Model Agreement 

Article 26 of the 2006 United States Model Income Tax Convention (the “U.S. Model”) 

establishes (in paragraph 1) the obligation of each State to obtain and provide information to the 

other and provides assurances (in paragraph 2) that information exchanged will be treated as 

secret in accordance with the same disclosure restraints as information obtained under the laws 

of the requesting State. 

Paragraph 3 of Article 26 provides that the obligation to exchange information does not 

require either State to: (a) carry out administrative measures that are at variance with the laws or 

administrative practices of either State; (b) supply information not obtainable under the laws or 

administrative practice of either State; or, (c) disclose trade secrets or other information where 

the disclosure of such information would be contrary to public policy. Paragraph 4 of Article 26 

provides that when information is requested by one State, the requested State is obligated to 

obtain the requested information as if the tax in question were the tax of the requested State, even 

if the requested State has no direct tax interest in the case to which the request relates. 

Paragraph 5 provides that a requested State may not decline to provide information 

because that information is held by financial institutions, nominees or persons acting in an 

agency or fiduciary capacity. This provision effectively prevents a requested State from relying 

on paragraph 3 to argue that its domestic bank secrecy laws override the obligation to exchange 

information. 

Paragraph 6 of the 2006 U.S. Model provides the form in which information is to be 

provided in order to ensure that the information exchanged may be introduced in judicial 

proceedings held in the requesting State. 

Paragraph 7 of the 2006 U.S. Model provides for assistance in the collection of taxes to 

the extent necessary to ensure that only those persons entitled to treaty benefits actually enjoy 

such treaty benefits. 

Paragraph 8 of the 2006 U.S. Model provides that the requested State shall allow 

representatives of the requesting State to enter the requested State for purposes of interviewing 

witnesses and examining books and records. However, such access is granted only with the 

consent of the person subject to examination. 

Paragraph 9 of the 2006 U.S. Model provides that the competent authorities of each State 

may further agree to the details for the exchange of information under Article 26. Although not 

expressly stated, this paragraph is interpreted as authorizing the exchange of information on a 

routine basis, upon request with respect to a specific case, or spontaneously. In this context, a 

routine exchange of information covers income subject to withholding tax. A spontaneous 

exchange of information occurs when information discovered during a tax examination indicates 

possible noncompliance with the laws of the other State is delivered to the other State even 

thought there is no previous request. 
52 

2. OECD Model Agreement 

The information exchange provisions in the OECD Model Tax Convention on Income 

and Capital, approved on July 17, 2008 (the “OECD Model”) generally correspond to the first 

five paragraphs of the 2006 U.S. Model.140 At the time the OECD Model was approved, several 

member countries expressly reserved with respect to paragraph 5 of Article 26 (prohibiting a 

requested State from declining to supply information because that information is held by a bank, 

other financial institution, nominee or person acting in an agency or fiduciary capacity, or 

because it relates to ownership interests in a person). These members were Austria, Switzerland, 

Luxembourg and Belgium, all of which have bank secrecy laws. Notably, each of these 

countries has recently announced its intention to adopt OECD standards for the exchange of tax 

information and transparency in order to avoid being placed on a potential new G-20 blacklist of 

uncooperative tax havens.141

3. Recent developments 

Shortly after the adoption the 2006 U.S. Model, the United States executed a double tax 

convention with Belgium in which the exchange of information provision exceeded the scope of 

the 2006 U.S. Model (the “Belgium Treaty”).142 Historically, Belgium’s bank secrecy rules 

prevented Belgian banks from providing information about their clients to tax authorities. 

Earlier negotiations between the United States and Belgium were abandoned because Belgium 

refused to make any concessions with respect to its bank secrecy rules.143 The Belgium Treaty, 

which entered into force on December 28, 2007, included three innovative provisions related to 

the exchange of information which link continuity of certain treaty benefits to changes in 

Belgium’s laws, including banking secrecy laws: 

 The zero rate of withholding applicable to dividends under Article 10, paragraph 

12(a)(i) (Dividends) will be discontinued after five years unless the Secretary certifies 

 140 Paragraph 1 of the OECD Model provides, however, for the exchange of information imposed 

on behalf of each respective State, or “of their political subdivisions or local authorities.” In contrast, the 

U.S. Model is silent with respect to taxes imposed by political subdivisions and local authorities and the 

technical explanation specifically states that the Article 26 applies with respect to “taxes of every kind 

applied at the national level.” The OECD Model does not incorporate paragraphs 6 through 9 (described 

above) of the U.S. Model. 

141 Randall Jackson, Kristen A. Parillo and David D. Stewart, Tax Havens Agree to OECD 

Standards, 53 Tax Notes Int’l 1027 (2009) [hereinafter, Tax Havens Agree]. 

142 The U.S. Model was adopted on November 15, 2006. The Convention Between the 

Government of the United States of America and the Government of the Kingdom of Belgium for the 

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income 

was signed on November 26, 2006. 

143 Marc Quaghebeur, Belgium Uses Tax Treaties to Attract Investment, 45 Tax Notes Int’l 1055, 

1055 (March 19, 2007). 
53 

to the U.S. Senate that Belgium has satisfactorily met its obligations under Article 25 

(Exchange of Information and Administrative Assistance); 

 The zero rate of withholding applicable to dividends under Article 10, paragraph 

12(a)(ii) (Dividends) may be discontinued if the United States gives written notice by 

June 30 of any year. However, such notice may not be given unless the United States 

has determined that Belgium’s actions with respect to Articles 24 (Mutual Agreement 

Procedure) and 25 (Exchange of Information and Administrative Assistance) have 

materially altered the balance of benefits of the double tax treaty; and, 

 The inclusion of paragraphs 5 through 8 (which, with the exception of the first 

sentence in paragraph 5, are not part of the 2006 US Model)144 establish Belgium’s 

obligations to change its tax legislation, as implied by the zero withholding rate 

provisions of Article 10, paragraph 12 (Dividends).145 

However, paragraph 7 of the Protocol to the Belgium Treaty specifically provides that (a) 

banking records will only be exchanged upon request and (b) the requested State may decline to 

provide information that it does not already possess unless the request identifies both a specific 

taxpayer and a specific bank or financial institution. This effectively precludes the United States 

from learning the identity of U.S. taxpayers with Belgian interests under the Belgium Treaty. 

Instead, the United States would be required to rely on its domestic authority to issue a John Doe 

summons (discussed above in Part III). 

 144 The provisions of paragraph 6 appear to correspond to commentary included in the technical 

explanation of the 2006 U.S. Model regarding the statute of limitations. 

145 Marc Quaghebeur, Belgian Parliament Ratifies Belgium-US Tax Treaty, 46 Tax Notes Int’l 

768, 776 (May 21, 2007). 
54 

B. TIEAs 

TIEAs are bilateral agreements governing the mutual exchange of information. Typically 

these agreements are executed with countries with which the United States does not have a 

double tax convention. The agreement with Liechtenstein, signed on December 8, 2008, is the 

United States’ most recent TIEA. 

Enactment of the Caribbean Basin Economic Recovery Act146 (the “Act”) in 1983 

provided the initial catalyst for so-called tax haven countries to conclude TIEAs with the United 

States. Commonly referred to as the Caribbean Basin Initiative (“CBI”), Title II of the Act 

authorized unilateral preferential trade and tax benefits for eligible Caribbean countries,147

including duty-free treatment of eligible products, if the country entered into a TIEA with the 

United States.148 Subsequently, in 1984149 and 1986,150 additional incentives were enacted; the 

1984 provisions were designed to encourage non-CBI countries to execute TIEAs with the 

United States. TIEAs are entered into by Treasury, without the advice and consent of the Senate, 

upon the determination by the President that the agreement as negotiated is in the national 

security interest of the United States.151 

 146 P.L. No. 98-67. 

147 See sec. 212(a)(1)(A) of the Act for the list of eligible countries. The list is updated by Rev. 

Rul. 2007-28, 2007-1 C.B. 1039. 

148 Alternatively, eligible CBI countries could qualify based on a double tax convention with the 

United States that contained an effective exchange of information program. Section 927(e)(3)(B). 

149 Pursuant to the Deficit Reduction Act, P. L. No. 98-369, a foreign sales corporation 

established under section 927 could be organized in any foreign country (not just CBI eligible countries) 

provided that the country had concluded either a TIEA or a double tax convention with the United States 

meeting the requirements of section 274(h)(6)(A). Section 927(e)(3) (repealed for transactions after 

9/30/2000 by P.L. 105-519); Treas. Reg. secs. 1.921-2(d) (A-7, part (i)) and 1.922-1(e) (A-5, part (ii)). 

150 The Tax Reform Act of 1986, P.L. 99-514, added another incentive for eligible CBI countries 

by treating certain income derived from investments in that country as qualified possessions source 

investment income for purposes of the section 936 credit (allowing possession corporations a tax credit 

for U.S. taxes imposed on income earned by such corporations), provided that the eligible CBI country 

had concluded either a TIEA or a double tax convention with the United States meeting the requirements 

of section 274(h)(6)(A). Section 936(d)(4), flush language (repealed in 1996 by the Small Business Job 

Protection Act, P.L. 104-188, which provided for the 10-year phase out of the credit in section 936(j)). 

151 Section 274(h)(3)(C); See also, Barquero vs. United States, 18 F.3d 1311, 1314-1315 (5th Cir. 

1994); and Treaties and Other International Agreements: the Role of the United States Senate, A Study 

Prepared for the Committee on Foreign Relations, United States Senate, Congressional Research Service, 

Library of Congress (January, 2001), S. Prt. 106-71. 
55 

1. U.S. TIEA Program 

Initiated in 1984, the goals of the U.S. tax information exchange program are (a) assuring 

the accurate assessment and collection of taxes, (b) preventing fiscal fraud and tax evasion, and 

(c) developing improved information sources for tax matters in general. With respect to the 

United States, taxes covered are limited to national taxes, such that state and local taxes are not 

covered. The objectives of the TIEA include the prosecution of tax crimes, as well as the pursuit 

of civil tax claims. A State must have adequate process for obtaining information; if the State is 

required to enact measures providing such process, then the entry into force of the TIEA may be 

delayed until such requirements have been met. The requirements of the TIEA override 

individual State’s laws and practices pertaining to disclosure of information regarding taxes, 

although this provision may be eliminated from a TIEA if the internal laws of the other State do 

not allow for bank secrecy or undisclosed (bearer) ownership of securities or shares. 

2. OECD Model TIEA 

In 2002, the OECD released its Agreement on Exchange of Information on Tax Matters 

(the “OECD Model TIEA”), together with commentary (the “Commentary”). The OECD Model 

TIEA was developed by the OECD Global Forum Working Group on Effective Exchange of 

Information, which consisted of representatives from OECD Member countries as well as 

delegates from Aruba, Bermuda, Bahrain, Cayman Islands, Cyprus, Isle of Man, Malta, 

Mauritius, the Netherlands Antilles, the Seychelles and San Marino.152 It is represents the 

standard of the effective exchange of information for purposes of the OECD’s initiative on 

harmful tax practices,153 while at the same time does not seek to prescribe the precise format for 

achieving this standard.154

Article 5 (Exchange of Information Upon Request) of the OECD Model TIEA sets forth 

the requirements for exchanging information upon request; notably, there are no provisions for 

automatic and spontaneous exchanges of information. In addition, it provides that information 

requested with respect to a criminal matter must be exchange without regard to whether the 

conduct under investigation would constitute a crime under the laws of the requested State.155 

Paragraph 4 of Article 5 is intended to prohibit banks, other financial institutions and any person 

acting in an agency or fiduciary capacity, including nominees and trustees from claiming the 

right of privilege as the basis for declining an information request - unless the provisions of 

Article 7 (Possibility of Declining a Request) apply. This paragraph also effectively prevents 

any claim that bank secrecy should be considered protected as a matter of public policy (ordre 

 152 OECD Model TIEA, Introduction, paragraph 2. 

153 OECD Model TIEA, Introduction, paragraph 3. 

154 OECD Model TIEA, Introduction, paragraph 6. 

155 Commentary to OECD Model TIEA, Article 5, paragraph 1, at (¶39-40). 
56 

public) for purposes of Article 7156 − which as noted in the Commentary, should only be invoked 

in extreme cases, such as an information request motivated by political or racial persecution.157 

3. Recent developments 

The most recent TIEA completed by the United States is with Liechtenstein (the 

“Liechtenstein TIEA”). Signed on December 8, 2008, the Liechtenstein TIEA requires each 

State to provide information that is foreseeably relevant to either a civil or criminal tax matter.158 

Although Liechtenstein has publicly stated that it still retains the right for a Liechtenstein court 

to decide the legitimacy of the request from the United States,159 there are no unique terms in the 

Liechtenstein TIEA that provide for any extraordinary review beyond the “foreseeably relevant” 

standard. 

The Liechtenstein TIEA requires that any changes or additions to domestic laws as may 

be necessary to give effect to the agreement must be enacted by December 31, 2009.160 

Accordingly, the Liechtenstein TIEA is not effective until each State has notified the other that it 

has completed the necessary internal procedures (including enacted of legislation) required for 

entry into force.161 Although there is no publicly-available list of the changes that must be made 

to the Liechtenstein laws for this purpose, some commentators have noted that bank secrecy laws 

must be changed in order to give effect to the Liechtenstein TIEA. This conclusion may be 

consistent with public statements by Treasury, which has said that the Liechtenstein TIEA is 

significant because it “pierces bank secrecy.”162 

In concluding the Liechtenstein TIEA, the United States took the additional step of 

agreeing to a one-year extension of Liechtenstein’s eligibility as a QI jurisdiction, until 

December 31, 2009.163 The IRS will not enter into a QI agreement if it has not received a 

specified list of items regarding the know-your-customer practices and procedures in the 

 156 Commentary to OECD Model TIEA, Article 5, paragraph 4, at (¶46). 

157 Commentary to OECD Model TIEA, Article 7, paragraph 4, at (¶91). 

158 Agreement Between the Government of the United States of America and the Government of 

the Principality of Liechtenstein on Tax Cooperation and the Exchange of Information Relating to Taxes, 

Article 1 [hereinafter, Lichtenstein TIEA]. 

159 Press Release, December 8, 2009, 

http://www.presseportal.ch/de/pm/100000148/100574800/presse_informationsamt_liechtenstein?pre=1 

160 Lichtenstein TIEA, Article 13. 

161 Lichtenstein TIEA, Article 15. 

162 Charles Gnaedinger, Liechtenstein, U.S. Sign Tax Information Exchange Agreement, Tax 

Notes Today, December 9, 2008, citing Jesse Eggert, an attorney-adviser at the Treasury Department. 

163 Protocol to the Liechtenstein TIEA, set forth in the Appendix, paragraph 10. 
57 

jurisdiction in which the applicant is seeking QI status.164 In this regard, the IRS publishes a list 

of those countries with approved know-your-customer rules; as of the last update on December 

8, 2008, Liechtenstein was included on this list.165 However, ongoing inclusion in this list is not 

guaranteed, and the IRS has publicly stated that QIs “should not assume that, because they have 

an agreement covering a business in a particular jurisdiction, such jurisdiction will not later be 

identified as a specified tax haven or secrecy jurisdiction.”166 For this purpose, a “specified tax 

haven or secrecy jurisdiction” is a jurisdiction that shows an unwillingness to cooperate with the 

United States to reform their practices related to transparency and the provision of tax 

information.167 Thus, this temporary QI extension raises the question whether Liechtenstein may 

have been at risk of being identified as a specified tax haven or secrecy jurisdiction and delisted 

as an approved QI jurisdiction. Similarly, it raises the question whether a direct correlation 

should be inferred from the fact that the temporary extension ends on the same date by which 

Liechtenstein is required to make the necessary changes to its in domestic law by December 31, 

2009 in accordance with Article 13 (Implementing Legislation). 

On March 12, 2009, Liechtenstein announced that it intends comply with the OECD 

standards on transparency and exchange of information,168and to negotiate new bilateral 

agreements “that may go beyond OECD standards so as to provide particularly for effective 

exchange of information to address the global issue of tax fraud and tax evasion as well as 

double taxation.”169 The announcement further states that Liechtenstein is prepared “to develop 

comprehensive solutions to protect the legitimate tax claims of other jurisdictions according to 

their fiscal sovereignty and to balance legitimate interests of jurisdictions” albeit while 

maintaining “solid and modern bank secrecy laws.”170 

 164 Rev. Proc. 2000-12, 2000-1 C.B. 387, at Section 3.02. 

165 See http://www.irs.gov/businesses/international/article/0,,id=96618,00.html. 

166 I RS Announcement 2000-48, 2000-1 C.B. 1243. 

167 Id. 

168 See infra Section IV.E.1. 

169 The Liechtenstein Declaration, March 12, 2009, 

http://www.oecd.org/dataoecd/27/21/42340216.pdf.

170 Id. 
58 

C. Convention on Mutual Administrative Assistance in Tax Matters 

In addition to double tax conventions and TIEAs, the Convention on Mutual 

Administrative Assistance in Tax Matters provides the United States with mechanisms to ensure 

the exchange of tax information. This multilateral treaty entered into force in 1995 and the 

following States are also members: Azerbaijan, Belgium, Denmark, Finland, France, Iceland, 

Italy, Netherlands, Norway, Poland, Sweden, and the United Kingdom.171 Germany has signed, 

but not ratified, this agreement. Ukraine has signed and ratified this agreement. 

 171 The United States reserved as to several articles in that treaty, including the provisions that 

would require collection assistance. 
59 

D. Administration of U.S. Treaty Network 

In order to administer its obligations under the network of bilateral treaties, the United 

States has delegated the role of Competent Authority for the treaties to the IRS. The Competent 

Authority is responsible for resolving disputes with the other contracting state about the scope or 

interpretation of the treaty. With respect to exchange of information articles, the Competent 

Authority determines whether the agency should present a request for information to a treaty 

partner as well as how to respond to any requests that it receives from the treaty partner. All 

information exchanged flows through the offices of the Competent Authorities,172 and is 

safeguarded by the domestic laws of each state as well as the secrecy clause in the exchange of 

information article. In the United States, the taxpayer specific information received from a treaty 

partner is within the scope of ‘return information’ for purposes of protecting it from disclosure. 

Nonspecific information received from a partner is also protected from publication if its 

disclosure would harm tax administration, as determined by the Competent Authority in 

consultation with his counterpart.173 Since the entry into force of the first treaty to include an 

exchange of information article, the United States has exchanged information with its partners in 

a variety of ways.174 The principal types of information exchanges are generally referred to as 

routine, spontaneous or specific exchanges. In addition, there are industry-wide exchanges with 

certain treaty partners, and simultaneous examinations or criminal investigations with other 

partners. 

1. Routine exchange of information 

A “routine exchange of information” is one in which the contracting states have agreed 

that a category of information will be shared with one another on an ongoing basis, without the 

need for a specific request for same, because it is of a type that is consistently relevant to the tax 

administration of the receiving jurisdiction. Information that is automatically shared under this 

authority may include information that is not taxpayer specific, such as news about changes in 

domestic tax legislation, or it may be comprise voluminous taxpayer filings, such as magnetic 

disks containing the information from Forms 1042-S, relating to U.S. source fixed or 

determinable income paid to persons claiming to be residents of the receiving treaty country. 

The type of information, when it will be provided and how frequently, are typically determined 

by the respective Competent Authorities after consultation. The information will then be 

 172 In the United States, the requests are initially received by Tax Attaches, or, in the case of 

France or Canada, the Exchange of Information Team program analysts in Washington. I.R.M. par. 

4.60.1.1(6)(b). 

173 Sec. 6105. 

174 In calendar year 2007, the United States made 1,429,499 disclosures of information to foreign 

countries under the exchange of information program. See Joint Committee on Taxation, Disclosure 

Report for Public Inspection Pursuant to Internal Revenue Code Section 6103(p)(3)(C) for Calendar Year 

2007(JCX-47-08), June 3, 2008, at 3. 
60 

automatically provided. OECD has developed standards for the electronic format of such 

exchanges, to enhance their utility to tax administration.175 

The international steps taken to standardize the information exchanged and improve its 

usefulness are a positive development, but there remain numerous shortcomings, both practical 

and legal, in the routine exchange of information. Chief among them is the failure to include 

taxpayer identification numbers (“TINs”), despite the strong recommendation of the OECD that 

member states provide such information.176 Ideally, the information received by the IRS should 

either include a TIN or be subject to a process referred to as “TIN perfection” to enable the IRS 

to correlate account data in the information received with a valid TIN in its taxpayer 

databases.177 Such an undertaking is time-consuming and costly. Other practical hurdles that 

limit its value are the lack of timeliness of its production, the fact that the data may not readily 

conform to U.S. taxable periods, the need to translate the language of the documents and the 

currencies, and its voluminous nature.178 

These practical limitations are further exacerbated by the legal barriers to using the 

information to pursue FBAR penalties. The treaty information may only be used for a purpose 

consistent with the treaty. The FBAR penalties arise under Title 31 of the United States Code 

and are not generally within the scope of the taxes covered by the tax treaties. As a result, the 

treaty secrecy clause prevents sharing the information with those who investigate FBAR 

penalties. If foreign account information received under the treaty can be associated with a 

specific taxpayer's income tax accounts, it becomes tax return information, subject to the 

provisions of section 6103. Under section 6103, the information may be disclosed for "tax 

administration" purposes, as determined on a case-by-case basis. Even if the penalties are 

covered by the treaty, domestic legislation could prevent use of the information. Despite the 

likelihood that the information would readily establish the applicability of the penalties, it cannot 

be used for that purpose. In the face of competing priorities, it is not surprising that the IRS has 

made little use of the information. An adequate cost/benefit study of various means of 

strategically using the information is needed. 

 175 See Module 3 of “Manual On The Implementation of Exchange of Information Provisions for 

Tax Purposes”, OECD Committee on Fiscal Affairs (23 January 2006). 

176 OECD Recommendation on the use of Tax Identification Numbers in an International Context

[C(97)29/FINAL], recommends at Article 4: "The information referred to in Article 2 of this 

Memorandum shall, as much as possible, be provided in a magnetic or electronic format following the 

Recommendation of the Council on the Use of the Revised OECD Standard Magnetic Format for 

Automatic Exchange of Information [C(97)30/FINAL] or any further updated format recommended by 

the Council. This information shall include, as much as possible, the Tax Identification Numbers in the 

residence and source country of the non-resident recipients of income[.]"

177 Letter from Commissioner, IRS to Chairman, Senate Finance Committee (June 12, 2006), 

2006 TNT 115-17. 

178 Id. 
61 

2. Spontaneous exchange of information 

A “spontaneous exchange of information” occurs when one contracting state is in 

possession of an item of information that it determines may be of interest to the other contracting 

state for the tax administration of that other state. In such an instance, the first state will 

spontaneously provide the information to the treaty partner. In the United States, such 

information would typically be identified by a revenue agent or other employee, who would 

forward the information to the U.S. Competent Authority offices to decide whether the 

information should be forwarded to the foreign jurisdiction. Information spontaneously provided 

by a treaty partner to the United States is generally reviewed by the Exchange of Information 

program analyst or Tax Attache who first receives it, who then forwards it to an appropriate field 

office for further action and follows up to determine the outcome of the exchange. 

3. Specific exchange of information 

A “specific exchange” is a formal request by one contracting state for information that is 

relevant to an ongoing investigation of a particular tax matter. These cases are generally 

taxpayer specific. Those familiar with the case prepare a request that explains the background of 

the tax case and the need for the information. That request is forwarded to the Competent 

Authority, who determines whether to issue the request. If he determines that it is an appropriate 

use of the treaty authority, he forwards it to his counterpart. When a contracting state receives a 

specific request for information, it is obligated to use its powers to obtain the information to the 

same extent that it would do so if it were a domestic case, even if the information obtained could 

not be used in a domestic case. 

4. Other exchanges of information 

In addition to the traditional exchanges of information described above, the treaty 

partners may also work together to gain expertise about specific industries and to facilitate 

sharing of information when there is a common interest in the information. In those instances, 

they may arrange a meeting of agents or officials familiar with a particular industry or economic 

sector to share experiences, know-how, investigative techniques, and observations about trends 

in that industry. These discussions do not generally address the cases of specific taxpayers. The 

United States has also joined in the multilateral effort to form the Joint International Tax Shelter 

Information Centre, in 2004. It now operates with offices in Washington, D.C., and London, 

England. In addition to the United States, the members are Australia, Japan, the United 

Kingdom and Canada. Each has a bilateral treaty with each other member. If there is sufficient 

commonality in an issue or a specific taxpayer, there are procedures to conduct a simultaneous 

examination which will involve significant cooperation between the participating tax 

administrations. Both the industry wide meetings and the simultaneous examinations occur 

under the auspices of the exchange of information program; they are not in lieu of formal 

exchanges. They establish a process by which extensive exchanges of information can occur, 

with the assistance of an Exchange of Information analyst or Tax Attache. 

In addition to exchanging information with its treaty partners, assistance is provided 

under the mutual assistance article in the tax treaties. The United States has specifically agreed 

to provide mutual assistance in collection of the taxes of five treaty partners: France, Canada, 
62 

Sweden, Denmark, and the Netherlands. The United States does so under its “Mutual Assistance 

Collection Program” (MCAP).179 It also provides assistance via the Mutual Legal Assistance in 

Criminal Matters Treaties (MLATs). Unlike the tax treaties, the role of Competent Authority for 

MLATs is delegated to the Department of Justice.180 

5. Litigation in support of exchange of information program 

In addition to the resources devoted to administer its Exchange of Information program, 

the United States has litigated extensively in support of the program against a variety of 

challenges to actions it took to honor its treaty obligations. These challenges have included suits 

seeking to obtain publication of information received under treaty exchanges, objections to 

enforcement of adminstrative summonses and finally, an attempt to claim that the disclosure to 

another tax administrator was negligent. 

The IRS successfully defended its efforts to protect the secrecy of certain information in 

internal memoranda, including the identity of the treaty partner that had communicated with the 

IRS.181 The need to safeguard the secrecy of the information in order to protect the working 

relationship of the treaty partners was sufficient reason to sustain the government position that 

documents from meetings of Competent Authorities are entitled to treaty protection.182 

In efforts to obtain the domestic information responsive to a treaty partner’s request for 

information, the IRS uses its authority to issue administrative summonses. Specific challenges 

to IRS efforts to obtain financial information requested by a treaty partner frequently centered on 

whether the United States v. Powell ‘good faith’ elements were satisfied, in particular the need 

to comply with all procedural constraints. The extent to which the United States was required to 

look behind the statement of its treaty partner that the information was needed in a tax matter in 

the foreign jurisdiction was hotly contested, with taxpayers arguing that the foreign authorities 

should be required to meet the standards that would apply if the investigation were conducted in 

the United States. As previously stated, in a domestic case, if a matter had already been referred 

to the Department of Justice for criminal prosecution, a third-party record keeper summons 

would not be enforced.183 In United States v. Stuart,

184 the question presented involved a request 

from Canada for information relevant to an investigation in that jurisdiction. The target of the 

investigation argued that the Internal Revenue Service lacked good faith, because it did not 

 179 See, I.R.M. Pars. 11.3.25.5 and 11.3.25.6 

180 See, I.R.M. Pars. 11.3.28.3.2. 

181 Tax Analysts v. IRS, 152 F. Supp. 2d 1, 9 (D.D.C. 2001), rev’d in part on other grounds, 1 

2002 WL 1300028 (D.C. Cir. 2002)). Congress enacted section 6105, which explicitly provides that 

information obtained under a treaty and not taxpayer-specific is nevertheless protected information. 

182 Tax Analysts v. Internal Revenue Service, 217 F. Supp. 2d 23 (D. D.C. 2002) 

183 Sec. 7602(c); United States v. LaSalle National Bank, 437 U.S. 298 (1978). 

184 489 U.S. 353; 109 S. Ct. 1183; 103 L. Ed. 2d 388 (1989) 
63 

attempt to ascertain whether the Canadian tax investigation that led to Canada’s treaty request 

had reached a stage analogous to an IRS referral to the Justice Department for criminal 

prosecution before issuing an administrative summons. The Court held that the summons was 

enforceable without such inquiry, stating, “We hold that neither the 1942 Convention nor 

domestic legislation imposes this precondition to issuance of an administrative summons. So 

long as the summons meets statutory requirements and is issued in good faith, as we defined that 

term in United States v. Powell, 379 U.S. 48, 57-58 (1964), compliance is required, whether or 

not the Canadian tax investigation is directed toward criminal prosecution under Canadian law.” 

Since that opinion, numerous treaty summonses have been enforced, with little controversy. 

In a suit for damages based on allegedly negligent or false disclosures made by the IRS to 

the Japanese National Tax Administration (“NTA”), the trial court granted summary judgment 

for the United States, rejecting a taxpayer claim that the NTA was an unreliable protector of 

treaty information and that disclosure to that treaty partner constituted negligence.185 The United 

States disclosed information pursuant to its treaty with Japan in the course of a simultaneous 

examination. Following the disclosures to the NTA, Japanese media reported that a joint 

examination of plaintiffs had been conducted by the IRS and the NTA. That fact was true, but 

the articles also contained information that was untrue. Although plaintiffs cited to numerous 

rumors of leaks by the NTA of information from Japanese domestic audits, and NTA’s failure to 

maintain the confidentiality of taxpayer information, they provided no other examples of an 

alleged NTA leaks of US/Japan tax treaty information. Plaintiff provided expert testimony that 

tax information was often reported in the press in Japan, in support of its claim that the United 

States should have known that information provided to NTA would not be safe from further 

disclosure. The court concluded that the witnesses did not establish that the information made 

available to the press came from NTA, nor did they prove that the source of the reports was 

treaty information. In granting summary judgment for the United States, the court stated: 

Free and open disclosure best serves the purposes of tax treaties - - ensuring that 

taxpayers correctly report and pay their domestic and foreign taxes. To require the 

United States to guarantee the accuracy of all information conveyed to treaty 

partners, especially in the preliminary stages, would have a chilling effect on 

furthering the purposes of the treaty. The IRS would not propose simultaneous 

examinations for fear of lawsuits for any misinformation contained in the 

proposal. ... The Court holds that negligently providing incorrect information in 

the course of a simultaneous examination does not rise to the level of actionable 

conduct. 

According to the opinion, the IRS temporarily suspended the exchange of information with Japan 

under the treaty on the basis of the complaints by plaintiffs as well as earlier allegations that 

information had been improperly disclosed in Japan, according to an internal email placed in the 

record and as explained by an IRS official at his deposition. 

 185 Aloe Vera of America, Inc. v. United States, 2007-1 U.S. Tax Cases Par 50,325; 99 AFTR 2d 

895 (USDC D. AZ 2/2/2007). 
64 

E. Attempts to Develop an International Consensus 

In the current global financial crisis, greater attention to all means of restoring integrity 

and stability to financial institutions has led to greater scrutiny of efforts to reconcile the 

conflicts between jurisdictions with strict bank secrecy and those seeking information from those 

jurisdictions in order to enforce their own laws. At the upcoming conference of the leaders of 

the G-20 nations, the regulation of offshore financial centers and how to achieve international 

consensus on such regulation is expected to be on the agenda. In “The Turner Review: A 

Regulatory Response to the Global Banking Crisis”, the Financial Services Authority of the 

United Kingdom identifies the need for global regulation of offshore financial centers as one of 

the action items necessary to establish a stable and effective banking system. Otherwise, 

improved harmonization of the regulation of major financial institutions within the jurisdictions 

of the G-20 nations could increase incentives for use of offshore centers. 186 The extent to which 

multilateral and bilateral agreements can effect the changes necessary to pierce bank secrecy 

merits careful consideration. 

1. OECD Initiatives 

OECD’s work on its standards of transparency and exchange of information (the “OECD 

Standards”) was initiated in 1996 by its Global Forum on Transparency and Exchange of 

Information (“the “Global Forum”). 

The OECD Standards require: 

 Exchange of information where it is “foreseeably relevant” to the administration and 

enforcement of the domestic laws of a requesting State; 

 No restrictions on exchange caused by bank secrecy or domestic tax interest 

requirements; 

 Availability of reliable information and powers to obtain it; 

 Respect for taxpayer rights; and 

 Strict confidentiality of information exchanged.187 

The OECD Standards were adopted by the G20 Ministers of Finance in 2004, and by the 

UN Committee on Experts on International Cooperation in Tax Matters in 2008. 

Also initiated in 1996 was the OECD’s Harmful Tax Practices Project, which is carried 

out through the Forum on Harmful Tax Practices (“FHTP”). FHTP focuses on: (a) eliminating 

 186 The Turner Review: A Regulatory Response to the Global Banking Crisis, Financial Services 

Authority, United Kingdom, March 2009, at 7 and 74. 

187 Overview of the OECD’s Work on International Tax Evasion (A note by the OECD 

Secretariat) 3, (Mar. 23, 2009) [hereinafter 2009 OECD Overview]. 
65 

harmful tax practices of preferential tax regimes of OECD Member states; (b) identifying tax 

havens and pursuing their commitments to OECD Standards; and, (c) encouraging other nonOECD counties to associate themselves with FHTP work.188 As of 2000, FHTP had identified 

more than 40 tax havens. By 2005, 35 were “committed jurisdictions,” i.e., jurisdictions that 

formally documented their commitment to the OECD Standards. While seven tax havens 

initially refused to become committed jurisdictions, the current list of uncooperative tax havens 

is now comprised of just three: Andorra, Monaco, and Liechtenstein. However, each of these 

countries has recently announced its intention to implement the OECD standards. It is expected 

that the list of uncooperative tax havens will be discussed at the upcoming G-20 meeting 

scheduled for April 2. 

Some of the jurisdictions that have recently announced their intention to commit to the 

OECD Standards have bank secrecy rules. It appears from the press releases issued that none 

will abandon these rules. These jurisdictions include Austria, Belgium, Liechtenstein, 

Luxembourg and Switzerland. Rather, each has identified the parameters for lifting banking 

secrecy rules for purposes of exchanging information. For example, Switzerland will permit the 

exchange of information upon receipt of a specific, justified request; Austria will exchange 

information upon request if there is a criminal proceeding involving a tax matter. In contrast, 

Andorra’s government has announced that it will repeal its bank secrecy laws by the end of 

2009. 

It is presently unknown if such measures will satisfy the G-20 at its April meeting and 

keep such jurisdictions off the list of uncooperative tax havens. It is also unknown what 

penalties may be imposed on such jurisdictions. 

1. European Union Savings Directive 

In its foundational documents, the European Union established access to information and 

transparency as an important principle.189 Since then, it has attempted to address the perceived 

tax evasion facilitated by bank secrecy laws of its member states and others. In June 2003, the 

European Council issued a directive designed to ensure that all interest earned by a citizen of a 

member state from an account held in any other member state would be subject to a minimal 

direct tax (“Savings Directive”). A directive is a non-self-executing resolution of the European 

Council that member states must implement, whether by local legislation or regulatory action.190 

The Savings Directive ensures that interest income earned by a citizen of one jurisdiction from 

an institution in another jurisdiction is subject to tax by the appropriate member state by 

requiring both information reporting by the financial institution to the member state and 

automatic exchange of such information reports among the member states. Member states were 

required to implement the directive by July 1, 2005. 

 188 2009 OECD Overview at 3-4. 

189 “Declaration on the right of access to information”, Treaty on European Union, entered into 

force November 1, 1993, O.J. C. 191, 29 July 1992 [hereinafter Maastricht Treaty]. 

190 Maastricht Treaty, Art. 249 
66 

A special longer transition period was provided for the several member countries whose 

jurisdictions were the least transparent among the member states. Belgium, Luxembourg and 

Austria do not permit exchange of information without a specific request for information on a 

specific taxpayer. Instead of agreeing to automatic exchange of information, they agreed to act 

as a withholding agent with respect to accounts in their jurisdictions. They collect tax and pay 

over tax to the home jurisdiction of the account holder without identifying the account holders. 

They are nevertheless entitled to receive the automatic exchange of information about their own 

citizens from the other states. 191 

 

 191 Council Directive 2003/48/EC of 3 June 2003, OJ L 157 (26-6-2003). 
67 

APPENDIX 
Give form to the

requester. Do not

send to the IRS.

Form W-9 Request for Taxpayer

Identification Number and Certification (Rev. October 2007)

Department of the Treasury

Internal Revenue Service

Name (as shown on your income tax return)

List account number(s) here (optional)

Address (number, street, and apt. or suite no.)

City, state, and ZIP code

Print or type

See Specific Instructions on page 2.

Taxpayer Identification Number (TIN)

Enter your TIN in the appropriate box. The TIN provided must match the name given on Line 1 to avoid

backup withholding. For individuals, this is your social security number (SSN). However, for a resident

alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other entities, it is

your employer identification number (EIN). If you do not have a number, see How to get a TIN on page 3.

Social security number

or

Requester’s name and address (optional)

Note. Employer identification number If the account is in more than one name, see the chart on page 4 for guidelines on whose

number to enter.

Certification

1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and

I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal

Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has

notified me that I am no longer subject to backup withholding, and

2.

Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup

withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply.

For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement

arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the Certification, but you must

provide your correct TIN. See the instructions on page 4.

Sign

Here Signature of

U.S. person © Date ©

General Instructions

Form W-9 (Rev. 10-2007)

Part I

Part II

Business name, if different from above

Cat. No. 10231X

Check appropriate box:

Under penalties of perjury, I certify that:

Use Form W-9 only if you are a U.S. person (including a

resident alien), to provide your correct TIN to the person

requesting it (the requester) and, when applicable, to:

1. Certify that the TIN you are giving is correct (or you are

waiting for a number to be issued),

2. Certify that you are not subject to backup withholding, or

3. Claim exemption from backup withholding if you are a U.S.

exempt payee. If applicable, you are also certifying that as a

U.S. person, your allocable share of any partnership income from

a U.S. trade or business is not subject to the withholding tax on

foreign partners’ share of effectively connected income.

3. I am a U.S. citizen or other U.S. person (defined below).

A person who is required to file an information return with the

IRS must obtain your correct taxpayer identification number (TIN)

to report, for example, income paid to you, real estate

transactions, mortgage interest you paid, acquisition or

abandonment of secured property, cancellation of debt, or

contributions you made to an IRA.

Individual/Sole proprietor Corporation Partnership

Other (see instructions) ©

Note. If a requester gives you a form other than Form W-9 to

request your TIN, you must use the requester’s form if it is

substantially similar to this Form W-9.

● An individual who is a U.S. citizen or U.S. resident alien,

● A partnership, corporation, company, or association created or

organized in the United States or under the laws of the United

States,

● An estate (other than a foreign estate), or

Definition of a U.S. person. For federal tax purposes, you are

considered a U.S. person if you are:

Special rules for partnerships. Partnerships that conduct a

trade or business in the United States are generally required to

pay a withholding tax on any foreign partners’ share of income

from such business. Further, in certain cases where a Form W-9

has not been received, a partnership is required to presume that

a partner is a foreign person, and pay the withholding tax.

Therefore, if you are a U.S. person that is a partner in a

partnership conducting a trade or business in the United States,

provide Form W-9 to the partnership to establish your U.S.

status and avoid withholding on your share of partnership

income.

The person who gives Form W-9 to the partnership for

purposes of establishing its U.S. status and avoiding withholding

on its allocable share of net income from the partnership

conducting a trade or business in the United States is in the

following cases:

● The U.S. owner of a disregarded entity and not the entity,

Section references are to the Internal Revenue Code unless

otherwise noted.

● A domestic trust (as defined in Regulations section

301.7701-7).

Limited liability company. Enter the tax classification (D=disregarded entity, C=corporation, P=partnership) © Exempt 

payee

Purpose of Form
Form W-9 (Rev. 10-2007) Page 2

Sole proprietor. Enter your individual name as shown on your

income tax return on the “Name” line. You may enter your

business, trade, or “doing business as (DBA)” name on the

“Business name” line.

Other entities. Enter your business name as shown on required

federal tax documents on the “Name” line. This name should

match the name shown on the charter or other legal document

creating the entity. You may enter any business, trade, or DBA

name on the “Business name” line.

If the account is in joint names, list first, and then circle, the

name of the person or entity whose number you entered in Part I

of the form.

Specific Instructions

Name

Exempt Payee 

5. You do not certify to the requester that you are not subject

to backup withholding under 4 above (for reportable interest and

dividend accounts opened after 1983 only).

Certain payees and payments are exempt from backup

withholding. See the instructions below and the separate

Instructions for the Requester of Form W-9.

Civil penalty for false information with respect to

withholding. If you make a false statement with no reasonable

basis that results in no backup withholding, you are subject to a

$500 penalty.

Criminal penalty for falsifying information. Willfully falsifying

certifications or affirmations may subject you to criminal

penalties including fines and/or imprisonment.

Penalties

Failure to furnish TIN. If you fail to furnish your correct TIN to a

requester, you are subject to a penalty of $50 for each such

failure unless your failure is due to reasonable cause and not to

willful neglect.

Misuse of TINs. If the requester discloses or uses TINs in

violation of federal law, the requester may be subject to civil and

criminal penalties.

If you are an individual, you must generally enter the name

shown on your income tax return. However, if you have changed

your last name, for instance, due to marriage without informing

the Social Security Administration of the name change, enter

your first name, the last name shown on your social security

card, and your new last name.

If you are exempt from backup withholding, enter your name as

described above and check the appropriate box for your status,

then check the “Exempt payee” box in the line following the

business name, sign and date the form.

4. The IRS tells you that you are subject to backup

withholding because you did not report all your interest and

dividends on your tax return (for reportable interest and

dividends only), or

3. The IRS tells the requester that you furnished an incorrect

TIN,

2. You do not certify your TIN when required (see the Part II

instructions on page 3 for details),

You will not be subject to backup withholding on payments

you receive if you give the requester your correct TIN, make the

proper certifications, and report all your taxable interest and

dividends on your tax return.

1. You do not furnish your TIN to the requester,

What is backup withholding? Persons making certain payments

to you must under certain conditions withhold and pay to the

IRS 28% of such payments. This is called “backup withholding.” 

Payments that may be subject to backup withholding include

interest, tax-exempt interest, dividends, broker and barter

exchange transactions, rents, royalties, nonemployee pay, and

certain payments from fishing boat operators. Real estate

transactions are not subject to backup withholding.

Payments you receive will be subject to backup

withholding if:

If you are a nonresident alien or a foreign entity not subject to

backup withholding, give the requester the appropriate

completed Form W-8.

Example. Article 20 of the U.S.-China income tax treaty allows

an exemption from tax for scholarship income received by a

Chinese student temporarily present in the United States. Under

U.S. law, this student will become a resident alien for tax

purposes if his or her stay in the United States exceeds 5

calendar years. However, paragraph 2 of the first Protocol to the

U.S.-China treaty (dated April 30, 1984) allows the provisions of

Article 20 to continue to apply even after the Chinese student

becomes a resident alien of the United States. A Chinese

student who qualifies for this exception (under paragraph 2 of

the first protocol) and is relying on this exception to claim an

exemption from tax on his or her scholarship or fellowship

income would attach to Form W-9 a statement that includes the

information described above to support that exemption.

Note. You are requested to check the appropriate box for your

status (individual/sole proprietor, corporation, etc.).

4. The type and amount of income that qualifies for the

exemption from tax.

5. Sufficient facts to justify the exemption from tax under the

terms of the treaty article.

Nonresident alien who becomes a resident alien. Generally,

only a nonresident alien individual may use the terms of a tax

treaty to reduce or eliminate U.S. tax on certain types of income.

However, most tax treaties contain a provision known as a

“saving clause.” Exceptions specified in the saving clause may

permit an exemption from tax to continue for certain types of

income even after the payee has otherwise become a U.S.

resident alien for tax purposes.

If you are a U.S. resident alien who is relying on an exception

contained in the saving clause of a tax treaty to claim an

exemption from U.S. tax on certain types of income, you must

attach a statement to Form W-9 that specifies the following five

items:

1. The treaty country. Generally, this must be the same treaty

under which you claimed exemption from tax as a nonresident

alien.

2. The treaty article addressing the income.

3. The article number (or location) in the tax treaty that

contains the saving clause and its exceptions.

Also see Special rules for partnerships on page 1.

Foreign person. If you are a foreign person, do not use Form

W-9. Instead, use the appropriate Form W-8 (see Publication

515, Withholding of Tax on Nonresident Aliens and Foreign

Entities).

● The U.S. grantor or other owner of a grantor trust and not the

trust, and

● The U.S. trust (other than a grantor trust) and not the

beneficiaries of the trust.

Limited liability company (LLC). Check the “Limited liability

company” box only and enter the appropriate code for the tax

classification (“D” for disregarded entity, “C” for corporation, “P” 

for partnership) in the space provided.

For a single-member LLC (including a foreign LLC with a

domestic owner) that is disregarded as an entity separate from

its owner under Regulations section 301.7701-3, enter the

owner’s name on the “Name” line. Enter the LLC’s name on the

“Business name” line.

For an LLC classified as a partnership or a corporation, enter

the LLC’s name on the “Name” line and any business, trade, or

DBA name on the “Business name” line.
Form W-9 (Rev. 10-2007) Page 3

Part I. Taxpayer Identification

Number (TIN)

Enter your TIN in the appropriate box. If you are a resident

alien and you do not have and are not eligible to get an SSN,

your TIN is your IRS individual taxpayer identification number

(ITIN). Enter it in the social security number box. If you do not

have an ITIN, see How to get a TIN below.

How to get a TIN. If you do not have a TIN, apply for one

immediately. To apply for an SSN, get Form SS-5, Application

for a Social Security Card, from your local Social Security

Administration office or get this form online at www.ssa.gov. You

may also get this form by calling 1-800-772-1213. Use Form

W-7, Application for IRS Individual Taxpayer Identification

Number, to apply for an ITIN, or Form SS-4, Application for

Employer Identification Number, to apply for an EIN. You can

apply for an EIN online by accessing the IRS website at

www.irs.gov/businesses and clicking on Employer Identification

Number (EIN) under Starting a Business. You can get Forms W-7

and SS-4 from the IRS by visiting www.irs.gov or by calling

1-800-TAX-FORM (1-800-829-3676).

If you are asked to complete Form W-9 but do not have a TIN,

write “Applied For” in the space for the TIN, sign and date the

form, and give it to the requester. For interest and dividend

payments, and certain payments made with respect to readily

tradable instruments, generally you will have 60 days to get a

TIN and give it to the requester before you are subject to backup

withholding on payments. The 60-day rule does not apply to

other types of payments. You will be subject to backup

withholding on all such payments until you provide your TIN to

the requester.

If you are a sole proprietor and you have an EIN, you may

enter either your SSN or EIN. However, the IRS prefers that you

use your SSN.

If you are a single-member LLC that is disregarded as an

entity separate from its owner (see Limited liability company

(LLC) on page 2), enter the owner’s SSN (or EIN, if the owner

has one). Do not enter the disregarded entity’s EIN. If the LLC is

classified as a corporation or partnership, enter the entity’s EIN.

Note. See the chart on page 4 for further clarification of name

and TIN combinations.

Note. Entering “Applied For” means that you have already

applied for a TIN or that you intend to apply for one soon.

Caution: A disregarded domestic entity that has a foreign owner

must use the appropriate Form W-8.

9. A futures commission merchant registered with the

Commodity Futures Trading Commission,

10. A real estate investment trust,

11. An entity registered at all times during the tax year under

the Investment Company Act of 1940,

12. A common trust fund operated by a bank under section

584(a),

13. A financial institution,

14. A middleman known in the investment community as a

nominee or custodian, or

15. A trust exempt from tax under section 664 or described in

section 4947.

THEN the payment is exempt

for . . .

IF the payment is for . . .

All exempt payees except 

for 9

Interest and dividend payments

Exempt payees 1 through 13.

Also, a person registered under

the Investment Advisers Act of

1940 who regularly acts as a

broker

Broker transactions

Barter exchange transactions Exempt payees 1 through 5

and patronage dividends

Generally, exempt payees 

1 through 7

Payments over $600 required

to be reported and direct

sales over $5,000

See Form 1099-MISC, Miscellaneous Income, and its instructions.

However, the following payments made to a corporation (including gross

proceeds paid to an attorney under section 6045(f), even if the attorney is a

corporation) and reportable on Form 1099-MISC are not exempt from

backup withholding: medical and health care payments, attorneys’ fees, and

payments for services paid by a federal executive agency.

The chart below shows types of payments that may be

exempt from backup withholding. The chart applies to the

exempt payees listed above, 1 through 15.

1

2

7. A foreign central bank of issue,

8. A dealer in securities or commodities required to register in

the United States, the District of Columbia, or a possession of

the United States,

2

The following payees are exempt from backup withholding:

1. An organization exempt from tax under section 501(a), any

IRA, or a custodial account under section 403(b)(7) if the account

satisfies the requirements of section 401(f)(2),

2. The United States or any of its agencies or

instrumentalities,

3. A state, the District of Columbia, a possession of the United

States, or any of their political subdivisions or instrumentalities,

4. A foreign government or any of its political subdivisions,

agencies, or instrumentalities, or

5. An international organization or any of its agencies or

instrumentalities.

Other payees that may be exempt from backup withholding

include:

6. A corporation,

Generally, individuals (including sole proprietors) are not exempt

from backup withholding. Corporations are exempt from backup

withholding for certain payments, such as interest and dividends.

Note. If you are exempt from backup withholding, you should

still complete this form to avoid possible erroneous backup

withholding.

1

1. Interest, dividend, and barter exchange accounts

opened before 1984 and broker accounts considered active

during 1983. You must give your correct TIN, but you do not

have to sign the certification.

2. Interest, dividend, broker, and barter exchange

accounts opened after 1983 and broker accounts considered

inactive during 1983. You must sign the certification or backup

withholding will apply. If you are subject to backup withholding

and you are merely providing your correct TIN to the requester,

you must cross out item 2 in the certification before signing the

form.

Part II. Certification

For a joint account, only the person whose TIN is shown in

Part I should sign (when required). Exempt payees, see Exempt

Payee on page 2.

To establish to the withholding agent that you are a U.S. person,

or resident alien, sign Form W-9. You may be requested to sign

by the withholding agent even if items 1, 4, and 5 below indicate

otherwise.

Signature requirements. Complete the certification as indicated

in 1 through 5 below.
Form W-9 (Rev. 10-2007) Page 4

For this type of account: Give name and EIN of:

3. Real estate transactions. You must sign the certification.

You may cross out item 2 of the certification.

A valid trust, estate, or pension trust

6.

Legal entity 4

4. Other payments. You must give your correct TIN, but you

do not have to sign the certification unless you have been

notified that you have previously given an incorrect TIN. “Other

payments” include payments made in the course of the

requester’s trade or business for rents, royalties, goods (other

than bills for merchandise), medical and health care services

(including payments to corporations), payments to a

nonemployee for services, payments to certain fishing boat crew

members and fishermen, and gross proceeds paid to attorneys

(including payments to corporations).

Corporate or LLC electing The corporation

corporate status on Form 8832

7.

Association, club, religious, The organization

charitable, educational, or other

tax-exempt organization

8.

5. Mortgage interest paid by you, acquisition or

abandonment of secured property, cancellation of debt,

qualified tuition program payments (under section 529), IRA,

Coverdell ESA, Archer MSA or HSA contributions or

distributions, and pension distributions. You must give your

correct TIN, but you do not have to sign the certification.

Partnership or multi-member LLC The partnership

9.

A broker or registered nominee The broker or nominee

10.

Account with the Department of The public entity

Agriculture in the name of a public

entity (such as a state or local

government, school district, or

prison) that receives agricultural

program payments

11.

Privacy Act Notice

List first and circle the name of the person whose number you furnish. If only one person

on a joint account has an SSN, that person’s number must be furnished.

Circle the minor’s name and furnish the minor’s SSN.

You must show your individual name and you may also enter your business or “DBA” 

name on the second name line. You may use either your SSN or EIN (if you have one),

but the IRS encourages you to use your SSN.

List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN

of the personal representative or trustee unless the legal entity itself is not designated in

the account title.) Also see Special rules for partnerships on page 1.

Note. If no name is circled when more than one name is listed,

the number will be considered to be that of the first name listed.

Disregarded entity not owned by an

individual

The owner

12.

You must provide your TIN whether or not you are required to file a tax return. Payers must generally withhold 28% of taxable interest, dividend, and certain other

payments to a payee who does not give a TIN to a payer. Certain penalties may also apply.

Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons who must file information returns with the IRS to report interest,

dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt, or

contributions you made to an IRA, or Archer MSA or HSA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return.

The IRS may also provide this information to the Department of Justice for civil and criminal litigation, and to cities, states, the District of Columbia, and U.S.

possessions to carry out their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal

nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism.

1

2

3

4

Secure Your Tax Records from Identity Theft

Identity theft occurs when someone uses your personal

information such as your name, social security number (SSN), or

other identifying information, without your permission, to commit

fraud or other crimes. An identity thief may use your SSN to get

a job or may file a tax return using your SSN to receive a refund.

What Name and Number To Give the Requester

For this type of account: Give name and SSN of:

1. Individual The individual

The actual owner of the account or,

if combined funds, the first

individual on the account

2. Two or more individuals (joint

account)

The minor 2

3. Custodian account of a minor

(Uniform Gift to Minors Act)

The grantor-trustee 1

4. a. The usual revocable savings

trust (grantor is also trustee)

The actual owner 1

b. So-called trust account that is

not a legal or valid trust under

state law

The owner 3

5. Sole proprietorship or disregarded

entity owned by an individual

Call the IRS at 1-800-829-1040 if you think your identity has

been used inappropriately for tax purposes.

1

To reduce your risk:

● Protect your SSN,

● Ensure your employer is protecting your SSN, and

● Be careful when choosing a tax preparer.

Victims of identity theft who are experiencing economic harm

or a system problem, or are seeking help in resolving tax

problems that have not been resolved through normal channels,

may be eligible for Taxpayer Advocate Service (TAS) assistance.

You can reach TAS by calling the TAS toll-free case intake line

at 1-877-777-4778 or TTY/TDD 1-800-829-4059.

Protect yourself from suspicious emails or phishing

schemes. Phishing is the creation and use of email and

websites designed to mimic legitimate business emails and

websites. The most common act is sending an email to a user

falsely claiming to be an established legitimate enterprise in an

attempt to scam the user into surrendering private information

that will be used for identity theft.

The IRS does not initiate contacts with taxpayers via emails.

Also, the IRS does not request personal detailed information

through email or ask taxpayers for the PIN numbers, passwords,

or similar secret access information for their credit card, bank, or

other financial accounts.

If you receive an unsolicited email claiming to be from the IRS,

forward this message to phishing@irs.gov. You may also report

misuse of the IRS name, logo, or other IRS personal property to

the Treasury Inspector General for Tax Administration at

1-800-366-4484. You can forward suspicious emails to the

Federal Trade Commission at: spam@uce.gov or contact them at

www.consumer.gov/idtheft or 1-877-IDTHEFT(438-4338).

Visit the IRS website at www.irs.gov to learn more about

identity theft and how to reduce your risk.
Department of the Treasury Instructions for the Internal Revenue Service

Requester of Form W-9

(Rev. September 2007)

Request for Taxpayer Identification Number

and Certification

Section references are to the Internal Revenue Code unless

otherwise noted. Electronic Submission of Forms W-9

Requesters may establish a system for payees and

payees’ agents to submit Forms W-9 electronically, What’s New including by fax. A requester is anyone required to file an

information return. A payee is anyone required to provide Section 6049 contains new information reporting a taxpayer identification number (TIN) to the requester. requirements for tax-exempt interest. For information on Payee’s agent. A payee’s agent can be an investment certification rules for tax-exempt interest payments, see

Notice 2006-93 on page 798 of Internal Revenue advisor (corporation, partnership, or individual) or an

Bulletin(I.R.B.) 2006-44 at introducing broker. An investment advisor must be

www.irs.gov/pub/irs-irbs/irb06-44.pdf. registered with the Securities Exchange Commission

(SEC) under the Investment Advisers Act of 1940. The

introducing broker is a broker-dealer that is regulated by Reminders the SEC and the National Association of Securities

• The backup withholding rate is 28% for reportable Dealers, Inc., and that is not a payer. Except for a broker

payments. who acts as a payee’s agent for “readily tradable

• The IRS website offers TIN Matching e-services for instruments,” the advisor or broker must show in writing

payers to validate name and TIN combinations. See to the payer that the payee authorized the advisor or

Taxpayer Identification Number (TIN) Matching broker to transmit the Form W-9 to the payer.

on page 4. Electronic system. Generally, the electronic system

must: How Do I Know When To Use • Ensure the information received is the information

sent, and document all occasions of user access that Form W-9? result in the submission; Use Form W-9 to request the taxpayer identification • Make reasonably certain that the person accessing the number (TIN) of a U.S. person (including a resident alien) system and submitting the form is the person identified and to request certain certifications and claims for on Form W-9, the investment advisor, or the introducing exemption. (See Purpose of Form on Form W-9.) broker; Withholding agents may require signed Forms W-9 from • Provide the same information as the paper Form W-9; U.S. exempt recipients to overcome any presumptions of • Be able to supply a hard copy of the electronic Form foreign status. For federal purposes, a U.S. person W-9 if the Internal Revenue Service requests it; and includes but is not limited to: • Require as the final entry in the submission an • An individual who is a U.S. citizen or U.S. resident electronic signature by the payee whose name is on alien, Form W-9 that authenticates and verifies the submission. • A partnership, corporation, company, or association The electronic signature must be under penalties of created or organized in the United States or under the perjury and the perjury statement must contain the laws of the United States, language of the paper Form W-9. • Any estate (other than a foreign estate), or

• A domestic trust (as defined in Regulations section For Forms W-9 that are not required to be signed,

301.7701-7). the electronic system need not provide for an

electronic signature or a perjury statement.

TIP

A partnership may require a signed Form W-9 from its

U.S. partners to overcome any presumptions of foreign For more details, see the following. status and to avoid withholding on the partner’s allocable • Announcement 98-27 on page 30 of I.R.B. 1998-15 share of the partnership’s effectively connected income. available at

For more information, see Regulations section 1.1446-1. www.irs.gov/pub/irs-irbs/irb98-15.pdf.

• Announcement 2001-91 on page 221 of I.R.B. 2001-36 Advise foreign persons to use the appropriate available at www.irs.gov/pub/irs-irbs/irb01-36.pdf. Form W-8. See Pub. 515, Withholding of Tax on

Nonresident Aliens and Foreign Entities, for more

information and a list of the W-8 forms. Individual Taxpayer Identification

Also, a nonresident alien individual may, under certain Number (ITIN)

circumstances, claim treaty benefits on scholarships and Form W-9 (or an acceptable substitute) is used by

fellowship grant income. See Pub. 515 or Pub. 519, U.S. persons required to file information returns with the IRS

Tax Guide for Aliens, for more information. to get the payee’s (or other person’s) correct name and

Cat. No. 20479P
TIN. For individuals, the TIN is generally a social security page 22 of I.R.B. 1996-8 at

number (SSN). www.irs.gov/pub/irs-irbs/irb96-08.pdf.

However, in some cases, individuals who become U.S.

resident aliens for tax purposes are not eligible to obtain TIN Applied for

an SSN. This includes certain resident aliens who must For interest and dividend payments and certain payments

receive information returns but who cannot obtain with respect to readily tradable instruments, the payee

an SSN. may return a properly completed, signed Form W-9 to

you with “Applied For” written in Part I. This is an These individuals must apply for an ITIN on Form W-7,

Application for IRS Individual Taxpayer Identification “awaiting-TIN” certificate. The payee has 60 calendar

Number, unless they have an application pending for an days, from the date you receive this certificate, to provide

SSN. Individuals who have an ITIN must provide it on a TIN. If you do not receive the payee’s TIN at that time,

you must begin backup withholding on payments. Form W-9.

Reserve rule. You must backup withhold on any

Substitute Form W-9 reportable payments made during the 60-day period if a

You may develop and use your own Form W-9 (a payee withdraws more than $500 at one time, unless the

payee reserves 28 percent of all reportable payments substitute Form W-9) if its content is substantially similar made to the account. to the official IRS Form W-9 and it satisfies certain

certification requirements. Alternative rule. You may also elect to backup withhold

You may incorporate a substitute Form W-9 into other during this 60-day period, after a 7-day grace period,

under one of the two alternative rules discussed below. business forms you customarily use, such as account

signature cards. However, the certifications on the Option 1. Backup withhold on any reportable substitute Form W-9 must clearly state (as shown on the payments if the payee makes a withdrawal from the official Form W-9) that under penalties of perjury: account after the close of 7 business days after you

1. The payee’s TIN is correct, receive the awaiting-TIN certificate. Treat as reportable

2. The payee is not subject to backup withholding due payments all cash withdrawals in an amount up to the

to failure to report interest and dividend income, and reportable payments made from the day after you receive

3. The payee is a U.S. person. the awaiting-TIN certificate to the day of withdrawal.

Option 2. Backup withhold on any reportable You may not: payments made to the payee’s account, regardless of 1. Use a substitute Form W-9 that requires the payee, whether the payee makes any withdrawals, beginning no by signing, to agree to provisions unrelated to the later than 7 business days after you receive the required certifications, or awaiting-TIN certificate. 2. Imply that a payee may be subject to backup

withholding unless the payee agrees to provisions on the The 60-day exemption from backup withholding

substitute form that are unrelated to the required does not apply to any payment other than

certifications. CAUTION interest, dividends, and certain payments relating

!

to readily tradable instruments. Any other reportable

A substitute Form W-9 that contains a separate payment, such as nonemployee compensation, is subject

signature line just for the certifications satisfies the to backup withholding immediately, even if the payee has

requirement that the certifications be clearly stated. applied for and is awaiting a TIN.

If a single signature line is used for the required Even if the payee gives you an awaiting-TIN

certifications and other provisions, the certifications must certificate, you must backup withhold on reportable

be highlighted, boxed, printed in bold-face type, or interest and dividend payments if the payee does not

presented in some other manner that causes the certify, under penalties of perjury, that the payee is not

language to stand out from all other information subject to backup withholding.

contained on the substitute form. Additionally, the If you do not collect backup withholdings from affected following statement must be presented to stand out in the payees as required, you may become liable for any same manner as described above and must appear uncollected amount. immediately above the single signature line:

“The Internal Revenue Service does not require your Payees Exempt From Backup consent to any provision of this document other than the

certifications required to avoid backup withholding.” Withholding

Even if the payee does not provide a TIN in the manner If you use a substitute form, you are required to

provide the Form W-9 instructions to the payee only if he required, you are not required to backup withhold on any

or she requests them. However, if the IRS has notified payments you make if the payee is:

the payee that backup withholding applies, then you must 1. An organization exempt from tax under

instruct the payee to strike out the language in the section 501(a), any IRA where the payor is also the

certification that relates to underreporting. This instruction trustee or custodian, or a custodial account under section

can be given orally or in writing. See item 2 of the 403(b)(7) if the account satisfies the requirements of

Certification on Form W-9. You can replace “defined section 401(f)(2),

below” with “defined in the instructions” in item 3 of the 2. The United States or any of its agencies or

Certification on Form W-9 when the instructions will not instrumentalities,

be provided to the payee except upon request. For more 3. A state, the District of Columbia, a possession of

information, see Revenue Procedure 83-89,1983-2, C.B. the United States, or any of their political subdivisions or

613; amplified by Revenue Procedure 96-26 which is on instrumentalities,

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4. A foreign government or any of its political • Payments of patronage dividends not paid in money.

subdivisions, agencies, or instrumentalities, or • Payments made by certain foreign organizations. 5. An international organization or any of its agencies • Section 404(k) distributions made by an ESOP. or instrumentalities.

Other payees that may be exempt from backup Interest payments

withholding include: • Payments of interest on obligations issued by

6. A corporation, individuals. However, if you pay $600 or more of interest

7. A foreign central bank of issue, in the course of your trade or business to a payee, you

8. A dealer in securities or commodities required to must report the payment. Backup withholding applies to

register in the United States, the District of Columbia, or the reportable payment if the payee has not provided a

a possession of the United States, TIN or has provided an incorrect TIN.

9. A futures commission merchant registered with the • Payments described in section 6049(b)(5) to Commodity Futures Trading Commission, nonresident aliens.

10. A real estate investment trust, • Payments on tax-free covenant bonds under 11. An entity registered at all times during the tax year section 1451. under the Investment Company Act of 1940, • Payments made by certain foreign organizations. 12. A common trust fund operated by a bank under • Mortgage or student loan interest paid to you. section 584(a),

13. A financial institution, Other types of payment 14. A middleman known in the investment community • Wages. as a nominee or custodian, or • Distributions from a pension, annuity, profit-sharing or 15. A trust exempt from tax under section 664 or

described in section 4947. stock bonus plan, any IRA where the payor is also the

trustee or custodian, an owner-employee plan, or other

The following types of payments are exempt from deferred compensation plan.

backup withholding as indicated for items 1 through 15 • Distributions from a medical or health savings account

above. and long-term care benefits.

• Certain surrenders of life insurance contracts. Interest and dividend payments. All listed payees are

exempt except the payee in item 9. • Distribution from qualified tuition programs or

Coverdell ESAs. Broker transactions. All payees listed in items 1 • Gambling winnings if regular gambling winnings through 13 are exempt. A person registered under the withholding is required under section 3402(q). However, Investment Advisers Act of 1940 who regularly acts as a if regular gambling winnings withholding is not required broker is also exempt. under section 3402(q), backup withholding applies if the Barter exchange transactions and patronage payee fails to furnish a TIN. dividends. Only payees listed in items 1 through 5 are • Real estate transactions reportable under exempt. section 6045(e).

Payments reportable under sections 6041 and 6041A. • Cancelled debts reportable under section 6050P. Only payees listed in items 1 through 7 are generally • Fish purchases for cash reportable under exempt. section 6050R.

However, the following payments made to a • Certain payment card transactions by a qualified corporation (including gross proceeds paid to an attorney payment card agent (as described in Revenue Procedure under section 6045(f), even if the attorney is a 2004-42 and Regulations section 31.3406(g)-1(f) and if corporation) and reportable on Form 1099-MISC, the requirements under Regulations section Miscellaneous Income, are not exempt from backup 31.3406(g)-1(f) are met. Revenue Procedure 2004-42 is withholding. on page 121 of I.R.B. 2004-31 which is available at

• Medical and health care payments. www.irs.gov/pub/irs-irbs/irb04-31.pdf.

• Attorneys’ fees.

• Payments for services paid by a federal executive Joint Foreign Payees agency. (See Revenue Ruling 2003-66 on page 1115 in If the first payee listed on an account gives you a I.R.B. 2003-26 at www.irs.gov/pub/irs-irbs/irb03-26.pdf.) Form W-8 or a similar statement signed under penalties

Payments Exempt From Backup of perjury, backup withholding applies unless: 

1. Every joint payee provides the statement regarding Withholding foreign status, or

Payments that are not subject to information reporting 2. Any one of the joint payees who has not also are not subject to backup withholding. For details, established foreign status gives you a TIN. see sections 6041, 6041A, 6042, 6044, 6045, 6049,

6050A, and 6050N, and their regulations. The following If any one of the joint payees who has not established payments are generally exempt from backup withholding. foreign status gives you a TIN, use that number for Dividends and patronage dividends purposes of backup withholding and information • Payments to nonresident aliens subject to withholding reporting. under section 1441.

• Payments to partnerships not engaged in a trade or For more information on foreign payees, see the

business in the United States and that have at least one Instructions for the Requester of Forms W-8BEN,

nonresident alien partner. W-8ECI, W-8EXP, and W-8IMY.

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IRS’s records. (See Taxpayer Identification Number (TIN) Names and TINs To Use Matching below.) You may have to send a “B” notice to

for Information Reporting the payee to solicit another TIN. Pub. 1281, Backup

Withholding for Missing and Incorrect Name/TIN(s), Show the full name and address as provided on Form

W-9 on the information return filed with the IRS and on contains copies of the two types of “B” notices.

the copy furnished to the payee. If you made payments to

more than one payee or the account is in more than one Taxpayer Identification Number (TIN)

name, enter on the first name line only the name of the Matching payee whose TIN is shown on the information return. You TIN Matching allows a payer or authorized agent who is may show the names of any other individual payees in required to file Forms 1099-B, DIV, INT, MISC, OID, the area below the first name line. and /or PATR to match TIN and name combinations with

Sole proprietor. Enter the individual’s name on the first IRS records before submitting the forms to the IRS. TIN name line. On the second name line, enter the business Matching is one of the e-services products that is offered, name or “doing business as (DBA)” if provided. You may and is accessible through the IRS website. Go to not enter only the business name. For the TIN, you may www.irs.gov and search for “e-services.” It is anticipated enter either the individual’s SSN or the employer that payers who validate the TIN and name combinations identification number (EIN) of the business. However, the before filing information returns will receive fewer backup IRS encourages you to use the SSN. withholding (CP2100) “B” notices and penalty notices.

LLC. For an LLC that is disregarded as an entity

separate from its owner, you must show the owner’s Additional Information

name on the first name line. On the second name line, For more information on backup withholding, see Pub. you may enter the LLC’s name. Use the owner’s TIN. Do 1281.

not enter the disregarded entity’s EIN.

Notices From the IRS

The IRS will send you a notice if the payee’s name and

TIN on the information return you filed do not match the

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Department of the Treasury Instructions for the Internal Revenue Service

Requester of Forms

W-8BEN, W-8ECI, W-8EXP,

and W-8IMY

(Rev. May 2006)

Generally, an amount is subject to withholding if it is Instructions for the an amount from sources within the United States that is

Withholding Agent fixed or determinable annual or periodical (FDAP)

income. FDAP income is all income included in gross Section references are to the Internal Revenue Code income, including interest (and original issue discount), unless otherwise noted. dividends, rents, royalties, and compensation. FDAP

What’s New income does not include most gains from the sale of

property (including market discount and option A Form W-8 provided by a foreign grantor trust with 5 or premiums). FDAP income also does not include items of fewer grantors is valid even if the trust does not provide a income excluded from gross income without regard to the U.S. taxpayer identification number. U.S. or foreign status of the owner of the income, such as

interest under section 103(a).

Before You Begin Generally, a partnership that allocates effectively

These instructions supplement the instructions for: connected taxable income (ECTI) to a foreign person

• Form W-8BEN, Certificate of Foreign Status of must withhold at the highest tax rate applicable to that

Beneficial Owner for United States Tax Withholding. person for the type of income allocated (for example,

• Form W-8ECI, Certificate of Foreign Person’s Claim ordinary income or capital gains). Unless the partnership

That Income Is Effectively Connected With the Conduct is a publicly traded partnership, the partnership must

of a Trade or Business in the United States. withhold in the year the ECTI is allocable to the foreign

• Form W-8EXP, Certificate of Foreign Government or partner, rather than the year in which the distribution is

Other Foreign Organization for United States Tax made. The partnership may rely on documentation (for

Withholding. example, Form W-8BEN or Form W-9) to determine if the

• Form W-8IMY, Certificate of Foreign Intermediary, partner is foreign or domestic and the type of partner (for

Foreign Flow-Through Entity, or Certain U.S. Branches example, individual or corporate). A partnership that does

for United States Tax Withholding. not receive valid documentation or knows or has reason

to know that the documentation is incorrect or unreliable

For general information and the purpose of each of the must presume the partner is foreign. forms described in these instructions, see those forms

and their accompanying instructions. Who Is the Withholding Agent?

Throughout these instructions, a reference to or Any person, U.S. or foreign, that has control, receipt, or mention of “Form W-8” includes Forms W-8BEN, custody of an amount subject to withholding or who can W-8ECI, W-8EXP, and W-8IMY. disburse or make payments of an amount subject to

withholding is a withholding agent. The withholding agent

Requirement To Withhold may be an individual, corporation, partnership, trust,

association, or any other entity, including (but not limited For purposes of section 1441 and 1442, a withholding to) any foreign intermediary, foreign partnership, or U.S. agent must withhold 30% of any payment of an amount branch of certain foreign banks and insurance subject to withholding made to a payee that is a foreign companies. If several persons qualify as withholding person unless it can associate the payment with agents for a single payment, the tax required to be documentation (for example, Form W-8 or Form W-9) withheld must only be withheld once. Generally, the upon which it can rely to treat the payment as made to person who pays (or causes to be paid) an amount (a) a payee that is a U.S. person or (b) a beneficial owner subject to withholding to the foreign person (or to its that is a foreign person entitled to a reduced rate of agent) must withhold. See the instructions for Form 1042, withholding. However, a withholding agent making a Annual Withholding Tax Return for U.S. Source Income payment to a foreign person need not withhold if the of Foreign Persons, and Form 1042-S, Foreign Person’s foreign person assumes responsibility for withholding on U.S. Source Income Subject to Withholding, for return the payment as a qualified intermediary, a withholding filing and information reporting obligations. foreign partnership, or a withholding foreign trust and has

provided a valid Form W-8IMY. Withholding is also not For ECTI allocable to a foreign partner, the partnership

required if the payment is made to a U.S. branch of is generally the withholding agent and must file Form

certain foreign insurance companies or foreign banks that 8804, Annual Return for Partnership Withholding Tax

agree to be treated as U.S. persons and provide a valid (Section 1446), Form 8805, Foreign Partner’s Information

Form W-8IMY. Statement of Section 1446 Withholding Tax, and Form

Cat. No. 26698G
8813, Partnership Withholding Tax Payment Voucher Requesting Form W-8 (Section 1446). Request a Form W-8 from any person to whom you are

making a payment that you presume or otherwise believe Responsibilities of the Withholding to be a foreign person. You should request the form

Agent before making a payment so that you have the form

when you make the payment. A withholding agent or If you are a withholding agent making a payment of U.S. payer that fails to obtain a Form W-8 or Form W-9 and source interest, dividends, rents, royalties, commissions, fails to withhold as required under the presumption rules nonemployee compensation, other fixed or determinable may be assessed tax at the 30% rate or backup annual or periodical gains, profits, or income, and certain withholding rate of 28%, as well as interest and penalties other amounts (including broker and barter exchange for lack of compliance. transactions, and certain payments made by fishing boat

operators), you are generally required to obtain from the A partnership should request a Form W-8 or W-9 from

payee either a Form W-9, Request for Taxpayer any partner that is allocated income that is effectively

connected with the conduct of the partnership’s U.S. Identification Number and Certification, or a Form W-8.

These forms are also used to establish a person’s status trade or business. A partnership that fails to withhold as

for purposes of domestic information reporting (for required under section 1446, is liable for the tax required

example, on a Form 1099) and backup withholding. If you to be withheld. In addition, the partnership may be liable

for interest, penalties, and additions to the tax even if receive a Form W-9, you must generally make an

information return on a Form 1099. If you receive a Form there is no underlying tax liability due from a foreign

W-8, you are exempt from reporting on Form 1099, but partner on its allocable share of partnership ECTI.

you may have to file Form 1042-S and withhold under the When you receive a completed Form W-8, you must

rules applicable to payments made to foreign persons. review it for completeness and accuracy. This

See the Instructions for Form 1042-S for more responsibility extends to the information attached to Form

information. W-8IMY, including beneficial owner withholding

Generally, a foreign person that is a partner in a certificates or other documentation and information. The

following special rules apply when requesting a specific partnership that submits a Form W-8 for purposes of type of Form W-8. section 1441 or 1442 will satisfy the documentation

requirements under section 1446. However, in some Form W-8BEN cases the documentation requirements for sections 1441 Request Form W-8BEN from any foreign person or and 1442 do not match the documentation requirements organization to which you are making a payment if it is of section 1446. For example, a partner may generally the beneficial owner of the income, whether or not it is submit Form W-8BEN to establish itself as a foreign claiming a reduced rate of, or exemption from, person for purposes of section 1446, but a foreign withholding. In addition, if you are a partnership, request partnership or foreign grantor trust must submit Form

W-8IMY and accompanying documentation as provided Form W-8BEN for purposes of section 1446 from any

foreign partner that is allocated ECTI, other than a by Regulations sections 1.1446-1 through 1.1446-6. Also, foreign partner that is a partnership, grantor trust, or the owner of a disregarded entity, rather than the entity

itself, must submit the appropriate Form W-8 for person or organization that qualifies to file Form

W-8EXP. purposes of section 1446. Also request Form W-8BEN when a payee may claim Generally, you must withhold 30% from the gross an exception from domestic information reporting as a amount of FDAP income paid to a foreign person unless foreign person or to establish that certain income is not you can reliably associate the payment with a Form W-8. effectively connected with the conduct of a U.S. trade or You can reliably associate a payment with a Form W-8 if business. you hold a valid form, you can reliably determine how

much of the payment relates to the form, and you have A beneficial owner is required to enter its U.S.

no actual knowledge or reason to know that any of the taxpayer identification number (TIN) on line 6 of Form

information or certifications on the form are unreliable or W-8BEN if it is a beneficial owner that is claiming benefits

incorrect. In addition, a partnership that has ECTI under an income tax treaty or submitting the form to a

allocable to a foreign partner is a withholding agent with partnership that conducts a trade or business in the

United States. respect to that income and must withhold in accordance

with the provisions of Regulations sections 1.1446-1 However, a U.S. TIN is not required to be shown in

through 1.1446-6. See the instructions to Forms 8804, order to claim treaty benefits on the following items of

8805, and 8813. income:

Do not send Forms W-8 to the IRS. Instead, keep the • Dividends and interest from stocks and debt

obligations that are actively traded; forms in your records for as long as they may be relevant • Dividends from any redeemable security issued by an to the determination of your tax liability under section investment company registered under the Investment 1461. Company Act of 1940 (mutual fund);

• Dividends, interest, or royalties from units of beneficial Failure To Obtain Form W-8 or Form interest in a unit investment trust that are (or were upon

W-9 — Presumption Rules issuance) publicly offered and are registered with the

SEC under the Securities Act of 1933; and If you do not receive a Form W-8 or Form W-9, or cannot • Income related to loans of any of the above securities. otherwise determine whether a payment should be

treated as made to a U.S. person or to a foreign person, A U.S. TIN is not required to claim treaty benefits if the

use the presumption rules provided in the regulations payment is unexpected and you, the withholding agent,

under sections 1441, 1446, 6045, and 6049. meet certain requirements. A payment is unexpected if

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you or the beneficial owner could not have reasonably between the parties (for example, an International Swaps

anticipated the payment during a time when an IRS and Derivatives Association Agreement), or in the

individual taxpayer identification number (ITIN) could be confirmation on the particular notional principal contract

obtained. This could be due to the nature of the payment transaction, that the payee is a U.S. person or a non-U.S.

or the circumstances in which the payment is made. A branch of a foreign person.

payment is not considered unexpected solely because Payments to certain U.S. branches. A payment to a the amount of the payment is not fixed. For more U.S. branch of certain foreign persons is presumed to be information, see Regulations section 1.1441-6(g). effectively connected with the conduct of a trade or

business within the United States even if the foreign Form W-8ECI person (or its U.S. branch) does not give you a Form Request Form W-8ECI from any foreign person or W-8ECI. U.S. branches to which this presumption applies organization to which you are making a payment if it is are:

the beneficial owner of the income and it claims that the • A U.S. branch of a foreign bank subject to regulatory income is effectively connected with the conduct of a supervision by the Federal Reserve Board, and trade or business in the United States. However, request • A U.S. branch of a foreign insurance company required a Form W-8BEN from a foreign partner that is allocated to file a National Association of Insurance

income that is effectively connected with the conduct of Commissioners (NAIC) annual statement with the the partnership’s trade or business in the United States, insurance department of a state, a territory, or the District unless the foreign partner has made an election under of Columbia.

section 871(d) or section 882(d). However, a payment to a U.S. branch described Note. If you receive a Form W-8ECI without a U.S. TIN above is not treated as effectively connected income if entered on line 6, you generally may not treat the income the branch provides a Form W-8IMY on which it indicates as effectively connected with a U.S. trade or business that the income it receives is not effectively connected and you must apply the appropriate presumption rules. with the conduct of a trade or business within the United

Your receipt of Form W-8ECI serves as a States and that it is using Form W-8IMY either to transmit

representation by the payee or beneficial owner that all appropriate documentation for persons for whom the

the income with which that form is associated is branch receives the payment or as evidence of its

effectively connected with the conduct of a trade or agreement with the withholding agent to be treated as a

business within the United States. Therefore, if a U.S. person. If Form W-8IMY is not provided and the

beneficial owner provides you with a Form W-8ECI, you income received by the branch is not effectively

may treat all of the U.S. source income identified on line connected income, then the branch must withhold,

9 paid to that beneficial owner as effectively connected whether the payment is collected on behalf of other

with the conduct of a trade or business within the United persons or on behalf of another branch of the same

States. entity.

If you pay items of income that are not identified on Form W-8EXP

line 9 by the beneficial owner as effectively connected Request Form W-8EXP from any foreign government, with the conduct of a trade or business within the United international organization, foreign central bank of issue, States, you are generally required to obtain from the foreign tax-exempt organization, foreign private payee another type of Form W-8. foundation, or government of a U.S. possession to which

You may not treat an amount as income effectively you are making a payment if such person is claiming an

connected with the conduct of a trade or business within exemption from withholding under section 115(2), 501(c),

the United States unless the beneficial owner gives you a 892, or 895, or claiming a reduced rate of withholding

valid Form W-8ECI. However, there are exceptions for under section 1443(b). For all other purposes, request

income paid on notional principal contracts and payments Form W-8BEN or W-8ECI. A Form W-8EXP submitted by

made to certain U.S. branches. a foreign person for purposes of withholding under

Notional principal contracts. Withholding at a 30% rate sections 1441 through 1443 will establish that partner’s

foreign status for purposes of section 1446. However, is not required on amounts paid under the terms of a except as provided in section 1.1446-3(c)(3) (regarding notional principal contract whether or not a Form W-8ECI certain tax-exempt organizations described in section is provided. However, if the income is effectively 501(c)), the submission of Form W-8EXP will have no connected, it is reportable by the withholding agent on effect on whether the partner is subject to withholding Form 1042-S. A withholding agent must treat income as under section 1446. effectively connected with the conduct of a U.S. trade or

business, even if a Form W-8ECI has not been received, A withholding agent may treat a payee as an

if the income is paid to a qualified business unit of a international organization without requiring a Form

foreign person located in the United States or, if the W-8EXP if the name of the payee is one designated as

income is paid to a qualified business unit of a foreign an international organization by Executive Order

person located outside the United States and the (pursuant to 22 U.S.C. 288 through 288(f)) and other

withholding agent knows, or has reason to know, the facts surrounding the payment reasonably indicate that

payment is effectively connected with the conduct of a the beneficial owner of the payment is an international

U.S. trade or business. However, a payment is not organization. With regard to amounts derived from

treated as effectively connected with the conduct of a bankers’ acceptances, a withholding agent may treat a

trade or business within the United States if the payee payee as a foreign central bank of issue without requiring

provides a Form W-8BEN representing that the income is a Form W-8EXP if the name of the payee and other facts

not effectively connected with a U.S. trade or business or surrounding the payment reasonably indicate that the

makes a representation in a master agreement that beneficial owner of the payment is a foreign central bank

governs the transactions in notional principal contracts of issue.

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A U.S. TIN is required if the beneficial owner is Investment Company Act of 1940, dividends, interest, or

claiming an exemption based solely on a claim of royalties from units of beneficial interest in a unit

tax-exempt status as a foreign private foundation (or investment trust that are (or were upon issuance) publicly

other foreign organization described under section offered and registered with the SEC under the Securities

501(c)). However, a U.S. TIN is not required from a Act of 1933, and amounts paid with respect to loans of

foreign private foundation that is subject to the 4% excise such securities, you have reason to know that the Form

tax on gross investment income (under section 4948(a)) W-8 is unreliable or incorrect for payments to direct

on income that would be exempt from withholding except account holders if one or more of the following

for section 4948(a) (for example, portfolio income). circumstances exist. In that case, you must either request

a new form or additional documentation to substantiate

Form W-8IMY the claims on the form.

Request Form W-8IMY from any person that is an 1. The Form W-8 is incomplete with respect to any item that intermediary (whether a qualified intermediary or a

nonqualified intermediary), a withholding foreign is relevant to the claims made, the form contains any

partnership, a withholding foreign trust, or a flow-through information that is inconsistent with the claims made, the

entity. A flow-through entity includes a foreign partnership form lacks information necessary to establish that the

beneficial owner is entitled to a reduced rate of (other than a withholding foreign partnership), a foreign withholding, or the withholding agent has other account simple or grantor trust (other than a withholding foreign information that is inconsistent with the claims made. trust), and, for any payments for which a treaty benefit is 2. The Form W-8 is used to establish foreign status and has claimed, any entity to the extent it is treated as fiscally

transparent under section 894. Appropriate withholding a permanent residence address in the United States, a

certificates, documentary evidence, and withholding mailing address in the United States, the withholding

statements must be associated with Form W-8IMY or you agent has a residence or mailing address in the United

must apply the presumption rules. States as part of its account information or is notified of a

new residence or mailing address in the United States.

Note. A qualified intermediary, withholding foreign However:

partnership, or a withholding foreign trust must provide a. An individual who has provided a Form W-8 may be

the EIN that was issued to the entity in such capacity (its treated as a foreign person if:

“QI-EIN,” “WP-EIN,” or “WT-EIN”). Otherwise, any Form • The withholding agent has in its possession or W-8IMY it submits is not valid. obtains documentary evidence (which does not contain

a U.S. address) that has been provided within the past Request Form W-8IMY for purposes of section 1446 3 years, the documentary evidence supports the claim only from a foreign upper-tier partnership or foreign of foreign status, and the individual provides the grantor trust. Generally, for purposes of section 1446, the withholding agent with a reasonable explanation, in W-8IMY submitted by these entities is used to transmit writing, supporting his or her claim of foreign status, or the forms of the owners of these entities. When such • The account is maintained at an office of the other forms are provided, a partnership may look through withholding agent outside the United States and the these entities to the beneficial owners when determining withholding agent is required to report payments to the its section 1446 tax obligation. individual annually to the tax authority of the country in

which the office is located and that country has an

Due Diligence Requirements income tax treaty in effect with the United States.

b. An entity that has provided a Form W-8 may be treated You are responsible for ensuring that all information as a foreign person if the withholding agent does not relating to the type of income for which Form W-8 is know or have reason to know that it is a flow-through submitted is complete and appears to be accurate. You entity and: may rely on the information and certifications provided on

the form (including the status of the beneficial owner as • The withholding agent has in its possession or

an individual, corporation, etc.) unless you have actual obtains documentation that substantiates that the entity

knowledge or reason to know that the information is is actually organized or created under the laws of a

unreliable or incorrect. You have reason to know that the foreign country, or

information is unreliable or incorrect if you have • The account is maintained at an office of the

knowledge of relevant facts or statements contained in withholding agent outside the United States and the

the withholding certificate or other documentation that withholding agent is required to report payments to the

would cause a reasonably prudent person in the position entity annually to the tax authority of the country in

of the withholding agent to question the claims made. For which the office is located and that country has an

example, if you have information in your records that income tax treaty in effect with the United States.

contradicts information provided on the form, you may 3. The form is provided with respect to an offshore account

not rely on the form. If you know or have reason to know and the account holder has standing instructions directing that any information is unreliable or incorrect, you must the withholding agent to pay amounts from its account to

obtain a new Form W-8 or other appropriate an address in, or an account maintained in, the United

documentation. States, unless the account holder provides a reasonable

explanation in writing that supports its foreign status. Financial institutions and actively traded 4. The Form W-8 is used to establish residence in a treaty instruments. If you are a financial institution (including a country and: regulated investment company) paying dividends and

interest from stocks and debt obligations that are actively

traded, dividends from any redeemable security issued

by an investment company registered under the

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a. The permanent residence address is not in the treaty • If you know or have reason to know of a change in

country or the withholding agent is notified of a new circumstances that makes any information on the current

permanent residence address that is not in the treaty form unreliable or incorrect.

country. However, the beneficial owner may be treated

as a resident of the treaty country if it provides a Example. A foreign investor opens an account with a

reasonable explanation for the permanent residence broker to purchase U.S. Treasury bonds and provides

address outside the treaty country or the withholding Form W-8BEN to obtain the portfolio interest exemption.

agent has in its possession, or obtains, documentary The investor does not complete Part II of Form W-8BEN

evidence that establishes residency in a treaty country. (because he is not claiming treaty benefits). Later, the

b. The mailing address is not in the treaty country or the investor purchases U.S. stock and claims treaty benefits

withholding agent has a mailing address that is not in on dividend income. The investor at that time completes

the treaty country as part of its account information. a new Form W-8BEN providing the information required

However, the beneficial owner may be treated as a in Part II.

resident of the treaty country if:

• The withholding agent has in its possession, or Period of Validity obtains, additional documentation supporting the claim

of residence in the treaty country and the additional Form W-8BEN documentation does not contain an address outside the Generally, a Form W-8BEN provided without a U.S. TIN treaty country, will remain in effect for a period starting on the date the • The withholding agent has in its possession, or form is signed and ending on the last day of the third obtains, documentation that establishes that the succeeding calendar year, unless a change in beneficial owner is an entity organized in a treaty circumstances makes any information on the form country (or an entity managed and controlled in a treaty incorrect. For example, a Form W-8BEN signed on country, if required by the applicable treaty), September 30, 2006, remains valid through December • The withholding agent knows that the beneficial 31, 2009. A Form W-8BEN with a U.S. TIN will remain in owner is a bank or insurance company that is a effect until a change of circumstances makes any resident of the treaty country and the mailing address is information on the form incorrect, provided that the the address of a branch of that bank or insurance withholding agent reports on Form 1042-S at least one

company, or payment annually to the beneficial owner. • The beneficial owner provides a written statement

that reasonably establishes that it is a resident of the Form W-8ECI

treaty country. Generally, a Form W-8ECI will remain in effect for a c. The account holder has standing instructions for the period starting on the date the form is signed and ending withholding agent to pay amounts from its account to on the last day of the third succeeding calendar year, an address outside, or an account maintained outside, unless a change in circumstances makes any information the treaty country unless the direct account holder on the form incorrect. provides a reasonable explanation in writing

establishing the account holder’s residency in a treaty

country. Form W-8EXP

Generally, a Form W-8EXP provided without a U.S. TIN

will remain in effect for a period starting on the date the For additional information on the due diligence form is signed and ending on the last day of the third requirements applicable to withholding agents, see

Regulations section 1.1441-7(b). succeeding calendar year. However, in the case of an

integral part of a foreign government (within the meaning

Dual claims. If you are making payments to a foreign of Temporary Regulations section 1.892-2T(a)(2)) or a

entity that is simultaneously claiming a reduced rate of foreign central bank of issue, a Form W-8EXP filed

tax on its own behalf and on behalf of persons in their without a U.S. TIN will remain in effect until a change in

capacity as interest holders in that entity, you may, at circumstances makes any of the information on the form

your option, accept the dual claims even though you hold incorrect. A Form W-8EXP furnished with a U.S. TIN will

different withholding certificates that require you to treat remain in effect until a change in circumstances makes

the entity inconsistently for different payments or for any information on the form incorrect provided that the

different portions of the same payment. If, however, withholding agent reports on Form 1042-S at least one

inconsistent claims are made for the same portion of a payment annually to the beneficial owner.

payment, you may either reject both claims and request

consistent claims or you may choose which reduction to Form W-8IMY

apply. For partnerships that allocate effectively Generally, a Form W-8IMY remains valid until the status connected taxable income to partners that are foreign of the person whose name is on the certificate is partnerships, the rules under section 1.1446-5 apply. changed in a way relevant to the certificate or

circumstances change that make the information on the Requesting a New Form W-8 certificate no longer correct. The indefinite validity period

Request a new Form W-8: does not extend, however, to any withholding certificates,

• Before the expiration of an existing Form W-8 (see documentary evidence, or withholding statements

Period of Validity below for more information), associated with the certificate. Moreover, it does not

• If the existing form does not support a claim of reduced extend to any statements attached to the certificate if a

rate for a type of income that the submitter of the form change of circumstances makes the information on the

has not previously received, or attached statements no longer correct.

-5-
Forms Received That Are Not Dated the penalties of perjury statement clearly stand out from

any other information contained on the form. Additionally, If a Form W-8 is valid except that the person providing the following statement must be presented in the same the form has not dated the form, the withholding agent manner as in the preceding sentence and must appear may date the form from the day it is received and immediately above the single signature line: “The Internal measure the validity period from that date. Revenue Service does not require your consent to any

provisions of this document other than the certifications

required to establish your status as a non-U.S. person Substitute Forms W-8 and, if applicable, obtain a reduced rate of withholding.”

You may develop and use your own Form W-8BEN, Form W-8ECI W-8ECI, W-8EXP, or W-8IMY (a substitute form) if its

content is substantially similar to the IRS’s official Form The substitute Form W-8ECI must contain all of the

W-8BEN, W-8ECI, W-8EXP, or W-8IMY (to the extent information required in Part I, other than lines 7 or 8. The

required by these instructions) and it satisfies certain certifications in Part II of Form W-8ECI must be included

certification requirements. You may develop and use a in a substitute form.

substitute form that is in a foreign language, provided that Penalties of perjury statement. The design of the the substitute form also provides the English version of substitute Form W-8ECI must be such that the

the statements and information otherwise required to be information and certifications that are being attested to by included on the substitute form. You may combine Forms the penalties of perjury statement clearly stand out from W-8BEN, W-8ECI, W-8EXP, and W-8IMY into a single any other information contained on the form. Additionally, substitute form. the following statement must be presented in the same

The substitute form must contain instructions that manner as in the preceding sentence and must appear

adequately inform the beneficial owner of what is meant immediately above the single signature line: “The Internal

by permanent residence address and beneficial Revenue Service does not require your consent to any

ownership. You are, however, encouraged to provide all provisions of this document other than the certifications

relevant instructions, especially if the payee requests required to establish your status as a non-U.S. person

them. and that the income for which this form is provided is

effectively connected with the conduct of a trade or You may incorporate a substitute Form W-8 into other business within the United States.” business forms you customarily use, such as account

signature cards, provided the required certifications are Form W-8EXP

clearly set forth. However, you may not: The substitute Form W-8EXP must contain all of the

1. Use a substitute form that requires the payee, by information required in Part I, lines 1 through 5, and line signing, to agree to provisions unrelated to the required 6, if a U.S. TIN is required. The substitute Form W-8EXP certifications, or must also contain all of the statements and certifications

2. Imply that a person may be subject to 30% contained in Parts II and III, but a specific part needs to withholding or backup withholding unless that person be included (in its entirety) only if it is relevant. For agrees to provisions on the substitute form that are example, if the only beneficial owners a U.S. withholding unrelated to the required certifications. agent has as account holders are foreign governments,

the withholding agent may use a substitute Form A substitute Form W-8 is valid only if it contains the W-8EXP that contains only the required information in same penalties of perjury statement as the official forms Part I, plus the required statements and certifications and the required signature. However, if the substitute from Part II that are related to foreign governments. form is contained in some other business form, the words Penalties of perjury statement. The design of the “information on this form” may be modified to refer to that substitute Form W-8EXP must be such that the portion of the business form containing the substitute information and certifications that are being attested to by form information. The design of the substitute form must

be such that the information and certifications that are the penalties of perjury statement clearly stand out from

any other information contained on the form. Additionally, being attested to by the penalties of perjury statement the following statement must be presented in the same clearly stand out from any other information contained in manner as in the preceding sentence and must appear the form.

immediately above the single signature line: “The Internal

Content of Substitute Form Revenue Service does not require your consent to any

provisions of this document other than the certifications

required to establish your status as a foreign Form W-8BEN government, international organization, foreign central The substitute Form W-8BEN must contain all of the bank of issue, foreign tax-exempt organization, foreign information required in Part I, lines 1 through 5, and line private foundation, or government of a U.S. possession.” 6, if a U.S. TIN is required. The certifications in Part II

must be included in a substitute form only if treaty Form W-8IMY

benefits are claimed, and then only to the extent that the The substitute Form W-8IMY must contain all of the certifications are required. For example, if the substitute information required in Part I, lines 1 through 5, and line form is intended for use by individuals only, the 6, if a U.S. TIN is required. The substitute Form W-8IMY certifications contained in boxes 9c and 9d are not must also contain all of the statements and certifications required. contained in Parts II, III, IV, V, or VI, but a specific part

Penalties of perjury statement. The design of the needs to be included (in its entirety) only if it is relevant.

substitute Form W-8BEN must be such that the For example, if the only intermediaries a U.S. withholding

information and certifications that are being attested to by agent has as account holders are qualified

-6-
intermediaries, the withholding agent may use a the penalties of perjury statement clearly stand out from

substitute Form W-8IMY that contains only the required any other information contained on the form. Additionally,

information from Part I, plus the statements and the following statement must be presented in the same

certifications from Part II. A substitute Form W-8IMY manner as in the preceding sentence and must appear

must also incorporate the same attachments as the immediately above the single signature line: “The Internal

official form. A withholding agent may also include any Revenue Service does not require your consent to any

information in a substitute Form W-8IMY, or require any provisions of this document other than the certifications

information to be associated with the form, that is required to establish your status as a qualified

reasonably related to his obligation to withhold and intermediary, a nonqualified intermediary, a specific type

correctly report payments. of U.S. branch, a withholding foreign partnership, a

Penalties of perjury statement. The design of the withholding foreign trust, a nonwithholding foreign

substitute Form W-8IMY must be such that the partnership, a nonwithholding foreign simple trust, or a

nonwithholding foreign grantor trust.” information and certifications that are being attested to by

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Form W-8BEN

(Rev. February 2006)

Department of the Treasury

Internal Revenue Service

Certificate of Foreign Status of Beneficial Owner

for United States Tax Withholding

See separate instructions.

Give this form to the withholding agent or payer. Do not send to the IRS.

OMB No. 1545-1621

Do not use this form for: Instead, use Form:

● A foreign partnership, a foreign simple trust, or a foreign grantor trust (see instructions for exceptions) W-8ECI or W-8IMY

● A foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization,

foreign private foundation, or government of a U.S. possession that received effectively connected income or that is

claiming the applicability of section(s) 115(2), 501(c), 892, 895, or 1443(b) (see instructions) W-8ECI or W-8EXP

● A person acting as an intermediary W-8IMY

● A person claiming that income is effectively connected with the conduct

of a trade or business in the United States W-8ECI

Part I

Part II

Identification of Beneficial Owner (See instructions.)

1

3

2

4

5

6 7

Name of individual or organization that is the beneficial owner

Type of beneficial owner:

Country of incorporation or organization

Permanent residence address (street, apt. or suite no., or rural route). Do not use a P.O. box or in-care-of address.

City or town, state or province. Include postal code where appropriate. Country (do not abbreviate)

U.S. taxpayer identification number, if required (see instructions) Foreign tax identifying number, if any (optional)

Individual Corporation Partnership Simple trust

Mailing address (if different from above)

City or town, state or province. Include postal code where appropriate. Country (do not abbreviate)

Claim of Tax Treaty Benefits (if applicable)

I certify that (check all that apply):

The beneficial owner is a resident of within the meaning of the income tax treaty between the United States and that country.

If required, the U.S. taxpayer identification number is stated on line 6 (see instructions).

The beneficial owner is not an individual, derives the item (or items) of income for which the treaty benefits are claimed, and, if

applicable, meets the requirements of the treaty provision dealing with limitation on benefits (see instructions).

The beneficial owner is not an individual, is claiming treaty benefits for dividends received from a foreign corporation or interest from a

U.S. trade or business of a foreign corporation, and meets qualified resident status (see instructions).

The beneficial owner is related to the person obligated to pay the income within the meaning of section 267(b) or 707(b), and will file

Form 8833 if the amount subject to withholding received during a calendar year exceeds, in the aggregate, $500,000.

Under penalties of perjury, I declare that I have examined the information on this form and to the best of my knowledge and belief it is true, correct, and complete. I

further certify under penalties of perjury that:

1 I am the beneficial owner (or am authorized to sign for the beneficial owner) of all the income to which this form relates,

2 The beneficial owner is not a U.S. person,

3 The income to which this form relates is (a) not effectively connected with the conduct of a trade or business in the United States, (b) effectively connected but is

not subject to tax under an income tax treaty, or (c) the partner’s share of a partnership’s effectively connected income, and

4 For broker transactions or barter exchanges, the beneficial owner is an exempt foreign person as defined in the instructions.

Sign Here Signature of beneficial owner (or individual authorized to sign for beneficial owner) Date (MM-DD-YYYY)

For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 25047Z Form W-8BEN (Rev. 2-2006)

Section references are to the Internal Revenue Code.

a

b

c

d

e

SSN or ITIN EIN

Capacity in which acting

Disregarded entity

Certification

9

Special rates and conditions (if applicable—see instructions): The beneficial owner is claiming the provisions of Article of the

treaty identified on line 9a above to claim a % rate of withholding on (specify type of income): .

Explain the reasons the beneficial owner meets the terms of the treaty article:

10

Government International organization

Central bank of issue Tax-exempt organization

Part IV

Part III Notional Principal Contracts

11 I have provided or will provide a statement that identifies those notional principal contracts from which the income is not effectively

connected with the conduct of a trade or business in the United States. I agree to update this statement as required.

● A U.S. citizen or other U.S. person, including a resident alien individual W-9

Private foundation

Note: These entities should use Form W-8BEN if they are claiming treaty benefits or are providing the form only to

claim they are a foreign person exempt from backup withholding.

Note: See instructions for additional exceptions.

Grantor trust Complex trust Estate

Furthermore, I authorize this form to be provided to any withholding agent that has control, receipt, or custody of the income of which I am the beneficial owner or

any withholding agent that can disburse or make payments of the income of which I am the beneficial owner.

8 Reference number(s) (see instructions)

Printed on Recycled Paper
Department of the Treasury Instructions for Form Internal Revenue Service

W-8BEN

(Rev. February 2006)

Certificate of Foreign Status of Beneficial Owner for United States Tax

Withholding

• If applicable, claim a reduced rate of, or exemption General Instructions from, withholding as a resident of a foreign country with

Section references are to the Internal Revenue Code which the United States has an income tax treaty.

unless otherwise noted. You may also be required to submit Form W-8BEN to

For definitions of terms used throughout these claim an exception from domestic information reporting

instructions, see Definitions on pages 3 and 4. and backup withholding for certain types of income that

are not subject to foreign-person withholding. Such Purpose of form. Foreign persons are subject to U.S. income includes: tax at a 30% rate on income they receive from U.S. • Broker proceeds. sources that consists of: • Short-term (183 days or less) original issue discount

(OID). • Interest (including certain original issue discount • Bank deposit interest. (OID)); • Foreign source interest, dividends, rents, or royalties. • Dividends; • Proceeds from a wager placed by a nonresident alien • Rents; individual in the games of blackjack, baccarat, craps, • Royalties; roulette, or big-6 wheel. • Premiums;

• Annuities; You may also use Form W-8BEN to certify that income

• Compensation for, or in expectation of, services from a notional principal contract is not effectively

performed; connected with the conduct of a trade or business in the

• Substitute payments in a securities lending transaction; United States.

or A withholding agent or payer of the income may rely • Other fixed or determinable annual or periodical gains, on a properly completed Form W-8BEN to treat a profits, or income. payment associated with the Form W-8BEN as a

This tax is imposed on the gross amount paid and is payment to a foreign person who beneficially owns the

generally collected by withholding under section 1441 or amounts paid. If applicable, the withholding agent may

1442 on that amount. A payment is considered to have rely on the Form W-8BEN to apply a reduced rate of

been made whether it is made directly to the beneficial withholding at source.

owner or to another person, such as an intermediary, Provide Form W-8BEN to the withholding agent or agent, or partnership, for the benefit of the beneficial payer before income is paid or credited to you. Failure to

owner. provide a Form W-8BEN when requested may lead to

withholding at a 30% rate (foreign-person withholding) or In addition, section 1446 requires a partnership the backup withholding rate. conducting a trade or business in the United States to

withhold tax on a foreign partner’s distributive share of Additional information. For additional information and

the partnership’s effectively connected taxable income. instructions for the withholding agent, see the Instructions

Generally, a foreign person that is a partner in a for the Requester of Forms W-8BEN, W-8ECI, W-8EXP,

partnership that submits a Form W-8 for purposes of and W-8IMY.

section 1441 or 1442 will satisfy the documentation Who must file. You must give Form W-8BEN to the requirements under section 1446 as well. However, in withholding agent or payer if you are a foreign person some cases the documentation requirements of sections and you are the beneficial owner of an amount subject to 1441 and 1442 do not match the documentation withholding. Submit Form W-8BEN when requested by requirements of section 1446. See Regulations sections the withholding agent or payer whether or not you are 1.1446-1 through 1.1446-6. Further, the owner of a claiming a reduced rate of, or exemption from, disregarded entity, rather than the disregarded entity withholding. itself, shall submit the appropriate Form W-8 for purposes Do not use Form W-8BEN if: of section 1446. • You are a U.S. citizen (even if you reside outside the

If you receive certain types of income, you must United States) or other U.S. person (including a resident

provide Form W-8BEN to: alien individual). Instead, use Form W-9, Request for

• Establish that you are not a U.S. person; Taxpayer Identification Number and Certification.

• Claim that you are the beneficial owner of the income • You are a disregarded entity with a single owner that is

for which Form W-8BEN is being provided or a partner in a U.S. person and you are not a hybrid entity claiming

a partnership subject to section 1446; and treaty benefits. Instead, provide Form W-9.

Cat. No. 25576H
• You are a nonresident alien individual who claims W-8IMY and accompanying documentation. See

exemption from withholding on compensation for Regulations sections 1.1446-1 through 1.1446-6.

independent or dependent personal services performed Giving Form W-8BEN to the withholding agent. Do

in the United States. Instead, provide Form 8233, not send Form W-8BEN to the IRS. Instead, give it to the Exemption from Withholding on Compensation for person who is requesting it from you. Generally, this will Independent (and Certain Dependent) Personal Services be the person from whom you receive the payment, who of a Nonresident Alien Individual, or Form W-4, credits your account, or a partnership that allocates Employee’s Withholding Allowance Certificate. income to you. Give Form W-8BEN to the person

• You are receiving income that is effectively connected requesting it before the payment is made to you, credited

with the conduct of a trade or business in the United to your account or allocated. If you do not provide this

States, unless it is allocable to you through a partnership. form, the withholding agent may have to withhold at the

Instead, provide Form W-8ECI, Certificate of Foreign 30% rate, backup withholding rate, or the rate applicable

Person’s Claim That Income Is Effectively Connected under section 1446. If you receive more than one type of

With the Conduct of a Trade or Business in the United income from a single withholding agent for which you

States. If any of the income for which you have provided claim different benefits, the withholding agent may, at its

a Form W-8BEN becomes effectively connected, this is a option, require you to submit a Form W-8BEN for each

change in circumstances and Form W-8BEN is no longer different type of income. Generally, a separate Form

valid. You must file Form W-8ECI. See Change in W-8BEN must be given to each withholding agent.

circumstances on this page. Note. If you own the income or account jointly with

• You are filing for a foreign government, international one or more other persons, the income or account will be

organization, foreign central bank of issue, foreign treated by the withholding agent as owned by a foreign

tax-exempt organization, foreign private foundation, or person if Forms W-8BEN are provided by all of the

government of a U.S. possession claiming the owners. If the withholding agent receives a Form W-9

applicability of section 115(2), 501(c), 892, 895, or from any of the joint owners, the payment must be

1443(b). Instead, provide Form W-8EXP, Certificate of treated as made to a U.S. person.

Foreign Government or Other Foreign Organization for Change in circumstances. If a change in United States Tax Withholding. However, you should use circumstances makes any information on the Form Form W-8BEN if you are claiming treaty benefits or are W-8BEN you have submitted incorrect, you must notify providing the form only to claim you are a foreign person the withholding agent or payer within 30 days of the exempt from backup withholding. You should use Form change in circumstances and you must file a new Form W-8ECI if you received effectively connected income (for W-8BEN or other appropriate form. example, income from commercial activities). If you use Form W-8BEN to certify that you are a • You are a foreign flow-through entity, other than a foreign person, a change of address to an address in the hybrid entity, claiming treaty benefits. Instead, provide United States is a change in circumstances. Generally, a Form W-8IMY, Certificate of Foreign Intermediary, change of address within the same foreign country or to Foreign Flow-Through Entity, or Certain U.S. Branches another foreign country is not a change in circumstances. for United States Tax Withholding. However, if you are a However, if you use Form W-8BEN to claim treaty partner, beneficiary, or owner of a flow-through entity and benefits, a move to the United States or outside the you are not yourself a flow-through entity, you may be country where you have been claiming treaty benefits is a required to furnish a Form W-8BEN to the flow-through change in circumstances. In that case, you must notify entity. the withholding agent or payer within 30 days of the • You are a disregarded entity for purposes of section move.

1446. Instead, the owner of the entity must submit the If you become a U.S. citizen or resident alien after you form. submit Form W-8BEN, you are no longer subject to the • You are a reverse hybrid entity transmitting beneficial 30% withholding rate or the withholding tax on a foreign owner documentation provided by your interest holders to partner’s share of effectively connected income. You claim treaty benefits on their behalf. Instead, provide must notify the withholding agent or payer within 30 days Form W-8IMY. of becoming a U.S. citizen or resident alien. You may be • You are a withholding foreign partnership or a required to provide a Form W-9. For more information,

withholding foreign trust within the meaning of sections see Form W-9 and instructions.

1441 and 1442 and the accompanying regulations. A Expiration of Form W-8BEN. Generally, a Form withholding foreign partnership or a withholding foreign W-8BEN provided without a U.S. taxpayer identification trust is a foreign partnership or trust that has entered into number (TIN) will remain in effect for a period starting on a withholding agreement with the IRS under which it the date the form is signed and ending on the last day of agrees to assume primary withholding responsibility for the third succeeding calendar year, unless a change in each partner’s, beneficiary’s, or owner’s distributive share circumstances makes any information on the form of income subject to withholding that is paid to the incorrect. For example, a Form W-8BEN signed on partnership or trust. Instead, provide Form W-8IMY. September 30, 2005, remains valid through December • You are acting as an intermediary (that is, acting not 31, 2008. A Form W-8BEN furnished with a U.S. TIN will

for your own account, but for the account of others as an remain in effect until a change in circumstances makes agent, nominee, or custodian). Instead, provide Form any information on the form incorrect, provided that the W-8IMY. withholding agent reports on Form 1042-S at least one

• You are a foreign partnership or foreign grantor trust payment annually to the beneficial owner who provided

for purposes of section 1446. Instead, provide Form the Form W-8BEN. See the instructions for line 6

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beginning on page 4 for circumstances under which you test” for the calendar year is a resident alien. Any person

must provide a U.S. TIN. not meeting either test is a nonresident alien individual.

Additionally, an alien individual who is a resident of a

Definitions foreign country under the residence article of an income

tax treaty, or an alien individual who is a bona fide Beneficial owner. For payments other than those for resident of Puerto Rico, Guam, the Commonwealth of the which a reduced rate of withholding is claimed under an Northern Mariana Islands, the U.S. Virgin Islands, or income tax treaty, the beneficial owner of income is American Samoa is a nonresident alien individual. See generally the person who is required under U.S. tax Pub. 519, U.S. Tax Guide for Aliens, for more information principles to include the income in gross income on a tax on resident and nonresident alien status. return. A person is not a beneficial owner of income,

however, to the extent that person is receiving the Even though a nonresident alien individual income as a nominee, agent, or custodian, or to the married to a U.S. citizen or resident alien may extent the person is a conduit whose participation in a CAUTION choose to be treated as a resident alien for

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transaction is disregarded. In the case of amounts paid certain purposes (for example, filing a joint income tax that do not constitute income, beneficial ownership is return), such individual is still treated as a nonresident determined as if the payment were income. alien for withholding tax purposes on all income except

Foreign partnerships, foreign simple trusts, and foreign wages.

grantor trusts are not the beneficial owners of income Flow-through entity. A flow-through entity is a foreign paid to the partnership or trust. The beneficial owners of partnership (other than a withholding foreign partnership), income paid to a foreign partnership are generally the a foreign simple or foreign grantor trust (other than a partners in the partnership, provided that the partner is withholding foreign trust), or, for payments for which a not itself a partnership, foreign simple or grantor trust, reduced rate of withholding is claimed under an income nominee or other agent. The beneficial owners of income tax treaty, any entity to the extent the entity is considered paid to a foreign simple trust (that is, a foreign trust that is to be fiscally transparent (see below) with respect to the described in section 651(a)) are generally the payment by an interest holder’s jurisdiction. beneficiaries of the trust, if the beneficiary is not a foreign

partnership, foreign simple or grantor trust, nominee or For purposes of section 1446, a foreign partnership or

other agent. The beneficial owners of a foreign grantor foreign grantor trust must submit Form W-8IMY to

trust (that is, a foreign trust to the extent that all or a establish the partnership or grantor trust as a look

portion of the income of the trust is treated as owned by through entity. The Form W-8IMY may be accompanied

the grantor or another person under sections 671 through by this form or another version of Form W-8 or Form W-9

679) are the persons treated as the owners of the trust. to establish the foreign or domestic status of a partner or

The beneficial owners of income paid to a foreign grantor or other owner. See Regulations section

complex trust (that is, a foreign trust that is not a foreign 1.1446-1.

simple trust or foreign grantor trust) is the trust itself. Hybrid entity. A hybrid entity is any person (other than

For purposes of section 1446, the same beneficial an individual) that is treated as fiscally transparent (see

owner rules apply, except that under section 1446 a below) in the United States but is not treated as fiscally

foreign simple trust rather than the beneficiary provides transparent by a country with which the United States

the form to the partnership. has an income tax treaty. Hybrid entity status is relevant

for claiming treaty benefits. See the instructions for line The beneficial owner of income paid to a foreign 9c on page 5. estate is the estate itself.

Note. A payment to a U.S. partnership, U.S. trust, or Reverse hybrid entity. A reverse hybrid entity is any

U.S. estate is treated as a payment to a U.S. payee that person (other than an individual) that is not fiscally

transparent under U.S. tax law principles but that is is not subject to 30% withholding. A U.S. partnership, fiscally transparent under the laws of a jurisdiction with trust, or estate should provide the withholding agent with which the United States has an income tax treaty. See a Form W-9. For purposes of section 1446, a U.S. the instructions for line 9c on page 5. grantor trust or disregarded entity shall not provide the

withholding agent a Form W-9 in its own right. Rather, Fiscally transparent entity. An entity is treated as the grantor or other owner shall provide the withholding fiscally transparent with respect to an item of income for agent the appropriate form. which treaty benefits are claimed to the extent that the

Foreign person. A foreign person includes a interest holders in the entity must, on a current basis,

nonresident alien individual, a foreign corporation, a take into account separately their shares of an item of

foreign partnership, a foreign trust, a foreign estate, and income paid to the entity, whether or not distributed, and

any other person that is not a U.S. person. It also must determine the character of the items of income as if

includes a foreign branch or office of a U.S. financial they were realized directly from the sources from which

realized by the entity. For example, partnerships, institution or U.S. clearing organization if the foreign

branch is a qualified intermediary. Generally, a payment common trust funds, and simple trusts or grantor trusts

to a U.S. branch of a foreign person is a payment to a are generally considered to be fiscally transparent with

respect to items of income received by them. foreign person.

Nonresident alien individual. Any individual who is not Disregarded entity. A business entity that has a single

a citizen or resident alien of the United States is a owner and is not a corporation under Regulations section

nonresident alien individual. An alien individual meeting 301.7701-2(b) is disregarded as an entity separate from

either the “green card test” or the “substantial presence its owner.

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A disregarded entity shall not submit this form to a governed. If you are an individual, enter N/A (for “not

partnership for purposes of section 1446. Instead, the applicable”).

owner of such entity shall provide appropriate Line 3. Check the one box that applies. By checking a documentation. See Regulations section 1.1446-1. box, you are representing that you qualify for this

Amounts subject to withholding. Generally, an classification. You must check the box that represents

amount subject to withholding is an amount from sources your classification (for example, corporation, partnership,

within the United States that is fixed or determinable trust, estate, etc.) under U.S. tax principles. Do not check

annual or periodical (FDAP) income. FDAP income is all the box that describes your status under the law of the

income included in gross income, including interest (as treaty country. If you are a partnership or disregarded

well as OID), dividends, rents, royalties, and entity receiving a payment for which treaty benefits are

compensation. FDAP income does not include most being claimed, you must check the “Partnership” or

gains from the sale of property (including market discount “Disregarded entity” box. If you are a sole proprietor,

and option premiums). check the “Individual” box, not the “Disregarded entity”

box. For purposes of section 1446, the amount subject to

withholding is the foreign partner’s share of the Only entities that are tax-exempt under section

partnership’s effectively connected taxable income. 501 should check the “Tax-exempt organization” CAUTION box. Such organizations should use Form

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Withholding agent. Any person, U.S. or foreign, that W-8BEN only if they are claiming a reduced rate of has control, receipt, or custody of an amount subject to withholding under an income tax treaty or some code withholding or who can disburse or make payments of an exception other than section 501. Use Form W-8EXP if amount subject to withholding is a withholding agent. The you are claiming an exemption from withholding under withholding agent may be an individual, corporation, section 501. partnership, trust, association, or any other entity,

including (but not limited to) any foreign intermediary, Line 4. Your permanent residence address is the

address in the country where you claim to be a resident foreign partnership, and U.S. branches of certain foreign

banks and insurance companies. Generally, the person for purposes of that country’s income tax. If you are

who pays (or causes to be paid) the amount subject to giving Form W-8BEN to claim a reduced rate of

withholding to the foreign person (or to its agent) must withholding under an income tax treaty, you must

withhold. determine your residency in the manner required by the

treaty. Do not show the address of a financial institution, For purposes of section 1446, the withholding agent is a post office box, or an address used solely for mailing the partnership conducting the trade or business in the purposes. If you are an individual who does not have a United States. For a publicly traded partnership, the tax residence in any country, your permanent residence withholding agent may be the partnership, a nominee is where you normally reside. If you are not an individual holding an interest on behalf of a foreign person, or both. and you do not have a tax residence in any country, the See Regulations sections 1.1446-1 through 1.1446-6. permanent residence address is where you maintain your

principal office.

Line 5. Enter your mailing address only if it is different Specific Instructions from the address you show on line 4.

Line 6. If you are an individual, you are generally A hybrid entity should give Form W-8BEN to a required to enter your social security number (SSN). To withholding agent only for income for which it is apply for an SSN, get Form SS-5 from a Social Security claiming a reduced rate of withholding under an

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Administration (SSA) office or, if in the United States, you income tax treaty. A reverse hybrid entity should give may call the SSA at 1-800-772-1213. Fill in Form SS-5 Form W-8BEN to a withholding agent only for income for and return it to the SSA.

which no treaty benefit is being claimed. If you do not have an SSN and are not eligible to get

one, you must get an individual taxpayer identification Part I number (ITIN). To apply for an ITIN, file Form W-7 with

Line 1. Enter your name. If you are a disregarded entity the IRS. It usually takes 4-6 weeks to get an ITIN.

with a single owner who is a foreign person and you are An ITIN is for tax use only. It does not entitle you not claiming treaty benefits as a hybrid entity, this form to social security benefits or change your should be completed and signed by your foreign single CAUTION employment or immigration status under U.S. law.

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owner. If the account to which a payment is made or

credited is in the name of the disregarded entity, the If you are not an individual or you are an individual

foreign single owner should inform the withholding agent who is an employer or you are engaged in a U.S. trade or

of this fact. This may be done by including the name and business as a sole proprietor, you must enter an

account number of the disregarded entity on line 8 employer identification number (EIN). If you do not have

(reference number) of the form. However, if you are a an EIN, you should apply for one on Form SS-4,

disregarded entity that is claiming treaty benefits as a Application for Employer Identification Number. If you are

hybrid entity, this form should be completed and signed a disregarded entity claiming treaty benefits as a hybrid

by you. entity, enter your EIN.

Line 2. If you are a corporation, enter the country of A partner in a partnership conducting a trade or

incorporation. If you are another type of entity, enter the business in the United States will likely be allocated

country under whose laws you are created, organized, or effectively connected taxable income. The partner is

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required to file a U.S. federal income tax return and must • Meets the limitation on benefits provisions contained

have a U.S. taxpayer identification number (TIN). in the treaty, if any.

You must provide a U.S. TIN if you are: An item of income may be derived by either the entity

• Claiming an exemption from withholding under section receiving the item of income or by the interest holders in

871(f) for certain annuities received under qualified plans, the entity or, in certain circumstances, both. An item of

• A foreign grantor trust with 5 or fewer grantors, income paid to an entity is considered to be derived by

• Claiming benefits under an income tax treaty, or the entity only if the entity is not fiscally transparent under

• Submitting the form to a partnership that conducts a the laws of the entity’s jurisdiction with respect to the item

trade or business in the United States. of income. An item of income paid to an entity shall be

However, a U.S. TIN is not required to be shown in considered to be derived by the interest holder in the

entity only if: order to claim treaty benefits on the following items of • The interest holder is not fiscally transparent in its income:

jurisdiction with respect to the item of income, and • Dividends and interest from stocks and debt • The entity is considered to be fiscally transparent obligations that are actively traded; under the laws of the interest holder’s jurisdiction with • Dividends from any redeemable security issued by an respect to the item of income. An item of income paid investment company registered under the Investment

Company Act of 1940 (mutual fund); directly to a type of entity specifically identified in a treaty

as a resident of a treaty jurisdiction is treated as derived • Dividends, interest, or royalties from units of beneficial by a resident of that treaty jurisdiction. interest in a unit investment trust that are (or were upon

issuance) publicly offered and are registered with the If an entity is claiming treaty benefits on its own behalf,

SEC under the Securities Act of 1933; and it should complete Form W-8BEN. If an interest holder in

• Income related to loans of any of the above securities. an entity that is considered fiscally transparent in the

interest holder’s jurisdiction is claiming a treaty benefit, You may want to obtain and provide a U.S. TIN the interest holder should complete Form W-8BEN on its on Form W-8BEN even though it is not required. own behalf and the fiscally transparent entity should A Form W-8BEN containing a U.S. TIN remains

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associate the interest holder’s Form W-8BEN with a valid for as long as your status and the information Form W-8IMY completed by the entity. relevant to the certifications you make on the form remain

unchanged provided at least one payment is reported to An income tax treaty may not apply to reduce the

you annually on Form 1042-S. amount of any tax on an item of income received

Line 7. If your country of residence for tax purposes has CAUTION by an entity that is treated as a domestic

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issued you a tax identifying number, enter it here. For corporation for U.S. tax purposes. Therefore, neither the

example, if you are a resident of Canada, enter your domestic corporation nor its shareholders are entitled to

Social Insurance Number. the benefits of a reduction of U.S. income tax on an item

of income received from U.S. sources by the corporation. Line 8. This line may be used by the filer of Form

W-8BEN or by the withholding agent to whom it is To determine whether an entity meets the limitation on

provided to include any referencing information that is benefits provisions of a treaty, you must consult the

useful to the withholding agent in carrying out its specific provisions or articles under the treaties. Income

obligations. For example, withholding agents who are tax treaties are available on the IRS website at

required to associate the Form W-8BEN with a particular www.irs.gov.

Form W-8IMY may want to use line 8 for a referencing If you are an entity that derives the income as a number or code that will make the association clear. A resident of a treaty country, you may check this beneficial owner may use line 8 to include the number of box if the applicable income tax treaty does not

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the account for which he or she is providing the form. A contain a “limitation on benefits” provision. foreign single owner of a disregarded entity may use Line 9d. If you are a foreign corporation claiming treaty line 8 to inform the withholding agent that the account to

which a payment is made or credited is in the name of benefits under an income tax treaty that entered into

force before January 1, 1987 (and has not been the disregarded entity (see instructions for line 1 on page renegotiated) on (a) U.S. source dividends paid to you by 4). another foreign corporation or (b) U.S. source interest

Part II paid to you by a U.S. trade or business of another foreign

corporation, you must generally be a “qualified resident” Line 9a. Enter the country where you claim to be a of a treaty country. See section 884 for the definition of resident for income tax treaty purposes. For treaty interest paid by a U.S. trade or business of a foreign purposes, a person is a resident of a treaty country if the corporation (“branch interest”) and other applicable rules. person is a resident of that country under the terms of the In general, a foreign corporation is a qualified resident treaty. of a country if any of the following apply. Line 9b. If you are claiming benefits under an income • It meets a 50% ownership and base erosion test. tax treaty, you must have a U.S. TIN unless one of the • It is primarily and regularly traded on an established exceptions listed in the line 6 instructions above applies. securities market in its country of residence or the United

Line 9c. An entity (but not an individual) that is claiming States.

a reduced rate of withholding under an income tax treaty • It carries on an active trade or business in its country

must represent that it: of residence.

• Derives the item of income for which the treaty benefit • It gets a ruling from the IRS that it is a qualified

is claimed, and resident.

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See Regulations section 1.884-5 for the requirements fellowship income. See Compensation for Dependent

that must be met to satisfy each of these tests. Personal Services in the Instructions for Form 8233.

If you are claiming treaty benefits under an If you are a nonresident alien individual who

income tax treaty entered into force after received noncompensatory scholarship or CAUTION December 31, 1986, do not check box 9d. fellowship income and personal services income

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Instead, check box 9c. (including compensatory scholarship or fellowship

Line 9e. Check this box if you are related to the income) from the same withholding agent, you may use

withholding agent within the meaning of section 267(b) or Form 8233 to claim a tax treaty withholding exemption for

707(b) and the aggregate amount subject to withholding part or all of both types of income.

received during the calendar year will exceed $500,000. Completing lines 4 and 9a. Most tax treaties that

Additionally, you must file Form 8833, Treaty-Based contain an article exempting scholarship or fellowship Return Position Disclosure Under Section 6114 or grant income from taxation require that the recipient be a 7701(b). resident of the other treaty country at the time of, or

immediately prior to, entry into the United States. Thus, a Line 10 student or researcher may claim the exemption even if he Line 10 must be used only if you are claiming treaty or she no longer has a permanent address in the other benefits that require that you meet conditions not covered treaty country after entry into the United States. If this is by the representations you make in lines 9a through 9e. the case, you may provide a U.S. address on line 4 and However, this line should always be completed by foreign still be eligible for the exemption if all other conditions students and researchers claiming treaty benefits. See required by the tax treaty are met. You must also identify Scholarship and fellowship grants below for more on line 9a the tax treaty country of which you were a information. resident at the time of, or immediately prior to, your entry

The following are additional examples of persons who into the United States.

should complete this line. Completing line 10. You must complete line 10 if you • Exempt organizations claiming treaty benefits under are a student or researcher claiming an exemption from the exempt organization articles of the treaties with taxation on your scholarship or fellowship grant income Canada, Mexico, Germany, and the Netherlands. under a tax treaty. • Foreign corporations that are claiming a preferential Nonresident alien student or researcher who rate applicable to dividends based on ownership of a becomes a resident alien. You must use Form W-9 to specific percentage of stock. claim an exception to a saving clause. See Nonresident • Persons claiming treaty benefits on royalties if the alien who becomes a resident alien on this page for a treaty contains different withholding rates for different general explanation of saving clauses and exceptions to types of royalties. them. This line is generally not applicable to claiming treaty Example. Article 20 of the U.S.-China income tax benefits under an interest or dividends (other than treaty allows an exemption from tax for scholarship dividends subject to a preferential rate based on income received by a Chinese student temporarily ownership) article of a treaty. present in the United States. Under U.S. law, this student Nonresident alien who becomes a resident alien. will become a resident alien for tax purposes if his or her Generally, only a nonresident alien individual may use stay in the United States exceeds 5 calendar years. the terms of a tax treaty to reduce or eliminate U.S. tax However, paragraph 2 of the first protocol to the on certain types of income. However, most tax treaties U.S.-China treaty (dated April 30, 1984) allows the contain a provision known as a “saving clause.” provisions of Article 20 to continue to apply even after the Exceptions specified in the saving clause may permit an Chinese student becomes a resident alien of the United exemption from tax to continue for certain types of States. A Chinese student who qualifies for this exception income even after the recipient has otherwise become a (under paragraph 2 of the first protocol) and is relying on U.S. resident alien for tax purposes. The individual must this exception to claim an exemption from tax on his or use Form W-9 to claim the tax treaty benefit. See the her scholarship or fellowship income would complete instructions for Form W-9 for more information. Also see Form W-9. Nonresident alien student or researcher who becomes a

resident alien later for an example. Part III Scholarship and fellowship grants. A nonresident If you check this box, you must provide the withholding alien student (including a trainee or business apprentice) agent with the required statement for income from a or researcher who receives noncompensatory notional principal contract that is to be treated as income scholarship or fellowship income may use Form W-8BEN not effectively connected with the conduct of a trade or to claim benefits under a tax treaty that apply to reduce business in the United States. You should update this or eliminate U.S. tax on such income. No Form W-8BEN statement as often as necessary. A new Form W-8BEN is required unless a treaty benefit is being claimed. A

nonresident alien student or researcher who receives is not required for each update provided the form

otherwise remains valid. compensatory scholarship or fellowship income must use

Form 8233 to claim any benefits of a tax treaty that apply

to that income. The student or researcher must use Form Part IV

W-4 for any part of such income for which he or she is Form W-8BEN must be signed and dated by the

not claiming a tax treaty withholding exemption. Do not beneficial owner of the income, or, if the beneficial owner

use Form W-8BEN for compensatory scholarship or is not an individual, by an authorized representative or

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officer of the beneficial owner. If Form W-8BEN is information. We need it to ensure that you are complying

completed by an agent acting under a duly authorized with these laws and to allow us to figure and collect the

power of attorney, the form must be accompanied by the right amount of tax.

power of attorney in proper form or a copy thereof You are not required to provide the information specifically authorizing the agent to represent the requested on a form that is subject to the Paperwork principal in making, executing, and presenting the form. Reduction Act unless the form displays a valid OMB Form 2848, Power of Attorney and Declaration of control number. Books or records relating to a form or its Representative, may be used for this purpose. The instructions must be retained as long as their contents agent, as well as the beneficial owner, may incur liability may become material in the administration of any Internal for the penalties provided for an erroneous, false, or Revenue law. Generally, tax returns and return fraudulent form. information are confidential, as required by section 6103.

Broker transactions or barter exchanges. Income The time needed to complete and file this form will from transactions with a broker or a barter exchange is vary depending on individual circumstances. The subject to reporting rules and backup withholding unless estimated average time is: Recordkeeping, 5 hr., Form W-8BEN or a substitute form is filed to notify the 58 min.; Learning about the law or the form, 3 hr., broker or barter exchange that you are an exempt foreign 46 min.; Preparing and sending the form to IRS, 4 hr.,

person. 2 min.

You are an exempt foreign person for a calendar year If you have comments concerning the accuracy of in which: these time estimates or suggestions for making this form • You are a nonresident alien individual or a foreign simpler, we would be happy to hear from you. You can corporation, partnership, estate, or trust; email us at *taxforms@irs.gov. Please put “Forms • You are an individual who has not been, and does not Comment” on the subject line. Or you can write to plan to be, present in the United States for a total of 183 Internal Revenue Service, Tax Products Coordinating days or more during the calendar year; and Committee, SE:W:CAR:MP:T:T:SP, 1111 Constitution • You are neither engaged, nor plan to be engaged Ave. NW, IR-6406, Washington, DC 20224. Do not send during the year, in a U.S. trade or business that has Form W-8BEN to this office. Instead, give it to your effectively connected gains from transactions with a withholding agent. broker or barter exchange.

Paperwork Reduction Act Notice. We ask for the

information on this form to carry out the Internal Revenue

laws of the United States. You are required to provide the

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Form W-8ECI

(Rev. February 2006)

Department of the Treasury

Internal Revenue Service

Certificate of Foreign Person’s Claim That Income Is

Effectively Connected With the Conduct of a Trade or

Business in the United States

Section references are to the Internal Revenue Code. See separate instructions.

Give this form to the withholding agent or payer. Do not send to the IRS.

OMB No. 1545-1621

Part I

Part II

Identification of Beneficial Owner (See instructions.)

1 2

3

4

5

6 7

8

Name of individual or organization that is the beneficial owner Country of incorporation or organization

Permanent residence address (street, apt. or suite no., or rural route). Do not use a P.O. box.

City or town, state or province. Include postal code where appropriate. Country (do not abbreviate)

U.S. taxpayer identification number (required—see instructions) Foreign tax identifying number, if any (optional)

Reference number(s) (see instructions)

Type of entity (check the appropriate box): Individual Corporation

Business address in the United States (street, apt. or suite no., or rural route). Do not use a P.O. box.

City or town, state, and ZIP code

Certification

Under penalties of perjury, I declare that I have examined the information on this form and to the best of my knowledge and belief it is true, correct,

and complete. I further certify under penalties of perjury that:

● I am the beneficial owner (or I am authorized to sign for the beneficial owner) of all the income to which this form relates,

● The amounts for which this certification is provided are effectively connected with the conduct of a trade or business in the United States Sign and are includible in my gross income (or the beneficial owner’s gross income) for the taxable year, and

Here

Signature of beneficial owner (or individual authorized to sign for the beneficial owner) Date (MM-DD-YYYY)

For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 25045D Form W-8ECI (Rev. 2-2006)

Disregarded entity

Partnership Simple trust

Government

International organization

9 Specify each item of income that is, or is expected to be, received from the payer that is effectively connected with the conduct of a trade

or business in the United States (attach statement if necessary)

Note: Persons submitting this form must file an annual U.S. income tax return to report income claimed to be effectively

connected with a U.S. trade or business (see instructions).

SSN or ITIN EIN

Capacity in which acting

Complex trust

Do not use this form for:

● A beneficial owner solely claiming foreign status or treaty benefits

● A foreign partnership or a foreign trust (unless claiming an exemption from U.S. withholding on income effectively

connected with the conduct of a trade or business in the United States)

● A foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private

foundation, or government of a U.S. possession claiming the applicability of section(s) 115(2), 501(c), 892, 895, or 1443(b)

● A person acting as an intermediary

Instead, use Form:

W-8BEN

W-8EXP

W-8BEN or W-8IMY

W-8IMY

● The beneficial owner is not a U.S. person.

Note: See instructions for additional exceptions.

Private foundation

Central bank of issue Tax-exempt organization

Estate

Note: These entities should use Form W-8ECI if they received effectively connected income (e.g., income from commercial activities).

Furthermore, I authorize this form to be provided to any withholding agent that has control, receipt, or custody of the income of which I am the

beneficial owner or any withholding agent that can disburse or make payments of the income of which I am the beneficial owner.

Grantor trust
Department of the Treasury Instructions for Form Internal Revenue Service

W-8ECI

(Rev. February 2006)

Certificate of Foreign Person’s Claim That Income Is Effectively Connected With

the Conduct of a Trade or Business in the United States

General Instructions Provide Form W-8ECI to the withholding agent or

payer before income is paid, credited, or allocated to you. Section references are to the Internal Revenue Code Failure by a beneficial owner to provide a Form W-8ECI unless otherwise noted. when requested may lead to withholding at the 30% rate

Note. For definitions of terms used throughout these or the backup withholding rate.

instructions, see Definitions beginning on page 2. Additional information. For additional information and

Purpose of form. Foreign persons are generally subject instructions for the withholding agent, see the Instructions

to U.S. tax at a 30% rate on income they receive from for the Requester of Forms W-8BEN, W-8ECI, W-8EXP,

U.S. sources. However, no withholding under section and W-8IMY.

1441 or 1442 is required on income that is, or is deemed Who must file. You must give Form W-8ECI to the to be, effectively connected with the conduct of a trade or withholding agent or payer if you are a foreign person business in the United States and is includible in the and you are the beneficial owner of U.S. source income beneficial owner’s gross income for the tax year. that is (or is deemed to be) effectively connected with the The no withholding rule does not apply to personal conduct of a trade or business within the United States.

services income and income subject to withholding under

section 1445 (dispositions of U.S. real property interests) Do not use Form W-8ECI if:

or section 1446 (foreign partner’s share of effectively • You are a nonresident alien individual who claims

connected income). exemption from withholding on compensation for

independent or certain dependent personal services If you receive effectively connected income from performed in the United States. Instead, provide Form sources in the United States, you must provide Form 8233, Exemption from Withholding on Compensation for W-8ECI to: Independent (and Certain Dependent) Personal Services • Establish that you are not a U.S. person, of a Nonresident Alien Individual, or Form W-4, • Claim that you are the beneficial owner of the income Employee’s Withholding Allowance Certificate. for which Form W-8ECI is being provided, and • You are claiming an exemption from withholding under • Claim that the income is effectively connected with the section 1441 or 1442 for a reason other than a claim that conduct of a trade or business in the United States. the income is effectively connected with the conduct of a If you expect to receive both income that is effectively trade or business in the United States. For example, if connected and income that is not effectively connected you are a foreign person and the beneficial owner of U.S. from a withholding agent, you must provide Form W-8ECI source income that is not effectively connected with a for the effectively connected income and Form W-8BEN U.S. trade or business and are claiming a reduced rate of (or Form W-8EXP or Form W-8IMY) for income that is withholding as a resident of a foreign country with which not effectively connected. the United States has an income tax treaty in effect, do

not use this form. Instead, provide Form W-8BEN, If you submit this form to a partnership, the income Certificate of Foreign Status of Beneficial Owner for claimed to be effectively connected with the conduct of a

U.S. trade or business is subject to withholding under United States Tax Withholding.

section 1446. If a nominee holds an interest in a • You are a foreign person receiving proceeds from the

partnership on your behalf, you, not the nominee, must disposition of a U.S. real property interest. Instead, see

Form 8288-B, Application for Withholding Certificate for submit the form to the partnership or nominee that is the

withholding agent. Dispositions by Foreign Persons of U.S. Real Property

Interests. If you are a foreign partnership, a foreign simple trust, • You are filing for a foreign government, international or a foreign grantor trust with effectively connected organization, foreign central bank of issue, foreign income, you may submit Form W-8ECI without attaching tax-exempt organization, foreign private foundation, or Forms W-8BEN or other documentation for your foreign government of a U.S. possession claiming the partners, beneficiaries, or owners. applicability of section 115(2), 501(c), 892, 895, or

A withholding agent or payer of the income may rely 1443(b). Instead, provide Form W-8EXP, Certificate of

on a properly completed Form W-8ECI to treat the Foreign Government or Other Foreign Organization for

payment associated with the Form W-8ECI as a payment United States Tax Withholding. However, these entities

to a foreign person who beneficially owns the amounts should use Form W-8BEN if they are claiming treaty

paid and is either entitled to an exemption from benefits or are providing the form only to claim exempt

withholding under sections 1441 or 1442 because the recipient status for backup withholding purposes. They

income is effectively connected with the conduct of a should use Form W-8ECI if they received effectively

trade or business in the United States or subject to connected income (for example, income from commercial

withholding under section 1446. activities).

Cat. No. 25902V
• You are acting as an intermediary (that is, acting not Expiration of Form W-8ECI. Generally, a Form W-8ECI

for your own account or for that of your partners, but for will remain in effect for a period starting on the date the

the account of others as an agent, nominee, or form is signed and ending on the last day of the third

custodian). Instead, provide Form W-8IMY, Certificate of succeeding calendar year, unless a change in

Foreign Intermediary, Foreign Flow-Through Entity, or circumstances makes any information on the form

Certain U.S. Branches for United States Tax Withholding. incorrect. For example, a Form W-8ECI signed on

• You are a withholding foreign partnership or a September 30, 2005, remains valid through December

withholding foreign trust for purposes of sections 1441 31, 2008. Upon the expiration of the 3-year period, you

and 1442. A withholding foreign partnership is, generally, must provide a new Form W-8ECI.

a foreign partnership that has entered into a withholding

agreement with the IRS under which it agrees to assume Definitions

primary withholding responsibility for each partner’s Beneficial owner. For payments other than those for distributive share of income subject to withholding that is which a reduced rate of withholding is claimed under an paid to the partnership. A withholding foreign trust is, income tax treaty, the beneficial owner of income is generally, a foreign simple trust or a foreign grantor trust generally the person who is required under U.S. tax that has entered into a withholding agreement with the principles to include the income in gross income on a tax IRS under which it agrees to assume primary withholding return. A person is not a beneficial owner of income, responsibility for each beneficiary’s or owner’s distributive however, to the extent that person is receiving the share of income subject to withholding that is paid to the income as a nominee, agent, or custodian, or to the trust. Instead, provide Form W-8IMY. extent the person is a conduit whose participation in a • You are a foreign corporation that is a personal holding transaction is disregarded. In the case of amounts paid company receiving compensation described in section that do not constitute income, beneficial ownership is 543(a)(7). Such compensation is not exempt from determined as if the payment were income. withholding as effectively connected income, but may be Foreign partnerships, foreign simple trusts, and foreign exempt from withholding on another basis. grantor trusts are not the beneficial owners of income • You are a foreign partner in a partnership and the paid to the partnership or trust. The beneficial owners of income allocated to you from the partnership is effectively income paid to a foreign partnership are generally the connected with the conduct of the partnership’s trade or partners in the partnership, provided that the partner is business in the United States. Instead, provide Form

W-8BEN. However, if you made or will make an election not itself a partnership, foreign simple or grantor trust,

nominee or other agent. The beneficial owners of income under section 871(d) or 882(d), provide Form W-8ECI. In paid to a foreign simple trust (that is, a foreign trust that is addition, if you are otherwise engaged in a trade or described in section 651(a)) are generally the business in the United States and you want your beneficiaries of the trust, if the beneficiary is not a foreign allocable share of income from the partnership to be partnership, foreign simple or grantor trust, nominee or subject to withholding under section 1446, provide Form

W-8ECI. other agent. The beneficial owners of a foreign grantor

trust (that is, a foreign trust to the extent that all or a

Giving Form W-8ECI to the withholding agent. Do not portion of the income of the trust is treated as owned by

send Form W-8ECI to the IRS. Instead, give it to the the grantor or another person under sections 671 through

person who is requesting it from you. Generally, this will 679) are the persons treated as the owners of the trust.

be the person from whom you receive the payment, who The beneficial owners of income paid to a foreign

credits your account, or a partnership that allocates complex trust (that is, a foreign trust that is not a foreign

income to you. Give Form W-8ECI to the person simple trust or foreign grantor trust) is the trust itself.

requesting it before the payment is made, credited, or Generally, these beneficial owner rules apply for allocated. If you do not provide this form, the withholding purposes of sections 1441, 1442, and 1446, except that agent may have to withhold at the 30% rate or the section 1446 requires a foreign simple trust to provide a backup withholding rate. A separate Form W-8ECI must Form W-8 on its own behalf rather than on behalf of the be given to each withholding agent. beneficiary of such trust.

U.S. branch of foreign bank or insurance company. A The beneficial owner of income paid to a foreign payment to a U.S. branch of a foreign bank or a foreign estate is the estate itself.

insurance company that is subject to U.S. regulation by A payment to a U.S. partnership, U.S. trust, or U.S. the Federal Reserve Board or state insurance authorities estate is treated as a payment to a U.S. payee. A U.S. is presumed to be effectively connected with the conduct partnership, trust, or estate should provide the of a trade or business in the United States unless the withholding agent with a Form W-9. However, for branch provides a withholding agent with a Form

W-8BEN or Form W-8IMY for the income. purposes of section 1446, a U.S. grantor trust shall not

provide the withholding agent a Form W-9. Instead, the

Change in circumstances. If a change in grantor or other owner must provide Form W-8 or Form

circumstances makes any information on the Form W-9 as appropriate.

W-8ECI you have submitted incorrect, you must notify Disregarded entity. A business entity that has a single the withholding agent or payer within 30 days of the owner and is not a corporation under Regulations section change in circumstances and you must file a new Form

W-8ECI or other appropriate form. For example, if during 301.7701-2(b) is disregarded as an entity separate from

its owner. the tax year any part or all of the income is no longer

effectively connected with the conduct of a trade or A disregarded entity shall not submit this form to a

business in the United States, your Form W-8ECI is no partnership for purposes of section 1446. Instead, the

longer valid. You must notify the withholding agent and owner of such entity shall provide appropriate

provide Form W-8BEN, W-8EXP, or W-8IMY. documentation. See Regulations section 1.1446-1.

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Effectively connected income. Generally, when a withholding or who can disburse or make payments of an

foreign person engages in a trade or business in the amount subject to withholding is a withholding agent. The

United States, all income from sources in the United withholding agent may be an individual, corporation,

States other than fixed or determinable annual or partnership, trust, association, or any other entity

periodical (FDAP) income (for example, interest, including (but not limited to) any foreign intermediary,

dividends, rents, and certain similar amounts) is foreign partnership, and U.S. branches of certain foreign

considered income effectively connected with a U.S. banks and insurance companies. Generally, the person

trade or business. FDAP income may or may not be who pays (or causes to be paid) an amount subject to

effectively connected with a U.S. trade or business. withholding to the foreign person (or to its agent) must

Factors to be considered to determine whether FDAP withhold.

income and similar amounts from U.S. sources are

effectively connected with a U.S. trade or business

include whether:

• The income is from assets used in, or held for use in, Specific Instructions

the conduct of that trade or business, or

• The activities of that trade or business were a material Part I

factor in the realization of the income. Line 1. Enter your name. If you are filing for a There are special rules for determining whether disregarded entity with a single owner who is a foreign income from securities is effectively connected with the person, this form should be completed and signed by the active conduct of a U.S. banking, financing, or similar foreign single owner. If the account to which a payment is business. See section 864(c)(4)(B)(ii) and Regulations made or credited is in the name of the disregarded entity, section 1.864-4(c)(5)(ii) for more information. the foreign single owner should inform the withholding

Effectively connected income, after allowable agent of this fact. This may be done by including the

deductions, is taxed at graduated rates applicable to U.S. name and account number of the disregarded entity on

citizens and resident aliens, rather than at the 30% rate. line 8 (reference number) of Part I of the form.

You must report this income on your annual U.S. income If you own the income or account jointly with one tax or information return.

or more other persons, the income or account will A partnership that has effectively connected income be treated by the withholding agent as owned by

TIP

allocable to foreign partners is generally required to a foreign person if Forms W-8ECI are provided by all of withhold tax under section 1446. The withholding tax rate the owners. If the withholding agent receives a Form on a partner’s share of effectively connected income is W-9, Request for Taxpayer Identification Number and 35%. In certain circumstances the partnership may Certification, from any of the joint owners, the payment withhold tax at the highest applicable rate to a particular must be treated as made to a U.S. person. type of income (for example long-term capital gain

allocated to a noncorporate partner). Any amount Line 2. If you are filing for a corporation, enter the

withheld under section 1446 on your behalf, and reflected country of incorporation. If you are filing for another type

on Form 8805 issued by the partnership to you may be of entity, enter the country under whose laws the entity is

credited on your U.S. income tax return. created, organized, or governed. If you are an individual,

write “N/A” (for “not applicable”). Foreign person. A foreign person includes a

nonresident alien individual, a foreign corporation, a Line 3. Check the box that applies. By checking a box,

foreign partnership, a foreign trust, a foreign estate, and you are representing that you qualify for this

any other person that is not a U.S. person. classification. You must check the one box that

Nonresident alien individual. Any individual who is not represents your classification (for example, corporation,

a citizen or resident alien of the United States is a partnership, etc.) under U.S. tax principles. If you are

nonresident alien individual. An alien individual meeting filing for a disregarded entity, you must check the

either the “green card test” or the “substantial presence “Disregarded entity” box (not the box that describes the

status of your single owner). test” for the calendar year is a resident alien. Any person

not meeting either test is a nonresident alien individual. Line 4. Your permanent residence address is the Additionally, an alien individual who is a resident of a address in the country where you claim to be a resident foreign country under the residence article of an income for that country’s income tax. Do not show the address of tax treaty, or an alien individual who is a bona fide a financial institution, a post office box, or an address resident of Puerto Rico, Guam, the Commonwealth of the used solely for mailing purposes. If you are an individual Northern Mariana Islands, the U.S. Virgin Islands, or who does not have a tax residence in any country, your American Samoa is a nonresident alien individual. permanent residence is where you normally reside. If you

are not an individual and you do not have a tax residence Even though a nonresident alien individual

married to a U.S. citizen or resident alien may in any country, the permanent residence address is

where you maintain your principal office. CAUTION choose to be treated as a resident alien for

!

certain purposes (for example, filing a joint income tax Line 5. Enter your business address in the United return), such individual is still treated as a nonresident States. Do not show a post office box. alien for withholding tax purposes on all income except

wages. Line 6. You must provide a U.S. taxpayer identification

number (TIN) for this form to be valid. A U.S. TIN is a See Pub. 519, U.S. Tax Guide for Aliens, for more social security number (SSN), employer identification information on resident and nonresident alien status. number (EIN), or IRS individual taxpayer identification

Withholding agent. Any person, U.S. or foreign, that number (ITIN). Check the appropriate box for the type of

has control, receipt, or custody of an amount subject to U.S. TIN you are providing.

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If you are an individual, you are generally required to owner is not an individual, by an authorized

enter your SSN. To apply for an SSN, get Form SS-5 representative or officer of the beneficial owner. If Form

from a Social Security Administration (SSA) office. Fill in W-8ECI is completed by an agent acting under a duly

Form SS-5 and return it to the SSA. authorized power of attorney, the form must be

If you do not have an SSN and are not eligible to get accompanied by the power of attorney in proper form or a

one, you must get an ITIN. To apply for an ITIN, file Form copy thereof specifically authorizing the agent to

W-7 with the IRS. It usually takes 4-6 weeks to get an represent the principal in making, executing, and

ITIN. presenting the form. Form 2848, Power of Attorney and

Declaration of Representative, may be used for this If you are not an individual (for example, a foreign purpose. The agent, as well as the beneficial owner, may estate or trust), or you are an individual who is an incur liability for the penalties provided for an erroneous, employer or who is engaged in a U.S. trade or business false, or fraudulent form. as a sole proprietor, use Form SS-4, Application for

Employer Identification Number, to obtain an EIN. If you

are a disregarded entity, enter the U.S. TIN of your Paperwork Reduction Act Notice. We ask for the

foreign single owner. information on this form to carry out the Internal Revenue

Line 7. If your country of residence for tax purposes has laws of the United States. If you want to receive

issued you a tax identifying number, enter it here. For exemption from withholding on income effectively

example, if you are a resident of Canada, enter your connected with the conduct of a trade or business in the

Social Insurance Number. United States, you are required to provide the

information. We need it to ensure that you are complying Line 8. This line may be used by the filer of Form

W-8ECI or by the withholding agent to whom it is with these laws and to allow us to figure and collect the

right amount of tax. provided to include any referencing information that is

useful to the withholding agent in carrying out its You are not required to provide the information

obligations. A beneficial owner may use line 8 to include requested on a form that is subject to the Paperwork

the name and number of the account for which he or she Reduction Act unless the form displays a valid OMB

is providing the form. A foreign single owner of a control number. Books or records relating to a form or its

disregarded entity may use line 8 to inform the instructions must be retained as long as their contents

withholding agent that the account to which a payment is may become material in the administration of any Internal

made or credited is in the name of the disregarded entity Revenue law. Generally, tax returns and return

(see instructions for line 1 on page 3). information are confidential, as required by section 6103.

Line 9. You must specify the items of income that are The time needed to complete and file this form will

effectively connected with the conduct of a trade or vary depending on individual circumstances. The

business in the United States. You will generally have to estimated average time is: Recordkeeping, 3 hr., 35

provide Form W-8BEN, Form W-8EXP, or Form W-8IMY min.; Learning about the law or the form, 3 hr., 22

for those items from U.S. sources that are not effectively min.; Preparing the form, 3 hr., 35 min.

connected with the conduct of a trade or business in the If you have comments concerning the accuracy of United States. See Form W-8BEN, W-8EXP, or W-8IMY, these time estimates or suggestions for making this form and its instructions, for more details. simpler, we would be happy to hear from you. You can

If you are providing this form to a partnership because email us at *taxforms@irs.gov. Please put “Forms

you are a partner and have made an election under Comment” on the subject line. Or you can write to

section 871(d) or section 882(d), attach a copy of the Internal Revenue Service, Tax Products Coordinating

election to the form. If you have not made the election, Committee, SE:W:CAR:MP:T:T:SP, 1111 Constitution

but intend to do so effective for the current tax year, Ave. NW, IR-6406, Washington, DC 20224. Do not send

attach a statement to the form indicating your intent. See Form W-8ECI to this office. Instead, give it to your

Regulations section 1.871-10(d)(3). withholding agent.

Part II

Signature. Form W-8ECI must be signed and dated by

the beneficial owner of the income, or, if the beneficial

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Certificate of Foreign Government or Other Foreign

Form W-8EXP Organization for United States Tax Withholding

OMB No. 1545-1621

(Rev. February 2006) (For use by foreign governments, international organizations, foreign central banks of

issue, foreign tax-exempt organizations, foreign private foundations, and governments of

U.S. possessions.)

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code.

Country (do not abbreviate)

Identification of Beneficial Owner (See instructions before completing this part.)

Mailing address (if different from above)

Qualification Statement

Part I

Part II

Name of organization

Permanent address (street, apt. or suite no., or rural route). Do not use a P.O. box.

Reference number(s) (see instructions)

City or town, state or province. Include postal code where appropriate.

Do not use this form for:

City or town, state or province. Include postal or ZIP code where appropriate.

U.S. taxpayer identification number, if required (see instructions)

1

4

5

6 7

8

Country (do not abbreviate)

Foreign tax identifying number, if any (optional)

Type of

entity

3 Foreign government International organization Foreign tax-exempt organization Foreign central bank of issue

(not wholly owned by the

foreign sovereign)

I certify that the entity identified in Part I is a foreign government within the meaning of section 892 and the payments

are within the scope of the exemption granted by section 892.

The entity identified in Part I is an integral part of the government of .

The entity identified in Part I is a controlled entity of the government of .

I certify that:

● The entity identified in Part I is a foreign central bank of issue,

● The entity identified in Part I does not hold obligations or bank deposits to which this form relates for use in

connection with the conduct of a commercial banking function or other commercial activity, and

● The payments are within the scope of the exemption granted by section 895.

For an international organization:

For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 25401F Form W-8EXP (Rev. 2-2006)

See separate instructions.

Give this form to the withholding agent or payer. Do not send to the IRS.

9 For a foreign government:

For a foreign central bank of issue (not wholly owned by the foreign sovereign):

10

I certify that:

● The entity identified in Part I is an international organization within the meaning of section 7701(a)(18) and

● The payments are within the scope of the exemption granted by section 892.

11

Check box 9b or box 9c, whichever applies:

2 Country of incorporation or organization

● Any foreign government or other foreign organization that is not claiming the applicability of section(s) 115(2), 501(c),

892, 895, or 1443(b)

● A beneficial owner solely claiming foreign status or treaty benefits

● A foreign partnership or a foreign trust

● A person claimimg that income is effectively connected with the conduct of a trade or business in the United States

● A person acting as an intermediary

Instead, use Form:

W-8BEN or W-8ECI

W-8BEN

W-8BEN or W-8IMY

W-8ECI

W-8IMY

(Part II and required certification continued on page 2)

a

c

Government of a U.S. possession Foreign private foundation

b
For a foreign tax-exempt organization, including foreign private foundations:

Check either box 12a or box 12b:

a I certify that the entity identified in Part I has been issued a determination letter by the IRS dated

that is currently in effect and that concludes that it is an exempt organization described in section 501(c).

b I have attached to this form an opinion from U.S. counsel concluding that the entity identified in Part I is described in

section 501(c).

If the determination letter or opinion of counsel concludes that the entity identified in Part I is described in section

501(c)(3), I certify that the organization is not a private foundation described in section 509. I have attached an affidavit

of the organization setting forth sufficient facts for the IRS to determine that the organization is not a private foundation

because it meets one of the exceptions described in section 509(a)(1), (2), (3), or (4).

c

If the determination letter or opinion of counsel concludes that the entity identified in Part I is described in section

501(c)(3), I certify that the organization is a private foundation described in section 509.

For section 501(c)(3) organizations only, check either box 12c or box 12d:

d

12

If any of the income to which this certification relates constitutes income includible under section 512 in computing the

entity’s unrelated business taxable income, attach a statement identifying the amounts.

Under penalties of perjury, I declare that I have examined the information on this form and to the best of my knowledge and

belief it is true, correct, and complete. I further certify under penalties of perjury that:

Certification

● The organization for which I am signing is the beneficial owner of the income to which this form relates,

● The beneficial owner is not a U.S. person,

Sign

Here

Signature of authorized official Date (MM-DD-YYYY)

Part III

Capacity in which acting

● For a beneficial owner that is a controlled entity of a foreign sovereign (other than a central bank of issue wholly owned by

a foreign sovereign), the beneficial owner is not engaged in commercial activities within or outside the United States, and

● For a beneficial owner that is a central bank of issue wholly owned by a foreign sovereign, the beneficial owner is not

engaged in commercial activities within the United States.

Form W-8EXP (Rev. 2-2006) Page 2

Part II Qualification Statement (continued)

13 For a government of a U.S. possession:

Furthermore, I authorize this form to be provided to any withholding agent that has control, receipt, or custody of the income

of which I am the beneficial owner or any withholding agent that can disburse or make payments of the income of which I

am the beneficial owner.

I certify that the entity identified in Part I is a government of a possession of the United States, or is a political

subdivision thereof, and is claiming the exemption granted by section 115(2).
Department of the Treasury Instructions for Form Internal Revenue Service

W-8EXP

(Rev. February 2006)

Certificate of Foreign Government or Other Foreign Organization for United States

Tax Withholding

General Instructions sections 1441 and 1442. See Temporary Regulations

section 1.892-3T. In addition, certain distributions to a

Section references are to the Internal Revenue Code foreign government from a real estate investment trust unless otherwise noted. (REIT) may not be eligible for relief from withholding and

Note. For definitions of terms used throughout these may be subject to withholding at 35% of the gain

instructions, see Definitions on pages 2 and 3. realized. For the definition of “commercial activities,” see

Temporary Regulations section 1.892-4T. Purpose of form. Foreign persons are subject to U.S.

tax at a 30% rate on income they receive from U.S. Amounts allocable to a foreign person from a

sources that consists of interest (including certain original partnership’s trade or business in the United States are

issue discount (OID)), dividends, rents, premiums, considered derived from a commercial activity in the

annuities, compensation for, or in expectation of, services United States. The partnership’s net effectively

performed, or other fixed or determinable annual or connected taxable income is subject to withholding under

periodical gains, profits, or income. This tax is imposed section 1446.

on the gross amount paid and is generally collected by In general, payments to an international organization withholding under section 1441 or 1442 on that amount. from investment in the United States in stocks, bonds

A payment is considered to have been made whether it is and other domestic securities, interest on deposits in made directly to the beneficial owner or to another banks in the United States, and payments from any other person for the benefit of the beneficial owner. source within the United States are exempt from tax

Foreign persons are also subject to tax at graduated under section 892 and exempt from withholding under

sections 1441 and 1442. See Temporary Regulations rates on income they earn that is considered effectively section 1.892-6T. Payments to a foreign central bank of connected with a U.S. trade or business. If a foreign issue (whether or not wholly owned by a foreign person invests in a partnership that conducts a U.S. trade sovereign) or to the Bank for International Settlements or business, the foreign person is considered to be from obligations of the United States or of any agency or engaged in a U.S. trade or business. The partnership is instrumentality thereof, or from interest on deposits with required to withhold tax under section 1446 on the persons carrying on the banking business, are also foreign person’s distributive share of the partnership’s generally exempt from tax under section 895 and exempt effectively connected taxable income. from withholding under sections 1441 and 1442. In If you receive certain types of income, you must addition, payments to a foreign central bank of issue from provide Form W-8EXP to: bankers’ acceptances are exempt from tax under section • Establish that you are not a U.S. person, 871(i)(2)(C) and exempt from withholding under sections • Claim that you are the beneficial owner of the income 1441 and 1442. Effectively connected income or gain for which Form W-8EXP is given, and from a partnership conducting a trade or business in the • Claim a reduced rate of, or exemption from, United States may be subject to withholding under withholding as a foreign government, international section 1446. organization, foreign central bank of issue, foreign Payments to a foreign tax-exempt organization of tax-exempt organization, foreign private foundation, or certain types of U.S. source income are also generally government of a U.S. possession. exempt from tax and exempt from withholding. Gross In general, payments to a foreign government investment income of a foreign private foundation, (including a foreign central bank of issue wholly-owned however, is subject to withholding under section 1443(b) by a foreign sovereign) from investments in the United at a rate of 4%. Effectively connected income or gain States in stocks, bonds, other domestic securities, from a partnership conducting a trade or business in the financial instruments held in the execution of United States may be subject to withholding under governmental financial or monetary policy, and interest section 1446. on deposits in banks in the United States are exempt Payments to a government of a possession of the from tax under section 892 and exempt from withholding United States are generally exempt from tax and under sections 1441 and 1442. Payments other than withholding under section 115(2). those described above, including income derived in the

U.S. from the conduct of a commercial activity, income To establish eligibility for exemption from 30% tax and

received from a controlled commercial entity (including withholding, a foreign government, international

gain from the disposition of any interest in a controlled organization, foreign central bank of issue, foreign

commercial entity), and income received by a controlled tax-exempt organization, foreign private foundation, or

commercial entity, do not qualify for exemption from tax government of a U.S. possession must provide a Form

under section 892 or exemption from withholding under W-8EXP to a withholding agent or payer with all

Cat. No. 25903G
necessary documentation. The withholding agent or allocates income to you. Generally, a separate Form

payer of the income may rely on a properly completed W-8EXP must be given to each withholding agent.

Form W-8EXP to treat the payment, credit, or allocation Give Form W-8EXP to the person requesting it before associated with the Form W-8EXP as being made to a the payment is made, credited, or allocated to you or foreign government, international organization, foreign your account. If you do not provide this form, the central bank of issue, foreign tax-exempt organization, withholding agent may have to withhold tax at the 30% foreign private foundation, or government of a U.S. rate, the backup withholding rate, or the rate applicable possession exempt from withholding at the 30% rate (or, under section 1446. If you receive more than one type of where appropriate, subject to withholding at a 4% rate). income from a single withholding agent, the withholding

Provide Form W-8EXP to the withholding agent or agent may require you to submit a Form W-8EXP for

payer before income is paid, credited, or allocated to you. each different type of income.

Failure by a beneficial owner to provide a Form W-8EXP Change in circumstances. If a change in

when requested may lead to withholding at the 30% rate, circumstances makes any information on the Form

the backup withholding rate, or the rate applicable under W-8EXP you have submitted incorrect, you must notify

section 1446. the withholding agent within 30 days of the change in

circumstances and you must file a new Form W-8EXP or Additional information. For additional information and other appropriate form. instructions for the withholding agent, see the Instructions

for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, Expiration of Form W-8EXP. Generally, a Form

and W-8IMY. W-8EXP filed without a U.S. taxpayer identification

number (TIN) will remain in effect for a period starting on Who must file. You must give Form W-8EXP to the the date the form is signed and ending on the last day of withholding agent or payer if you are a foreign the third succeeding calendar year. However, in the case government, international organization, foreign central of an integral part of a foreign government (within the bank of issue, foreign tax-exempt organization, foreign meaning of Temporary Regulations section private foundation, or government of a U.S. possession. 1.892-2T(a)(2)) or a foreign central bank of issue, a Form Submit Form W-8EXP whether or not you are claiming a W-8EXP filed without a U.S. TIN will remain in effect until

reduced rate of, or exemption from, U.S. tax withholding. a change in circumstances makes any of the information

Do not use Form W-8EXP if: on the form incorrect. A Form W-8EXP furnished with a

U.S. TIN will remain in effect until a change in • You are not a foreign government, international

organization, foreign central bank of issue, foreign circumstances makes any information on the form

incorrect provided that the withholding agent reports on tax-exempt organization, foreign private foundation, or Form 1042-S, Foreign Person’s U.S. Source Income government of a U.S. possession claiming the Subject to Withholding, at least one payment annually to applicability of section 115(2), 501(c), 892, 895, or the beneficial owner. 1443(b). Instead, provide Form W-8BEN, Certificate of

Foreign Status of Beneficial Owner for United States Tax

Withholding, or Form W-8ECI, Certificate of Foreign Definitions

Person’s Claim That Income Is Effectively Connected Beneficial owner. For payments other than those for With the Conduct of a Trade or Business in the United which a reduced rate of withholding is claimed under an States. For example, if you are a foreign tax-exempt income tax treaty, the beneficial owner of income is organization claiming a benefit under an income tax generally the person who is required under U.S. tax treaty, provide Form W-8BEN. principles to include the income in gross income on a tax • You are receiving income that is effectively connected return. A person is not a beneficial owner of income, with the conduct of a trade or business in the United however, to the extent that person is receiving the States. Instead, provide Form W-8ECI. income as a nominee, agent, or custodian, or to the • You are a tax-exempt organization receiving unrelated extent the person is a conduit whose participation in a business taxable income subject to withholding under transaction is disregarded. In the case of amounts paid section 1443(a). Instead, provide Form W-8BEN or Form that do not constitute income, beneficial ownership is W-8ECI for this portion of your income. determined as if the payment were income. • You are a foreign partnership, a foreign simple trust, or Foreign partnerships, foreign simple trusts, and foreign a foreign grantor trust. Instead, provide Form W-8ECI or grantor trusts are not the beneficial owners of income Form W-8IMY, Certificate of Foreign Intermediary, paid to the partnership or trust. The beneficial owners of Foreign Flow-Through Entity, or Certain U.S. Branches income paid to a foreign partnership are generally the for United States Tax Withholding. However, a foreign partners in the partnership, provided that the partner is grantor trust is required to provide documentation of its not itself a partnership, foreign simple or grantor trust, grantor or other owner for purposes of section 1446. See nominee or other agent. The beneficial owners of income Regulations section 1.1446-1. paid to a foreign simple trust (that is, a foreign trust that is • You are acting as an intermediary (that is, acting not described in section 651(a)) are generally the for your own account, but for the account of others as an beneficiaries of the trust, if the beneficiary is not a foreign agent, nominee, or custodian). Instead, provide Form partnership, foreign simple or grantor trust, nominee or W-8IMY. other agent. The beneficial owners of a foreign grantor

Giving Form W-8EXP to the withholding agent. Do trust (that is, a foreign trust to the extent that all or a

not send Form W-8EXP to the IRS. Instead, give it to the portion of the income of the trust is treated as owned by

person who is requesting it from you. Generally, this the grantor or another person under sections 671 through

person will be the one from whom you receive the 679) are the persons treated as the owners of the trust.

payment, who credits your account, or a partnership that The beneficial owners of income paid to a foreign

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complex trust (that is, a foreign trust that is not a foreign Amounts exempt from tax under section 892. Only a

simple trust or foreign grantor trust) is the trust itself. foreign government or an international organization as

defined above qualifies for exemption from taxation under The beneficial owner of income paid to a foreign section 892. Section 892 generally excludes from gross estate is the estate itself. income and exempts from U.S. taxation income a foreign These beneficial owner rules apply primarily for government receives from investments in the United purposes of withholding under sections 1441 and 1442. States in stocks, bonds, or other domestic securities; The rules also generally apply for purposes of section financial instruments held in the execution of 1446, with a few exceptions. See Regulations section governmental financial or monetary policy; and interest 1.1446-1 for instances where the documentation on deposits in banks in the United States of monies requirements of sections 1441 and 1442 differ from belonging to the foreign government. Income of a foreign section 1446. government from any of the following sources is not

Foreign person. A foreign person includes a exempt from U.S. taxation.

nonresident alien individual, foreign corporation, foreign • The conduct of any commercial activity.

partnership, foreign trust, foreign estate, foreign • A controlled commercial entity.

government, international organization, foreign central • The disposition of any interest in a controlled

bank of issue, foreign tax-exempt organization, foreign commercial entity.

private foundation, or government of a U.S. possession, For the definition of “commercial activity,” see Temporary

and any other person that is not a U.S. person. It also Regulations section 1.892-4T.

includes a foreign branch or office of a U.S. financial Section 892 also generally excludes from gross institution or U.S. clearing organization if the foreign income and exempts from U.S. taxation income of an branch is a qualified intermediary. Generally, a payment international organization received from investments in to a U.S. branch of a foreign person is a payment to a the United States in stocks, bonds, or other domestic foreign person. securities and interest on deposits in banks in the United

Foreign government. A foreign government includes States of monies belonging to the international

only the integral parts or controlled entities of a foreign organization or from any other source within the United

sovereign as defined in Temporary Regulations section States.

1.892-2T. Controlled commercial entity. A controlled commercial

An integral part of a foreign sovereign, in general, is entity is an entity engaged in commercial activities

any person, body of persons, organization, agency, (whether within or outside the United States) if the foreign

bureau, fund, instrumentality, or other body, however government holds:

designated, that constitutes a governing authority of a • Any interest in the entity that is 50% or more of the

foreign country. The net earnings of the governing total of all interests in the entity, or

authority must be credited to its own account or to other • A sufficient interest or any other interest in the entity

accounts of the foreign sovereign, with no portion which provides the foreign government with effective

benefiting any private person. practical control of the entity.

A controlled entity of a foreign sovereign is an entity An entity includes a corporation, a partnership, a trust

that is separate in form from the foreign sovereign or (including a pension trust) and an estate. A partnership’s

otherwise constitutes a separate juridical entity only if: commercial activities are attributable to its general and

• It is wholly owned and controlled by the foreign limited partners for purposes of section 892. The

sovereign directly or indirectly through one or more partnership’s activities will result in the partnership having

controlled entities. to withhold tax under section 1446 on the effectively

• It is organized under the laws of the foreign sovereign connected taxable income allocable to a foreign

by which it is owned. government partner.

• Its net earnings are credited to its own account or to Note. A foreign central bank of issue will be treated as other accounts of the foreign sovereign, with no portion of a controlled commercial entity only if it engages in its income benefiting any private person. commercial activities within the United States. • Its assets vest in the foreign sovereign upon Foreign central bank of issue. A foreign central bank dissolution. of issue is a bank that is by law or government sanction

A controlled entity also includes a pension trust the principal authority, other than the government itself,

defined in Temporary Regulations section 1.892-2T(c) to issue instruments intended to circulate as currency.

and may include a foreign central bank of issue to the Such a bank is generally the custodian of the banking

extent that it is wholly owned by a foreign sovereign. reserves of the country under whose law it is organized.

A foreign government must provide Form W-8EXP to For purposes of section 895, the Bank of International

establish eligibility for exemption from withholding for Settlements is treated as though it were a foreign central

payments exempt from tax under section 892. bank of issue.

International organization. An international A foreign central bank of issue must provide Form

organization is any public international organization W-8EXP to establish eligibility for exemption from

entitled to enjoy privileges, exemptions, and immunities withholding for payments exempt from tax under either

as an international organization under the International section 892 or section 895.

Organizations Immunities Act (22 U.S.C. 288-288(f)). In Amounts exempt from tax under section 895. Section

general, to qualify as an international organization, the 895 generally excludes from gross income and exempts

United States must participate in the organization from U.S. taxation income a foreign central bank of issue

pursuant to a treaty or under the authority of an Act of receives from obligations of the United States (or of any

Congress authorizing such participation. agency or instrumentality thereof) or from interest on

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deposits with persons carrying on the banking business Line 6. A U.S. taxpayer identification number (TIN)

unless such obligations or deposits are held for, or used means an employer identification number (EIN). A U.S.

in connection with, the conduct of commercial banking TIN is generally required if you are claiming an

functions or other commercial activities of the foreign exemption or reduced rate of withholding based solely on

central bank of issue. your claim of tax-exempt status under section 501(c) or

private foundation status. Use Form SS-4, Application for Amounts subject to withholding. Generally, an Employer Identification Number, to obtain an EIN. amount subject to withholding under section 1441 or

1442 is an amount from sources within the United States Line 7. If the country of residence for tax purposes has

that is fixed or determinable annual or periodical (FDAP) issued the organization a tax identifying number, enter it

income. FDAP income is all income included in gross here.

income, including interest (as well as original issue Line 8. This line may be used by the filer of Form discount (OID)), dividends, rents, royalties, and W-8EXP or by the withholding agent to whom it is compensation. FDAP income does not include most provided to include any referencing information that is gains from the sale of property (including market discount useful to the withholding agent in carrying out its and option premiums). obligations. A filer may use line 8 to include the name

Income is subject to withholding under section 1446 if and number of the account for which the filer is providing

the income is effectively connected with a partnership’s the form.

trade or business in the United States and is allocable to

a foreign person. Part II

Withholding agent. Any person, U.S. or foreign, that Line 9. Check box 9a and box 9b or box 9c, whichever has control, receipt, or custody of an amount subject to applies. Enter the name of the foreign sovereign’s withholding or who can disburse or make payments of an country on line 9b (if the entity is an integral part of a amount subject to withholding is a withholding agent. The foreign government) or on line 9c (if the entity is a withholding agent may be an individual, corporation, controlled entity). A central bank of issue (wholly owned partnership, trust, association, or any other entity by a foreign sovereign) should check box 9c. including (but not limited to) any foreign intermediary, Line 10. Check this box if you are an international foreign partnership, and U.S. branches of certain foreign organization. By checking this box, you are certifying to banks and insurance companies. Generally, the person

who pays (or causes to be paid) an amount subject to all the statements made in line 10.

withholding to the foreign person (or to its agent) must Line 11. Check this box if you are a foreign central bank

withhold. of issue not wholly owned by a foreign sovereign. By

checking this box, you are certifying to all the statements

made in line 11.

Specific Instructions Line 12. Check the appropriate box if you are a foreign

tax-exempt organization.

Part I If you are a foreign tax-exempt organization, you

Before completing Part I, complete the Worksheet for must attach a statement setting forth any income

Foreign Governments, International Organizations, and CAUTION that is includible under section 512 in computing

!

Foreign Central Banks of Issue on page 6 to determine your unrelated business taxable income.

whether amounts received are or will be exempt from Box 12a. Check this box if you have been issued a U.S. tax under section 892 or 895 and exempt from determination letter by the IRS. Enter the date of the IRS withholding under sections 1441 and 1442. Use the determination letter. results of this worksheet to check the appropriate box in

Part II. Do not give the worksheet to the withholding Box 12b. Check this box if you do not have an IRS

agent. Instead, keep it for your records. determination letter, but are providing an opinion of U.S.

counsel concluding that you are an organization Line 1. Enter the full name of the organization. described in section 501(c).

Line 2. Enter the country under the laws of which the Box 12c. If you are a section 501(c)(3) organization, foreign government or other foreign organization was check this box if you are not a private foundation. You created, incorporated, organized, or governed. must attach to the withholding certificate an affidavit

Line 3. Check the one box that applies. A foreign central setting forth sufficient facts concerning your operations

bank of issue (wholly owned by a foreign sovereign) and support to enable the IRS to determine that you

should check the “Foreign government” box. would be likely to qualify as an organization described in

section 509(a)(1), (2), (3), or (4). See Rev. Proc. 92-94, Line 4. The permanent address of a foreign government, 1992-2 C.B. 507, section 4, for information on affidavit international organization, or foreign central bank of issue preparation of foreign equivalents of domestic public is where it maintains its principal office. For all other charities. organizations, the permanent address is the address in

the country where the organization claims to be a Box 12d. Check this box if you are a section 501(c)(3)

resident for tax purposes. Do not show the address of a organization and you are a private foundation described

financial institution, a post office box, or an address used in section 509.

solely for mailing purposes. Line 13. Check this box if you are a government of a

Line 5. Enter the mailing address only if it is different U.S. possession. By checking this box you are certifying

from the address shown on line 4. to the statements made in line 13.

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Revenue law. Generally, tax returns and return Part III information are confidential, as required by section 6103. Form W-8EXP must be signed and dated by an The time needed to complete and file this form will authorized official of the foreign government, international vary depending on individual circumstances. The organization, foreign central bank of issue, foreign estimated average time is: Recordkeeping, 7 hr., 10 tax-exempt organization, foreign private foundation, or min.; Learning about the law or the form, 5 hr., 28 government of a U.S. possession, as appropriate. min.; Preparing and sending the form to IRS, 5 hr., 49

min.

Paperwork Reduction Act Notice. We ask for the

If you have comments concerning the accuracy of information on this form to carry out the Internal Revenue

laws of the United States. You are required to provide the these time estimates or suggestions for making this form

simpler, we would be happy to hear from you. You can information. We need it to ensure that you are complying

with these laws and to allow us to figure and collect the email us at *taxforms@irs.gov. Please put “Forms

Comment” on the subject line. Or you can write to right amount of tax. Internal Revenue Service, Tax Products Coordinating You are not required to provide the information Committee, SE:W:CAR:MP:T:T:SP, 1111 Constitution requested on a form that is subject to the Paperwork Ave. NW, IR-6406, Washington, DC 20224. Do not send Reduction Act unless the form displays a valid OMB Form W-8EXP to this office. Instead, give it to your control number. Books or records relating to a form or its withholding agent. instructions must be retained as long as their contents

may become material in the administration of any Internal

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WORKSHEET FOR FOREIGN GOVERNMENTS, INTERNATIONAL ORGANIZATIONS, AND FOREIGN CENTRAL

BANKS OF ISSUE

(Do not give to the withholding agent. Keep for your records.)

Complete this worksheet to determine whether amounts received are or will be exempt from United States tax under section 892 or

section 895 and exempt from withholding under sections 1441 and 1442.

• Foreign governments and foreign central banks of issue, start with question 1.

• International organizations, go directly to question 6.

FOREIGN GOVERNMENT Yes No

1 a Is the foreign government an integral part of a foreign sovereign (see Definitions)? . . . . . . . . . . . . . . . . . . . . . . . ❏ ❏

(If “Yes,” go to question 4. If “No,” answer question 1b.)

b Is the foreign government a controlled entity of a foreign sovereign (see Definitions)? . . . . . . . . . . . . . . . . . . . . . ❏ ❏

(If “Yes,” answer question 2a. If “No,” go to question 7a.)

2 a Is the controlled entity a foreign central bank of issue (see Definitions)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ❏ ❏

(If “Yes,” answer question 2b. If “No,” go to question 3.)

b Is the foreign central bank of issue engaged in commercial activities within the United States? ................ ❏ ❏

(If “Yes,” answer question 7a. If “No,” go to question 4.)

3 Is the controlled entity engaged in commercial activities anywhere in the world? .......................... ❏ ❏

(If “Yes,” income is not exempt from tax under section 892 and may be subject to withholding. Do not complete

Form W-8EXP for such income. Instead, complete Form W-8BEN or W-8ECI. If “No,” answer question 4.)

4 Does the foreign government or foreign central bank of issue (wholly owned by the foreign sovereign) receive

income directly or indirectly from any controlled commercial entities or income derived from the disposition of any

interest in a controlled commercial entity (see Definitions)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ❏ ❏

(If “Yes,” income is not exempt from tax under section 892 and may be subject to withholding. Do not complete

Form W-8EXP for such income. Instead, complete Form W-8BEN or W-8ECI. If “No,” answer question 5.)

5 Is any of the income received by the foreign government or foreign central bank of issue (wholly owned by the

foreign sovereign) from sources other than investments in the United States in stocks, bonds, other domestic

securities (as defined in Temporary Regulations section 1.892-3T(a)(3)), financial instruments held in the execution

of governmental financial or monetary policy (as defined in Temporary Regulations section 1.892-3T(a)(4) and

(a)(5)), or interest on deposits in banks in the United States? ....................................... ❏ ❏

(If “Yes,” income is not exempt from tax under section 892 and may be subject to withholding. Do not complete

Form W-8EXP for such income. Instead, complete Form W-8BEN or W-8ECI. If “No,” check the appropriate box on

line 9 of Form W-8EXP.)

INTERNATIONAL ORGANIZATION Yes No

6 Is the international organization an organization in which the United States participates pursuant to any treaty or

under an Act of Congress authorizing such participation and to which the President of the United States has issued

an Executive Order entitling the organization to enjoy the privileges, exemptions, and immunities provided under the

International Organization Immunities Act (22 U.S.C. 288, 288e, 288f)? ............................... ❏ ❏

(If “Yes,” check the box on line 10 of Form W-8EXP. If “No,” income may be subject to withholding. Do not complete

this form for such income. Instead, complete Form W-8BEN or W-8ECI.)

FOREIGN CENTRAL BANK OF ISSUE Yes No

7 a Is the entity, whether wholly or partially owned by the foreign sovereign, a foreign central bank of issue? ........ ❏ ❏

(If “Yes,” answer question 7b. If “No,” income is not exempt from tax under section 895 and may be subject to

withholding. Do not complete Form W-8EXP for such income. Instead, complete Form W-8BEN or W-8ECI.)

b Is the income received by the foreign central bank of issue from sources other than obligations of the United States

(or any agency or instrumentality thereof) or from interest on deposits with persons carrying on the banking

business? .......................................................................... ❏ ❏

(If “Yes,” income is not exempt from tax under section 895 and may be subject to withholding. Do not complete

Form W-8EXP for such income. Instead, complete Form W-8BEN or W-8ECI. If “No,” answer question 7c.)

c Are the obligations of the United States (or any agency or instrumentality thereof) or bank deposits owned by the

foreign central bank of issue held for, or used in connection with, the conduct of commercial banking functions or

other commercial activities by the foreign central bank of issue? ..................................... ❏ ❏

(If “Yes,” income is not exempt from tax under section 895 and may be subject to withholding. Do not complete

Form W-8EXP for such income. Instead, complete Form W-8BEN or W-8ECI. If “No,” check the box on line 11 of

Form W-8EXP.)

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Form W-8IMY

(Rev. February 2006)

Department of the Treasury

Internal Revenue Service

Certificate of Foreign Intermediary,

Foreign Flow-Through Entity, or Certain U.S.

Branches for United States Tax Withholding

Section references are to the Internal Revenue Code. See separate instructions.

Give this form to the withholding agent or payer. Do not send to the IRS.

OMB No. 1545-1621

Part I

Part II

Identification of Entity 

1 2

4

5

6 7

8

3

Name of individual or organization that is acting as intermediary Country of incorporation or organization

Permanent residence address (street, apt. or suite no., or rural route). Do not use P.O. box.

City or town, state or province. Include postal code where appropriate. Country (do not abbreviate)

U.S. taxpayer identification number (if required, see instructions) Foreign tax identifying number, if any (optional)

Reference number(s) (see instructions)

Type of entity—check the appropriate box:

Qualified intermediary. Complete Part II.

Mailing address (if different from above)

City or town, state or province. Include postal code where appropriate. Country (do not abbreviate)

Qualified Intermediary

(All qualified intermediaries check here) I certify that the entity identified in Part I:

● Has provided or will provide a withholding statement, as required.

Nonqualified intermediary. Complete Part III.

U.S. branch. Complete Part IV.

● Is a qualified intermediary and is not acting for its own account with respect to the account(s) identified

on line 8 or in a withholding statement associated with this form and

Nonqualified Intermediary

(All nonqualified intermediaries check here) I certify that the entity identified in Part I is not a qualified

intermediary and is not acting for its own account.

(If applicable) I certify that the entity identified in Part I is using this form to transmit withholding certificates

and/or other documentary evidence and has provided or will provide a withholding statement, as required.

Part III

For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 25402Q Form W-8IMY (Rev. 2-2006)

Withholding foreign trust. Complete Part V.

Withholding foreign partnership. Complete Part V.

9a

10a

(If applicable) I certify that the entity identified in Part I has assumed primary withholding responsibility

under Chapter 3 of the Code with respect to the account(s) identified on this line 9b or in a withholding

statement associated with this form 

Do not use this form for:

● A beneficial owner solely claiming foreign status or treaty benefits

● A hybrid entity claiming treaty benefits on its own behalf

● A person claiming that income is effectively connected with the conduct of a trade or business in the United States

● A foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization,

foreign private foundation, or government of a U.S. possession claiming the applicability of section(s) 115(2), 501(c), 892, 895, or 1443(b)

Instead, use Form:

W-8BEN

W-8BEN

W-8ECI

W-8EXP

SSN or ITIN EIN

b

b

QI-EIN

Nonwithholding foreign partnership. Complete Part VI.

Nonwithholding foreign simple trust. Complete Part VI.

(If applicable) I certify that the entity identified in Part I has assumed primary Form 1099 reporting and

backup withholding responsibility as authorized in its withholding agreement with the IRS with respect to

the account(s) identified on this line 9c or in a withholding statement associated with this form 

c

● A disregarded entity. Instead, the single foreign owner should use W-8BEN or W-8ECI

Nonwithholding foreign grantor trust. Complete Part VI.
Part IV Certain United States Branches

I certify that the entity identified in Part I is a U.S. branch and that the payments are not effectively

connected with the conduct of a trade or business in the United States.

Part VI

Part V Withholding Foreign Partnership or Withholding Foreign Trust

Nonwithholding Foreign Partnership, Simple Trust, or Grantor Trust

Under penalties of perjury, I declare that I have examined the information on this form and to the best of my knowledge and belief it is true, correct, and complete.

Furthermore, I authorize this form to be provided to any withholding agent that has control, receipt, or custody of the income for which I am providing this form or

any withholding agent that can disburse or make payments of the income for which I am providing this form.

Sign Here  Signature of authorized official Date (MM-DD-YYYY)

I certify that the entity identified in Part I:

I certify that the entity identified in Part I:

● Is using this form to transmit withholding certificates and/or other documentary evidence and has

provided or will provide a withholding statement, as required.

Form W-8IMY (Rev. 2-2006) Page 2

12

13

I certify that the entity identified in Part I is using this form as evidence of its agreement with the

withholding agent to be treated as a U.S. person with respect to any payments associated with this

certificate.

● Has provided or will provide a withholding statement, as required.

15

11

Note: You may use this Part if the entity identified in Part I is a U.S. branch of a foreign bank or insurance company

and is subject to certain regulatory requirements (see instructions).

Check box 12 or box 13, whichever applies:

14

Certification

I certify that the entity identified in Part I:

● Is using this form to transmit withholding certificates or other documentary evidence for the persons for

whom the branch receives a payment and

● Is a withholding foreign partnership or a withhholding foreign trust and

● Is a nonwithholding foreign partnership, a nonwithholding foreign simple trust, or a nonwithholding foreign

grantor trust and that the payments to which this certificate relates are not effectively connected, or are not

treated as effectively connected, with the conduct of a trade or business in the United States and

● Has provided or will provide a withholding statement, as required.

Part VII

Form W-8IMY (Rev. 2-2006)
Department of the Treasury Instructions for Form Internal Revenue Service

W-8IMY

(Rev. February 2006)

Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S.

Branches for United States Tax Withholding

certificates and/or other documentary evidence and has General Instructions provided, or will provide, a withholding statement, as

Section references are to the Internal Revenue Code unless required. A U.S. person cannot be a nonqualified

otherwise noted. intermediary.

Note. For definitions of terms used throughout these • A U.S. branch of certain foreign banks or foreign

instructions, see Definitions on pages 2 and 3. insurance companies to represent that the income it

receives is not effectively connected with the conduct of a Foreign persons are subject to U.S. tax at a 30% rate on trade or business within the United States and either that it income they receive from U.S. sources that consists of is using the form (a) as evidence of its agreement with the interest (including certain original issue discount (OID)), withholding agent to be treated as a U.S. person with dividends, rents, premiums, annuities, compensation for, or respect to any payments associated with the Form W-8IMY in expectation of, services performed, or other fixed or or (b) to transmit the documentation of the persons for determinable annual or periodical (FDAP) gains, profits, or whom it receives a payment and has provided, or will income. This tax is imposed on the gross amount paid and provide, a withholding statement, as required. is generally collected by withholding under section 1441 or • A foreign partnership or a foreign simple or grantor trust to 1442 on that amount. A payment is considered to have been

made whether it is made directly to the beneficial owner or establish that it is a withholding foreign partnership or

withholding foreign trust under the regulations for sections to another person, such as an intermediary, agent, trustee, 1441 and 1442 and that it has provided, or will provide, a executor, or partnership, for the benefit of the beneficial withholding statement, as required. owner. • A foreign partnership or a foreign simple or grantor trust to Foreign persons are also subject to tax at graduated establish that it is a nonwithholding foreign partnership or rates on income they earn that is considered effectively nonwithholding foreign simple or grantor trust for purposes connected with a U.S. trade or business. If a foreign person of section 1441 and 1442 and to represent that the income invests in a partnership that conducts a U.S. trade or is not effectively connected with a U.S. trade or business, business, the foreign person is considered to be engaged in that the form is being used to transmit withholding a U.S. trade or business. The partnership is required to certificates and/or documentary evidence, and that it has withhold tax under section 1446 on the foreign person’s provided, or will provide, a withholding statement, as distributive share of the partnership’s effectively connected required. taxable income. The partnership may generally accept any Solely for purposes of providing this form, a reverse form submitted for purposes of section 1441 or 1442, with hybrid entity that is providing documentation on behalf of its few exceptions, to establish the foreign status of the partner. interest holders to claim a reduced rate of withholding under See Regulations sections 1.1446-1 through 1.1446-6 to a treaty is considered to be a nonqualified intermediary determine whether the form submitted for purposes of unless it has entered into a qualified intermediary agreement section 1441 or 1442 will be accepted for purposes of with the IRS. section 1446. • A foreign partnership or foreign grantor trust to establish For purposes of section 1446, Form W-8IMY may that it is an upper-tier foreign partnership or foreign grantor only be submitted by an upper-tier foreign trust for purposes of section 1446, and to represent that the partnership or a foreign grantor trust, both of which form is being used to transmit withholding certificates and/or CAUTION

!

must furnish additional documentation for their owners. documentary evidence and that it has provided, or will

Additional information. For additional information and provide, a withholding statement, as required.

instructions for the withholding agent, see the Instructions This form may serve to establish foreign status for for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and purposes of sections 1441, 1442, and 1446. However, any W-8IMY. representations that items of income, gain, deduction, or Who must file. Form W-8IMY must be provided by: loss are not effectively connected with a U.S. trade or • A foreign person, or a foreign branch of a U.S. person, to business will be disregarded by a partnership receiving this establish that it is a qualified intermediary that is not acting form for purposes of section 1446 as the partnership will for its own account, to represent that it has provided or will undertake its own analysis. provide a withholding statement, as required, and, if

applicable, to represent that it has assumed primary Do not use Form W-8IMY if:

withholding responsibility under Chapter 3 of the Code • You are the beneficial owner of U.S. source income (other

(excluding section 1446) and/or primary Form 1099 than income that is effectively connected with the conduct of

reporting and backup withholding responsibility. a trade or business within the United States) and you need

• A foreign person to establish that it is a nonqualified to establish that you are not a U.S. person. Instead, submit

intermediary that is not acting for its own account, and, if Form W-8BEN, Certificate of Foreign Status of Beneficial

applicable, that it is using the form to transmit withholding Owner for United States Tax Withholding.

Cat. No. 25904R
• You are the beneficial owner of U.S. source income (other Expiration of Form W-8IMY. Generally, a Form W-8IMY

than income that is effectively connected with the conduct of remains valid until the status of the person whose name is

a trade or business within the United States) and are on the certificate is changed in a way relevant to the

claiming a reduced rate of, or exemption from, withholding certificate or circumstances change that make the

as a resident of a foreign country with which the United information on the certificate no longer correct. The

States has an income tax treaty. Instead, provide Form indefinite validity period does not extend, however, to any

W-8BEN. withholding certificates, documentary evidence, or

• You are filing for a hybrid entity claiming treaty benefits on withholding statements associated with the certificate.

its own behalf, or you are filing for a reverse hybrid entity

and are not claiming treaty benefits on behalf of its interest Definitions

holders. Instead, provide Form W-8BEN. Amounts subject to withholding. Generally, an amount • You are the beneficial owner of income that is effectively subject to withholding under section 1441 or 1442 is an connected with the conduct of a trade or business within the amount from sources within the United States that is FDAP

United States. Instead, provide Form W-8ECI, Certificate of income. FDAP income is all income included in gross Foreign Person’s Claim That Income Is Effectively income, including interest (and original issue discount), Connected With the Conduct of a Trade or Business in the dividends, rents, royalties, and compensation. FDAP income United States. does not include most gains from the sale of property

• You are a nonresident alien individual who claims (including market discount and option premiums). FDAP

exemption from withholding on compensation for income also does not include items of U.S. source income

independent or certain dependent personal services that are excluded from gross income without regard to the

performed in the United States. Instead, provide Form 8233, U.S. or foreign status of the holder, such as interest under

Exemption From Withholding on Compensation for section 103(a).

Independent (and Certain Dependent) Personal Services of Generally, an amount subject to withholding under a Nonresident Alien Individual, or Form W-4, Employee’s

Withholding Allowance Certificate. section 1446 is an amount that is, or is treated as, effectively

connected income of a U.S. trade or business of the • You are filing for a disregarded entity. (A business entity partnership. that has a single owner and is not a corporation under

Regulations section 301.7701-2(b) is disregarded as an Beneficial owner. For payments other than those for which

entity separate from its owner.) Instead, provide Form a reduced rate of withholding is claimed under an income

W-8BEN or W-8ECI. tax treaty, the beneficial owner of income is generally the

• You are filing for a foreign government, international person who is required under U.S. tax principles to include

organization, foreign central bank of issue, foreign the income in gross income on a tax return. A person is not

tax-exempt organization, foreign private foundation, or a beneficial owner of income, however, to the extent that

government of a U.S. possession claiming the applicability person is receiving the income as a nominee, agent, or

of section 115(2), 501(c), 892, 895, or 1443(b). Instead, custodian, or to the extent the person is a conduit whose

provide Form W-8EXP, Certificate of Foreign Government or participation in a transaction is disregarded. In the case of

Other Foreign Organization for United States Tax amounts paid that do not constitute income, beneficial

Withholding. However, these entities should use Form ownership is determined as if the payment were income.

W-8BEN if they are claiming treaty benefits or are providing Foreign partnerships, foreign simple trusts, and foreign the form only to claim exempt recipient status for backup grantor trusts are not the beneficial owners of income paid withholding purposes. to the partnership or trust. The beneficial owners of income

Giving Form W-8IMY to the withholding agent. Do not paid to a foreign partnership are generally the partners in

send Form W-8IMY to the IRS. Instead, give it to the person the partnership, provided that the partner is not itself a

who is requesting it. Generally, this person will be the one partnership, foreign simple or grantor trust, nominee, or

from whom you receive the payment, who credits your other agent. The beneficial owners of income paid to a

account, or a partnership that allocates income to you. Give foreign simple trust (that is, a foreign trust that is described

Form W-8IMY to the person requesting it before income is in section 651(a)) are generally the beneficiaries of the trust,

paid to you, credited, or allocated to your account. If you do if the beneficiary is not itself a foreign partnership, foreign

not provide this form, the withholding agent may have to simple or grantor trust, nominee, or other agent. The

withhold at the 30% rate, backup withholding rate with beneficial owners of a foreign grantor trust (that is, a foreign

respect to non effectively connected income, or the 35% trust to the extent that all or a portion of the income of the

rate for net effectively connected taxable income allocable to trust is treated as owned by the grantor or another person

a foreign partner in a partnership. Generally, a separate under sections 671 through 679) are the persons treated as

Form W-8IMY must be submitted to each withholding agent. the owners of the trust. The beneficial owner of income paid

to a foreign complex trust (that is, a foreign trust that is not a Change in circumstances. If a change in circumstances foreign simple trust or foreign grantor trust) is the trust itself. makes any information on the Form W-8IMY (or any

documentation or a withholding statement associated with The beneficial owner of income paid to a foreign estate is

the Form W-8IMY) you have submitted incorrect, you must the estate itself.

notify the withholding agent or payer within 30 days of the Fiscally transparent entity. An entity is treated as fiscally changes in circumstances and you must file a new Form

W-8IMY or provide new documentation or a new withholding transparent with respect to an item of income to the extent

that the interest holders in the entity must, on a current statement. basis, take into account separately their shares of an item of

You must update the information associated with Form income paid to the entity, whether or not distributed, and

W-8IMY as often as is necessary to enable the withholding must determine the character of the items of income as if

agent to withhold at the appropriate rate on each payment they were realized directly from the sources from which

and to report such income. realized by the entity.

-2-
Flow-through entity. A flow-through entity is a foreign discount arising from a sale and repurchase transaction

partnership (other than a withholding foreign partnership), a completed within a period of 2 weeks or less, or amounts

foreign simple or foreign grantor trust (other than a described in Regulations section 1.6049-5(b)(7), (10), or

withholding foreign trust), or, for payments for which a (11) (relating to certain obligations issued in bearer form).

reduced rate of withholding is claimed under an income tax See the instructions for Forms 1042-S and 1099 to

treaty, any entity to the extent the entity is considered to be determine whether these amounts are also subject to

fiscally transparent (see earlier) with respect to the payment information reporting.

by an interest holder’s jurisdiction. Reverse hybrid entity. A reverse hybrid entity is any

Foreign person. A foreign person includes a nonresident person (other than an individual) that is not fiscally

alien individual, a foreign corporation, a foreign partnership, transparent under U.S. tax law principles but that is fiscally

a foreign trust, a foreign estate, and any other person that is transparent under the laws of a jurisdiction with which the

not a U.S. person. It also includes a foreign branch or office United States has an income tax treaty.

of a U.S. financial institution or U.S. clearing organization if Withholding agent. A withholding agent is any person, the foreign branch is a qualified intermediary. Generally, a U.S. or foreign, that has control, receipt, or custody of an payment to a U.S. branch of a foreign person is a payment amount subject to withholding or who can disburse or make to a foreign person. payments of an amount subject to withholding. The Hybrid entity. A hybrid entity is any person (other than an withholding agent may be an individual, corporation, individual) that is treated as fiscally transparent (see earlier) partnership, trust, association, or any other entity, including in the United States but is not treated as fiscally transparent (but not limited to) any foreign intermediary, foreign by a country with which the United States has an income tax partnership, and U.S. branches of certain foreign banks and treaty. Hybrid status is relevant for claiming treaty benefits. insurance companies. Generally, the person who pays (or

Intermediary. An intermediary is any person that acts as a causes to be paid) the amount subject to withholding to the

custodian, broker, nominee, or otherwise as an agent for foreign person (or to its agent) must withhold.

another person, regardless of whether that other person is Withholding foreign partnership or withholding foreign the beneficial owner of the amount paid, a flow-through trust. A withholding foreign partnership or withholding entity, or another intermediary. foreign trust is a foreign partnership or a foreign simple or Qualified intermediary. A qualified intermediary is a grantor trust that has entered into a withholding agreement person that is a party to a withholding agreement with the with the IRS in which it agrees to assume primary IRS and is: withholding responsibility under sections 1441 and 1442 for • A foreign financial institution or a foreign clearing all payments that are made to it for certain of its partners, organization (other than a U.S. branch or U.S. office of the beneficiaries, or owners and is acting in its capacity as a institution or organization), withholding foreign partnership or withholding foreign trust. • A foreign branch or office of a U.S. financial institution or See Rev. Proc. 2003-64 for procedures to apply to be a a foreign branch or office of a U.S. clearing organization, withholding foreign partnership or trust. You can find Rev. • A foreign corporation for purposes of presenting claims of Proc. 2003-64 on page 306 of Internal Revenue Bulletin benefits under an income tax treaty on behalf of its (IRB) 2003-32 at www.irs.gov/pub/irs-irbs/irb03-32.pdf. Also shareholders, or see Rev. Proc. 2004-21 (IRB 2004-14). • Any other person the IRS accepts as a qualified

intermediary and who enters into a withholding agreement

with the IRS.

See Rev. Proc. 2000-12 for procedures to apply to be a Specific Instructions

qualified intermediary. You can find Rev. Proc. 2000-12 on

page 387 of Internal Revenue Bulletin (IRB) 2000-4 at Part I www.irs.gov/pub/irs-irbs/irb00-04.pdf. Also see Notice

2001-4 (IRB 2001-2); Rev. Proc. 2003-64, Appendix 3 (IRB Line 1. Enter your name. By doing so, you are representing

2003-32); and Rev. Proc. 2004-21 (IRB 2004-14). to the payer or withholding agent that you are not the

Nonqualified intermediary. A nonqualified intermediary beneficial owner of the amounts that will be paid to you.

is any intermediary that is not a U.S. person and that is not a Line 2. If you are a corporation, enter the country of

qualified intermediary. incorporation. If you are another type of entity, enter the

Nonwithholding foreign partnership, simple trust, or country under whose laws you are created, organized, or

grantor trust. A nonwithholding foreign partnership is any governed. If you are an individual, enter “N/A” (for “not

foreign partnership other than a withholding foreign applicable”).

partnership. A nonwithholding foreign simple trust is any Line 3. Check the one box that applies. If you are a foreign foreign simple trust that is not a withholding foreign trust. A partnership receiving the payment on behalf of your nonwithholding foreign grantor trust is any foreign grantor partners, check the “Withholding foreign partnership” box or trust that is not a withholding foreign trust. the “Nonwithholding foreign partnership” box, whichever is

Reportable amount. Solely for purposes of the statements appropriate. If you are a foreign simple trust or foreign

required to be attached to Form W-8IMY, a reportable grantor trust receiving the payment on behalf of your

amount is an amount subject to withholding, U.S. source beneficiaries or owners, check the “Withholding foreign

deposit interest (including original issue discount), and U.S. trust” box, the “Nonwithholding foreign simple trust” box, or

source interest or original issue discount on the redemption the “Nonwithholding foreign grantor trust” box, whichever is

of short-term obligations. It does not include payments on appropriate. If you are a foreign partnership (or a foreign

deposits with banks and other financial institutions that trust) receiving a payment on behalf of persons other than

remain on deposit for 2 weeks or less or amounts received your partners (or beneficiaries or owners), check the

from the sale or exchange (other than a redemption) of a “Qualified intermediary” box or the “Nonqualified

short-term obligation that is effected outside the United intermediary” box, whichever is appropriate. A reverse

States. It also does not include amounts of original issue hybrid entity that is providing documentation from its interest

-3-
holders to claim a reduced rate of withholding under a treaty A nonqualified intermediary, a nonwithholding foreign

should check the “Nonqualified intermediary” box unless it partnership, or a nonwithholding foreign simple or grantor

has entered into a qualified intermediary agreement with the trust is generally not required to provide a U.S. TIN.

IRS. See Parts II Through VI below if you are acting in more However, a nonwithholding foreign grantor trust with five or

than one capacity. A partnership or grantor trust submitting fewer grantors is required to provide an EIN.

Form W-8IMY solely because it is allocated income Line 7. If your country of residence for tax purposes has effectively connected with a U.S. trade or business as a issued you a tax identifying number, enter it here. partner in a partnership should check the box for Line 8. This line may be used by the filer of Form W-8IMY nonwithholding foreign partnership or nonwithholding foreign or by the withholding agent to whom it is provided to include grantor trust and, if it is submitting or will submit any referencing information that is useful to the withholding documentation for its partners or owners, it should complete agent in carrying out its obligations. For example, a Part VI. A withholding foreign partnership or a grantor trust withholding agent who is required to associate a particular that is a withholding foreign trust should submit a separate Form W-8BEN with this Form W-8IMY may want to use Form W-8IMY if it is allocated income that is effectively line 8 for a referencing number or code that will make the connected with a U.S. trade or business as a partner in a association clear. partnership and should check the box for nonwithholding

foreign partnership or nonwithholding foreign grantor trust Parts II Through VI and, if it is submitting or will submit documentation for its

partners or owners, it should complete Part VI. You should complete only one part. If you are acting in

multiple capacities, you must provide separate Forms Form W-8IMY may be submitted and accepted to W-8IMY for each capacity. For example, if you are acting as satisfy documentation requirements for purposes of a qualified intermediary for one account, but a nonqualified withholding on certain partnership allocations to

TIP

intermediary for another account, you must provide one foreign partners under section 1446. Section 1446 generally Form W-8IMY in your capacity as a qualified intermediary, requires withholding when a partnership is conducting a and a separate Form W-8IMY in your capacity as a trade or business in the United States and allocates income nonqualified intermediary. effectively connected with that trade or business (ECI) to

foreign persons that are partners in the partnership. Section

1446 can also apply when certain income is treated as Part II — Qualified Intermediary

effectively connected income of the partnership and is so Check box 9a if you are a qualified intermediary (QI)

allocated. (whether or not you assume primary withholding

responsibility) for the income for which you are providing this An upper-tier partnership that is allocated ECI as a form. By checking the box, you are certifying to all of the partner in a partnership may, in certain circumstances, have statements contained on line 9a. the lower-tier partnership perform its withholding obligation.

Generally, this is accomplished by the upper-tier partnership Check box 9b only if you have assumed primary

submitting withholding certificates of its partners (for withholding responsibility under Chapter 3 of the Code

example, Form W-8BEN ) along with a Form W-8IMY, which (nonresident alien withholding) with respect to the accounts

identifies itself as a partnership, and identifying the manner identified on this line or in a withholding statement

in which ECI of the upper-tier partnership will be allocated to associated with this form.

the partners. For further information, see Regulations Check box 9c only if you have assumed primary Form section 1.1446–5. A foreign grantor trust that is allocated 1099 reporting and backup withholding responsibility as ECI as a partner in a partnership should provide the authorized in a withholding agreement with the IRS with withholding certificates of its grantor (for example, Form respect to the accounts identified on this line or in a W-8BEN ) along with its Form W-8IMY which identifies the withholding statement associated with this form. trust as a foreign grantor trust. See Regulations section Although a QI obtains withholding certificates or 1.1446-1(c)(ii)(E) for the rules requiring it to provide appropriate documentation from beneficial owners, payees, additional documentation to the partnership. and, if applicable, shareholders, as specified in your Line 4. Your permanent residence address is the address withholding agreement with the IRS, a QI does not need to in the country where you claim to be a resident. Do not show attach the certificates or documentation to this form. the address of a financial institution, a post office box, or an However, to the extent you have not assumed primary Form address used solely for mailing purposes. If you do not have 1099 reporting or backup withholding responsibility, you a tax residence in any country, the permanent residence must disclose the names of those U.S. persons for whom address is where you maintain your principal office or, if you you receive reportable amounts and that are not exempt are an individual, where you normally reside. recipients (as defined in Regulations section Line 5. Enter your mailing address only if it is different from 1.6049-4(c)(1)(ii) or under section 6041, 6042, 6045, or the address you show on line 4. 6050N). You should make this disclosure by attaching to

Line 6. You must provide an employer identification number Form W-8IMY the Forms W-9 (or substitute forms) of

(EIN) if you are a U.S. branch of a foreign bank or insurance persons that are not exempt recipients. If you do not have a

company, an upper-tier partnership that is allocated ECI as Form W-9 for a non-exempt U.S. payee, you must attach to

a partner in a partnership, or a foreign grantor trust that is Form W-8IMY any information you do have regarding that

allocated ECI as a partner. person’s name, address, and TIN.

 If you are acting as a qualified intermediary, withholding Withholding statement of a QI. As a QI, you must provide

foreign partnership, or withholding foreign trust, check the a withholding statement to each withholding agent from

QI-EIN box and enter the EIN that was issued to you in such which you receive reportable amounts. The withholding

capacity (your “QI-EIN,” “WP-EIN,” or “WT-EIN”). If you are statement becomes an integral part of the Form W-8IMY

not acting in that capacity, you must use your U.S. taxpayer and, therefore, the certification statement that you sign in

identification number (TIN), if any, that is not your QI-EIN, Part VII of the form applies to the withholding statement as

WP-EIN, or WT-EIN. well as to the form. The withholding statement must:

-4-
• Designate those accounts for which you act as a QI, If you are acting on behalf of another NQI or on behalf of

• Designate those accounts for which you assumed primary a foreign partnership or foreign trust that is not a withholding

withholding responsibility under Chapter 3 of the Code and/ foreign partnership or a withholding foreign trust, you must

or primary Form 1099 reporting and backup withholding attach to your Form W-8IMY the Form W-8IMY of the other

responsibility, and NQI or the foreign partnership or the foreign trust together

• Provide information regarding withholding rate pools. with the withholding certificates and other documentation

attached to that Form W-8IMY. A withholding rate pool is a payment of a single type of

income, based on the categories of income reported on Withholding statement of an NQI. In addition to valid

Form 1042-S or Form 1099 (for example, interest or documentation of its customers, an NQI must provide a

dividends), that is subject to a single rate of withholding. The withholding statement to obtain reduced rates of withholding

withholding rate pool may be established by any reasonable for its customers and to avoid certain reporting

method agreed upon by you and the withholding agent. For responsibilities. The withholding statement must be provided

example, you may agree to establish a separate account for prior to a payment and becomes an integral part of the Form

a single withholding rate pool or you may agree to divide a W-8IMY and, therefore, the certification statement that you

payment made to a single account into portions allocable to sign in Part VII of the form applies to the withholding

each withholding rate pool. You must provide the statement as well as to the form. The withholding statement

withholding rate pool information that is required for the must:

withholding agent to meet its withholding and reporting • Contain the name, address, U.S. TIN (if any), and the

obligations. A withholding agent may request any type of documentation (documentary evidence, Form W-9,

information reasonably necessary to withhold and report or type of Form W-8) for every person for whom

payments correctly. documentation has been received and must state whether

that person is a U.S. exempt recipient, a U.S. non-exempt If you do not assume primary Form 1099 reporting and recipient, or a foreign person. The statement must indicate backup withholding responsibility, you must establish a whether a foreign person is a beneficial owner or an separate withholding rate pool for each U.S. non-exempt intermediary, flow-through entity, or U.S. branch and the recipient account holder disclosed to the withholding agent type of recipient, based on the recipient codes reported on unless the alternative procedure is used (see below). The Form 1042-S. withholding rate pools are based on valid documentation • Allocate each payment by income type to every payee for that you obtain under your withholding agreement with the whom documentation has been provided. The type of IRS or, if a payment cannot be reliably associated with valid income is based on the income codes reported on Form documentation, under the applicable presumption rules. 1042-S (or, if applicable, the income categories for Form

Alternative procedure for U.S. non-exempt recipients. 1099). If a payee receives income through another NQI,

If permitted by the QI withholding agreement with the IRS flow-through entity, or U.S. branch, your withholding

and if approved by the withholding agent, you may establish: certificate must also state the name, address, and U.S. TIN,

• A single withholding rate pool (not subject to backup if known, of the other NQI or U.S. branch from which the

withholding) for all U.S. non-exempt recipient account payee directly receives the payment or the flow-through

holders for whom you have provided Forms W-9 prior to the entity in which the payee has a direct ownership interest. If

withholding agent making any payments. Alternatively, you another NQI, flow-through entity, or U.S. branch fails to

may include such U.S. non-exempt recipients in a zero rate allocate a payment, you must provide, for that payment, the

withholding pool that includes U.S. exempt recipients and name of the NQI, flow-through entity, or U.S. branch that

foreign persons exempt from non-resident alien withholding failed to allocate the payment.

provided all the conditions of the alternative procedure are • If a payee is identified as a foreign person, you must

met, and specify the rate of withholding to which the payee is subject,

• A separate withholding rate pool (subject to backup the payee’s country of residence and, if a reduced rate of

withholding) for all U.S. non-exempt recipient account withholding is claimed, the basis for that reduced rate (for

holders for whom you have not provided Forms W-9 prior to example, treaty benefit, portfolio interest, exempt under

the withholding agent making any payments. section 501(c)(3), 892, or 895). The statement must also

include the U.S. TIN (if required) and, if the beneficial owner If you elect the alternative procedure, you must provide is not an individual and is claiming treaty benefits, state the information required by your QI withholding agreement whether the limitation on benefits and section 894 to the withholding agent not later than January 15 of the statements have been provided by the beneficial owner. You year following the year in which the payments are paid. must inform the withholding agent as to which payments Failure to provide this information may result in penalties those statements relate. under sections 6721 and 6722 and termination of your • Contain any other information the withholding agent withholding agreement with the IRS. requests in order to fulfill its withholding and reporting Updating the statement. The statement by which you obligations under Chapter 3 of the Code and/or Form 1099 identify the relevant withholding rate pools must be updated reporting and backup withholding responsibility. as often as is necessary to allow the withholding agent to Alternative procedure for NQIs. Under this procedure, withhold at the appropriate rate on each payment and to you may provide information allocating a payment of a correctly report the income to the IRS. The updated reportable amount to each payee (including U.S. exempt information becomes an integral part of Form W-8IMY. recipients) after a payment is made. To use the alternative

procedure you must inform the withholding agent on your Part III — Nonqualified Intermediary withholding statement that you are using the procedure and

If you are providing Form W-8IMY as a nonqualified the withholding agent must agree to the procedure.

intermediary (NQI), you must check box 10a. By checking This alternative procedure cannot be used for this box, you are certifying to all of the statements on line

10a. Check box 10b if you are using this form to transmit payments that are allocable to U.S. non-exempt

withholding certificates or other documentation. CAUTION recipients.

!

-5-
Under this procedure, you must provide a withholding Withholding statement of a U.S. branch not treated as a

agent with all the information required on the withholding U.S. person. If you checked box 13, you must provide the

statement (see Withholding statement of an NQI on this withholding agent with a written withholding statement. The

page) and all payee documentation, except the specific withholding statement becomes an integral part of the Form

allocation information for each payee, prior to the payment W-8IMY. The withholding statement must provide the same

of a reportable amount. In addition, you must provide the information outlined under Withholding statement of an NQI

withholding agent with withholding rate pool information. The on page 5.

withholding statement must assign each payee to a

withholding rate pool prior to the payment of a reportable Part V — Withholding Foreign amount. A withholding rate pool is a payment of a single

type of income, based on the income codes reported on Partnership or Withholding Foreign

Form 1042-S (for example, interest or dividends), that is Trust subject to a single rate of withholding. The withholding rate Check box 14 if you are a withholding foreign partnership or pool may be established by any reasonable method agreed a withholding foreign trust for the accounts for which you are upon by you and the withholding agent. For example, you

may agree to establish a separate account for a single providing this form and you are receiving the income from

those accounts on behalf of your partners, beneficiaries, or withholding rate pool, or you may agree to divide a payment

made to a single account into portions allocable to each owners. If you are not receiving the income on behalf of your

partners, beneficiaries, or owners, do not complete Part V. withholding rate pool. You must determine withholding rate Instead, complete Part II or Part III, whichever is pools based on valid documentation or, to the extent a appropriate. If you are a withholding foreign partnership or payment cannot be reliably associated with valid trust that is acting as a nonwithholding foreign partnership or documentation, the applicable presumption rules. trust for certain partners, beneficiaries, or owners, you must

You must provide the withholding agent with sufficient complete Part VI with respect to those partners,

beneficiaries, or owners. information to allocate the income in each withholding rate

pool to each payee (including U.S. exempt recipients) within If you are acting as a withholding foreign partnership or

the pool no later than January 31 of the year following the withholding foreign trust, you must assume primary

year of payment. If you fail to provide allocation information, withholding responsibility for all payments that are made to

if required, by January 31 for any withholding rate pool, you you for your partners, beneficiaries, or owners for which you

may not use this procedure for any payment made after that are required to act as a withholding foreign partnership or

date for all withholding rate pools. You may remedy your trust. Therefore, you are not required to provide information

failure to provide allocation information by providing the to the withholding agent regarding each partner’s,

information to the withholding agent no later than February beneficiary’s, or owner’s distributive share of the payment. If

14. See Regulations section 1.1441-1. you are also receiving payments from the same withholding

agent for persons other than your partners, beneficiaries, or

owners, you must provide a separate Form W-8IMY for Part IV — Certain United States those payments.

Branches Part VI — Nonwithholding Foreign

Line 11 Partnership, Simple Trust, or Grantor

Check the box to certify that you are either: Trust • A U.S. branch of a foreign bank subject to regulatory

supervision by the Federal Reserve Board or Check box 15 if you are a foreign partnership or a foreign

simple or grantor trust that is not a withholding foreign • A U.S. branch of a foreign insurance company required to partnership or a withholding foreign trust. Additionally, check file an annual statement on a form approved by the National box 15 if you are a withholding foreign partnership or trust Association of Insurance Commissioners with the insurance

acting as a nonwithholding foreign partnership or trust for department of a state, a territory, or the District of Columbia. certain partners, beneficiaries, or owners. By checking this

By checking the box you are also certifying that the box, you are certifying to both of the statements on line 15.

income you are receiving is not effectively connected with Note. If you are receiving income that is effectively

the conduct of your trade or business in the United States. connected with the conduct of a trade or business in the

You must provide your EIN on line 6 of Part I. United States, provide Form W-8ECI (instead of Form

W-8IMY).

Line 12 or 13 If you are not receiving the income on behalf of your

If you are one of the types of U.S. branches specified in the partners, beneficiaries, or owners, do not complete Part VI.

instructions for line 11 above, then you may choose to be Instead, complete Part II or Part III, whichever is

treated in one of two ways: appropriate.

1. Check box 12 if you have an agreement with the If you are acting on behalf of an NQI or another foreign

withholding agent to which you are providing this form to be partnership or foreign trust that is not a withholding foreign

treated as a U.S. person. In this case, you will be treated as partnership or a withholding foreign trust, you must

a U.S. person. Therefore, you will receive the payment free associate with your Form W-8IMY the Form W-8IMY of the

of Chapter 3 withholding but you will yourself be responsible other foreign partnership or foreign trust together with the

for Chapter 3 withholding and backup withholding for any withholding certificates and other documentation attached to

payments you make or credit to the account of persons for that other form.

whom you are receiving the payment. Withholding statement of nonwithholding foreign

2. Check box 13 if you do not have an agreement with partnership or nonwithholding foreign trust. You must

the withholding agent to be treated as a U.S. person. provide the withholding agent with a written withholding

-6-
statement to obtain reduced rates of withholding and relief

from certain reporting obligations. The withholding statement Paperwork Reduction Act Notice. We ask for the

becomes an integral part of the Form W-8IMY. The information on this form to carry out the Internal Revenue

withholding statement must provide the same information laws of the United States. If you are acting in any capacity

outlined under Withholding statement of an NQI on page 5. described in these instructions, you are required to give us

Certain smaller and related partnerships and trusts. If the information. We need it to ensure that you are complying

you are a foreign partnership or foreign simple or grantor with these laws and to allow us to figure and collect the right

amount of tax. trust to which a QI is applying the rules of Section 4A.01 of

the QI agreement, or to which a WP or WT is applying the You are not required to provide the information requested

rules of Section 10.01 of the WP or WT agreement (relating on a form that is subject to the Paperwork Reduction Act

to certain smaller partnerships and trusts), you must provide unless the form displays a valid OMB control number. Books

the QI, WP, or WT with a Form W-8IMY; a Form W-8 from or records relating to a form or its instructions must be

each of your partners, beneficiaries, or owners; and a retained as long as their contents may become material in

withholding statement. The withholding statement must the administration of any Internal Revenue law. Generally,

provide the same information outlined under Withholding tax returns and return information are confidential, as

statement of an NQI on page 5, except that it does not need required by section 6103.

any allocation information. The time needed to complete and file this form will vary

If you are a foreign partnership or foreign simple or depending on individual circumstances. The estimated

grantor trust to which a QI is applying the rules of Section average time is: Recordkeeping, 5 hr., 58 min.; Learning

4A.02 of the QI agreement, or to which a WP or WT is about the law or the form, 4 hr., 38 min.; Preparing the

applying the rules of Section 10.02 of the WP or WT form, 6 hr., 8 min.

agreement (relating to certain related partnerships and If you have comments concerning the accuracy of these trusts), you must provide the QI, WP, or WT with a Form time estimates or suggestions for making this form simpler, W-8IMY and a withholding statement. The withholding we would be happy to hear from you. You can email us at statement must provide the same information outlined under *taxforms@irs.gov. Please put “Forms Comment” on the Withholding statement of an NQI on page 5 except that it subject line. Or you can write to Internal Revenue Service, may include pooled basis information regarding direct Tax Products Coordinating Committee, partners, beneficiaries, or owners that are not SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, intermediaries, flow-through entities, or U.S. non-exempt IR-6406, Washington, DC 20224. Do not send Form recipients. W-8IMY to this office. Instead, give it to your withholding

See Rev. Proc. 2003-64 for rules regarding certain agent.

smaller and related partnerships or trusts. You can find Rev.

Proc. 2003-64 on page 306 of Internal Revenue Bulletin

(IRB) 2003-32 at www.irs.gov/pub/irs-irbs/irb03-32.pdf. Also

see Rev. Proc. 2004-21 (IRB 2004–14).

Part VII — Certification

Form W-8IMY must be signed and dated by a person

authorized to sign a declaration under penalties of perjury

on behalf of the person whose name is on the form.

-7-
Do you want to allow another person to discuss this return with the IRS (see page 4)?

Annual W ithholding T ax Retur n for OMB No. 1545-0096

U.S. Sour ce Income of For eign Persons Form 1042

Department of the Treasury

Internal Revenue Service © See instructions.

Name of withholding agent Employer identification number

Number, street, and room or suite no. (if a P.O. box, see instructions)

For IRS Use Only

CC FD

RD FF

City or town, province or state, and country (including postal code)

CAF FP

CR I

EDC SIC

62 For all Form(s) 1042-S and 1000: a Gross income paid b Taxes withheld or assumed

64 Total paid by federal tax deposit coupons or by electronic funds 

transfer (or with a request for an extension of time to file) for 2008 64

65 Enter overpayment applied as a credit from 2007 Form 1042 65

67 Total payments. Add lines 64 through 66 © 67

68 If line 63c is larger than line 67, enter balance due here 68

69 If line 67 is larger than line 63c, enter overpayment here 69

71 Apply overpayment on line 69 to (check one): Credit on 2009 Form 1042 or Refund

If you will not be liable for returns in the future, check here ©

For Privacy Act and Paperwork Reduction Act Notice, see the instructions. Cat. No. 11384V Form 1042 (2008)

Check here if you made quarter-monthly deposits using the 90% rule (see Deposit Requirements in the instructions) ©

If this is an amended return, check here ©

Enter date final income paid ©

Check if you are a:

66 Credit for amounts withheld by other withholding agents (see page 4) 66

63a Total tax liability (add monthly total lines from above) 63a

63b

Total net tax liability (combine lines 63a and 63b) © 63c

b Adjustments (see page 4) 

c

70 Penalty for failure to deposit tax when due. Also include on line 68 or line 69 (see page 4) 70

Record of Federal Tax Liability (Do not show federal tax deposits here.)

Tax liability for period

(including any taxes assumed

on Form(s) 1000)

Period

ending

Line

No.

1 7 41 7

2 15 42 15 Jan. Sept. 3 22 43 22

4 31 44 30

5 Jan. total 45 Sept. total

6 7 46 7

7 15 47 15 Feb. Oct. 8 22 48 22

9 29 49 31

10 Feb. total 50 Oct. total

11 7 31 7 51 7

12 15 32 15 52 15 Mar. July Nov. 13 22 33 22 53 22

14 31 34 31 54 30

15 Mar. total 35 July total 55 Nov. total

16 7 36 7 56 7

17 15 37 15 57 15 Apr. Aug. Dec. 18 22 38 22 58 22

19 30 39 31 59 31

20 Apr. total 40 Aug. total 60 Dec. total

21 7

22 15 May 23 22

24 31

25 May total

26 7

27 15 June 28 22

29 30

30 June total

Tax liability for period

(including any taxes assumed

on Form(s) 1000)

Period

ending

Line

No.

Tax liability for period

(including any taxes assumed

on Form(s) 1000)

Period

ending

Line

No.

61 No. of Forms 1042-S filed: a On paper b Electronically 

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and Sign belief, it is true, correct, and complete. Declaration of preparer (other than withholding agent) is based on all information of which preparer has any knowledge.

Here Your Date

signature

Date Preparer’s SSN or PTIN Preparer’s

signature Check if

self-employed © Paid

Preparer’s

Use Only Firm’s name (or

yours if self-employed),

address, and ZIP code

EIN ©

Phone no.

©

©

Capacity in which acting ©

© Daytime phone number ©

QI/Withholding foreign partnership or trust NQI/Flow-through entity (See instructions.)

Designee’s

name ©

Third Party

Designee Phone

no. ©

Yes. Complete the following. No

Personal identification

number (PIN) ©

(77) 2008
General Instructions

Purpose of Form

Use Form 1042 to report tax withheld on

certain income of foreign persons,

including nonresident aliens, foreign

partnerships, foreign corporations, foreign

estates, and foreign trusts.

Who Must File

Every withholding agent or intermediary

(see definitions below) who receives,

controls, has custody of, disposes of, or

pays any fixed or determinable annual or

periodical income must file an annual

return for the preceding calendar year on

Form 1042. Also, any PTP or nominee

making a distribution of ECI under section

1446 must file Form 1042 for the preceding

calendar year.

Where and When To File

File Form 1042 with the Ogden Service

Center, P.O. Box 409101, Ogden, UT

84409, by March 16, 2009. Use Form

1042-T to transmit paper Forms 1042-S.

Extension of time to file. If you need

more time to file Form 1042, you may

submit Form 7004, Application for

Automatic Extension of Time To File

Certain Business Income Tax, Information,

and Other Returns.

Withholding Agent

Any person required to withhold tax is a

withholding agent. A withholding agent

may be an individual, trust, estate,

partnership, corporation, nominee (under

section 1446), government agency,

association, or tax-exempt foundation,

whether domestic or foreign.

Section references are to the Internal

Revenue Code unless otherwise noted.

Income Tax Withholding on

Wages, Pensions, Annuities,

and Certain Other Deferred

Income

Use Form 941, Employer’s QUARTERLY

Federal Tax Return, to report income tax

withheld and social security and Medicare

taxes on wages paid to a nonresident alien

employee.

Form 1042 (2008) Page 2

Additional Information

For details on withholding of tax, see Pub.

515. You can get Pub. 515 by calling

1-800-TAX-FORM (1-800-829-3676) or by

downloading it from the IRS website at

www.irs.gov.

Every person required to deduct

and withhold any tax under

Chapter 3 of the Code is liable

for such tax. See section 1461.

Use Schedule H (Form 1040), Household

Employment Taxes, to report income tax

withheld and social security and Medicare

taxes on wages paid to a nonresident alien

household employee.

You must file Form 1042 if either of the

following apply.

● You are required to file Form(s) 1042-S

(whether or not any tax was withheld or

was required to be withheld). File Form

1042 even if you file Forms 1042-S

electronically.

● You pay gross investment income to

foreign private foundations that are subject

to tax under section 4948(a).

The amount of tax you are required to

withhold determines the frequency of your

deposits. The following rules explain how

often deposits must be made.

1. If at the end of any quarter-monthly

period the total amount of undeposited

taxes is $2,000 or more, you must deposit

the taxes within 3 banking days after the

end of the quarter-monthly period. (A

quarter-monthly period ends on the 7th,

15th, 22nd, and last day of the month.) To

determine banking days, do not count

Saturdays, Sundays, legal holidays, or any

local holidays observed by authorized

financial institutions.

Form 7004 does not extend the time for

payment of tax.

This deposit rule is considered met if:

● You deposit at least 90% of the actual

tax liability for the deposit period, and

● If the quarter-monthly period is in a

month other than December, you deposit

any underpayment with your first deposit

that is required to be made after the 15th

day of the following month. Any

underpayment of $200 or more for a

quarter-monthly period ending in

December must be deposited by

January 31.

2. If at the end of any month the total

amount of undeposited taxes is at least

$200 but less than $2,000, you must

deposit the taxes within 15 days after the

end of the month. If you make a deposit of

$2,000 or more during any month except

December under rule 1 above, carry over

any end-of-the-month balance of less than

$2,000 to the next month. If you make a

deposit of $2,000 or more during

December, any end-of-December balance

of less than $2,000 should be remitted with

your Form 1042 by March 16, 2009.

Intermediary

An intermediary is a person who acts as a

custodian, broker, nominee, or otherwise

as an agent for another person, regardless

of whether that other person is the

beneficial owner of the amount paid, a

flow-through entity, or another

intermediary.

indicate its status as a QI on a Form

W-8IMY submitted to a withholding agent.

For information on a QI withholding

agreement, see Rev. Proc. 2000-12, which

is on page 387 of Internal Revenue Bulletin

(IRB) 2000-4 at

www.irs.gov/pub/irs-irbs/irb00-04.pdf. Also

see Notice 2001-4 (IRB 2001-2), as

amended; Rev. Proc. 2003-64, Appendix 3

(IRB 2003-32); Rev. Proc. 2004-21 (IRB

2004-14); and Rev. Proc. 2005-77 (IRB

2005-51).

Nonqualified intermediary (NQI). An NQI

is any intermediary that is not a U.S.

person and that is not a QI.

Withholding foreign partnership (WP) or

withholding foreign trust (WT). A WP or

WT is a foreign partnership or trust that

has entered into a withholding agreement

with the IRS in which it agrees to assume

primary withholding responsibility for all

payments that are made to it for its

partners, beneficiaries, or owners. For

information on these withholding

agreements, see Rev. Proc. 2003-64,

which is on page 306 of Internal Revenue

Bulletin (IRB) 2003-32 at

www.irs.gov/pub/irs-irbs/irb03-32.pdf. Also

see Rev. Proc. 2004-21 (IRB 2004-14) and

Rev. Proc. 2005-77 (IRB 2005-51).

Deposit Requirements

Generally, if you are not required to use

the Electronic Federal Tax Payment

System (EFTPS), you must deposit the tax

withheld and required to be shown on

Form 1042 with an authorized financial

institution using your preprinted Form

8109, Federal Tax Deposit Coupon. Do not

use anyone else’s coupons. If you do not

have your coupons when a deposit is due,

call 1-800-829-4933, if you are in the

United States. If overseas, call

215-516-2000 (not a toll-free number). You

may also contact your local IRS office. To

avoid a penalty, do not mail your deposits

directly to the IRS.

CAUTION

Publicly traded partnerships (section

1446 withholding tax). For purposes of

reporting on Form 1042, a publicly traded

partnership (PTP) must withhold section

1446 tax on distributions of effectively

connected income (ECI) to its foreign

partners. A nominee that receives a

distribution of ECI from a PTP and is

treated as the withholding agent must use

Form 1042 to report the tax withheld. For

this purpose, a nominee is a domestic

person holding an interest in the PTP on

behalf of one or more foreign partners. For

more information, see Regulations section

1.1446-4 and Pub. 515, Withholding of Tax

on Nonresident Aliens and Foreign Entities.

Use Form 945, Annual Return of

Withheld Federal Income Tax, to report

income tax withheld under section 3405

from pensions, annuities, and certain other

deferred income paid to a nonresident

alien individual. However, if the recipient

has elected under section 3405(a)(2) or

(b)(2) not to have withholding under section

3405, these payments are subject to

withholding under section 1441 and the tax

withheld must be reported using Forms

1042 and 1042-S.

3. If at the end of a calendar year the

total amount of undeposited taxes is less

than $200, you may either pay the taxes

with your Form 1042 or deposit the entire

amount by March 16, 2009.

Note. If you are requesting an extension of

time to file using Form 7004, follow these

rules to see if you must make a deposit of

any balance due or if you can pay it with

Form 7004. See Form 7004 and its

instructions for more information. Qualified intermediary (QI). A QI is an

intermediary that is a party to a withholding

agreement with the IRS. An entity must
Interest and Penalties

If you file Form 1042 late, or fail to pay or

deposit the tax when due, you may be

liable for penalties and interest unless you

can show that the failure to file or pay was

due to reasonable cause and not willful

neglect.

Form 1042 (2008) Page 3

Late filing of Form 1042. The penalty for

not filing Form 1042 when due (including

extensions) is 5% of the unpaid tax for

each month or part of a month the return

is late, up to a maximum of 25% of the

unpaid tax.

Late payment of tax. The penalty for not

paying tax when due is usually 1⁄2 of 1%

of the unpaid tax for each month or part of

a month the tax is unpaid. The penalty

cannot exceed 25% of the unpaid tax.

Failure to deposit tax when due. See the

instructions for line 70 on page 4.

Specific Instructions

File only one Form 1042

consolidating all Form 1042-S

recipient information, regardless

of the number of different

clients, branches, divisions, or types of

income for which you are the withholding

agent. However, if you are acting in more

than one capacity (for example, you are

acting as a QI for certain designated

accounts and as an NQI for other

accounts), file a separate Form 1042 for

each capacity in which you are acting.

Address. Include the suite, room, or other

unit number after the street address. If

your post office does not deliver mail to

the street address and you have a P.O.

box, show the box number instead of the

street address.

QI and NQI checkboxes. See page 2 for

definitions of intermediary, qualified

intermediary (QI), withholding foreign

partnership (WP), withholding foreign trust

(WT), and nonqualified intermediary (NQI).

See the Form 1042-S instructions for

definitions of U.S. branch treated as a U.S.

person and flow-through entity.

file, negligence, fraud, and substantial

understatements of tax from the due date

(including extensions) to the date of

payment. Interest is figured at a rate

determined under section 6621.

If you prefer you may mail your coupon

and payment to:

Financial Agent

Federal Tax Deposit Processing

P.O. Box 970030

St. Louis, MO 63197 U.S.A.

If you include interest or penalties (other

than the penalty for failure to deposit tax

when due) with your payment, identify and

enter the amount in the bottom margin of

Form 1042, page 1. Do not include interest

or penalties (other than the penalty for

failure to deposit tax when due) in the

balance due on line 68.

Employer identification number (EIN).

You are generally required to enter your

EIN. However, if you are filing Form 1042 as

a QI, withholding foreign partnership, or

withholding foreign trust, enter your QI-EIN,

WP-EIN, or WT-EIN. Also, be sure to check

the “QI/Withholding foreign partnership or

trust” box. See QI and NQI checkboxes

below.

Completing Form 8109. If you do not use

EFTPS, deposit your income tax payments

using Form 8109. In most cases, you will

fill out a Form 8109 following the

instructions in the coupon book. However,

if a deposit liability arises from a

distribution reportable on Form 1042 for

the prior year, darken the 4th quarter

space on Form 8109. If the distribution is

reportable for the current year, darken the

1st quarter space. In all cases, follow the

coupon book instructions for completing

the rest of the deposit coupon. To ensure

proper crediting, write your taxpayer

identification number, the period to which

the tax deposit applies, and “Form 1042” 

on the check or money order.

Depositing on time. For deposits made

by EFTPS to be on time, you must initiate

the transaction at least one business day

before the date the deposit is due. Other penalties. Penalties may be

imposed for negligence, substantial

understatement of tax, and fraud. See

sections 6662 and 6663.

Lines 1 through 60. Except as otherwise

provided in these instructions, include tax

liability for the period in which the income

was distributed. Do not enter any negative

amounts on these lines.

Check the “QI/Withholding foreign

partnership or trust” box on page 1 if you

are a QI, WP, WT, or a U.S. branch treated

as a U.S. person. Check the

“NQI/Flow-through entity” box if you are an

NQI or a flow-through entity.

If you are a QI that did not assume

primary withholding responsibility, enter the

total amount withheld by the U.S.

withholding agent(s) on line 59. Report all

other amounts (that is, amounts you

actually withheld) on the line that

corresponds with the date the liability was

incurred.

If you are required to use EFTPS and fail

to do so, you may be subject to a 10%

penalty. If you are not required to use

EFTPS, you may participate voluntarily. To

enroll in or get more information about

EFTPS, call 1-800-555-4477. You can also

visit the EFTPS website at www.eftps.gov.

CAUTION

Rounding off to whole dollars. You may

round off cents to whole dollars. If you do

round to whole dollars, you must round all

amounts. To round off amounts to the

nearest whole dollar, drop amounts under

50 cents and increase amounts from 50 to

99 cents to the next dollar. For example,

$1.39 becomes $1 and $2.50 becomes

$3. If you have to add two or more

amounts to figure the amount to enter on

a line, include cents when adding and

only round off the total.

Electronic deposit requirement. You

must make electronic deposits of all

depository tax liabilities using the

Electronic Federal Tax Payment System

(EFTPS) in 2009 if:

● The total deposits of such taxes in 2007

were more than $200,000, or

● You were required to use EFTPS in

2008.

If you repaid the recipient for an amount

overwithheld by reducing the amount

withheld on a later payment, report the

reduced amount on these lines. If you used

the reimbursement procedure for

overwithheld amounts, see Pub. 515.

You do not have to figure the

amount of any interest or

penalties you may owe. Because

figuring these amounts can be

complicated, we will do it for you if you

want. We will send you a bill for any

amount due.

TIP

Make your check or money order

payable to “Financial Agent.”

If you do not have an EIN, you can

apply for one online at

www.irs.gov/businesses or by telephone at

1-800-829-4933. Also, you can file Form

SS-4, Application for Employer

Identification Number, by fax or mail. File

amended Forms 1042-S when you receive

your EIN.

To get a QI-EIN, WP-EIN, or WT-EIN,

submit Form SS-4 with your application for

that status. Do not send an application for

a QI-EIN, WP-EIN, or WT-EIN to the

addresses listed in the Instructions for

Form SS-4.

A domestic partnership that has not

distributed a foreign partner’s distributive

share of income subject to withholding

under section 1441 must withhold tax on

any income not distributed by the date on

which the Schedule K-1 is sent or

otherwise furnished to the foreign partner

(or, if earlier, the due date for furnishing

Schedule K-1 to the partner). Include such

tax for the period that includes the date

the tax was required to be withheld.

Do not include on lines 1 through 60 any

tax liability attributable to adjustments of

underwithheld tax on corporate

distributions made in calendar year 2008 if:

● The distributing corporation made a

reasonable estimate of accumulated and

current earnings and profits under

Regulations section 1.1441-3(c)(2)(ii)(A) and

● The distributing corporation or

intermediary paid over the underwithheld

tax by March 16, 2009.

Instead, include these payments of

underwithheld tax on line 63b.

Line 61. Enter the number of Forms

1042-S filed on paper and electronically.

Lines 62a and 62b. Enter the amounts

requested with respect to all Forms 1042-S

(regardless of whether the form was filed

electronically or on paper) and with respect

to all Forms 1000, Ownership Certificate.

Interest. Interest is charged on taxes not

paid by the due date, even if an extension

of time to file is granted. Interest is also

charged on penalties imposed for failure to
Form 1042 (2008) Page 4

Lines 69 and 71. You may claim an

overpayment shown on line 69 as a refund

or a credit. Check the applicable box on

line 71 to show which you are claiming. If

you claim a credit, it can reduce your

required deposits of withheld tax for 2009.

If you are also amending Form(s)

1042-S, see Amended Returns in the Form

1042-S instructions.

Do not amend Form 1042 to recover

taxes overwithheld in the prior year. For

more information, see Adjustment for

Overwithholding in Pub. 515.

Privacy Act and Paperwork Reduction

Act Notice. We ask for the information on

this form to carry out the Internal Revenue

laws of the United States. Sections 1441,

1442, and 1446 (for PTPs) require

withholding agents to report and pay over

to the IRS taxes withheld from certain U.S.

source income of foreign persons. Form

1042 is used to report the amount of

withholding that must be paid over. Form

1042-S is used to report the amount of

income and withholding to the payee.

Section 6109 requires you to provide your

employer identification number. Routine

uses of this information include giving it to

the Department of Justice for civil and

criminal litigation, and cities, states, and

the District of Columbia for use in

administering their tax laws. We may also

disclose this information to other countries

under a tax treaty, to federal and state

agencies to enforce federal nontax criminal

laws, or to federal law enforcement and

intelligence agencies to combat terrorism.

If you fail to provide this information in a

timely manner, you may be liable for

penalties and interest.

The time needed to complete and file

these forms will vary depending on

individual circumstances. The estimated

average time is: Recordkeeping, 9 hr., 48

min.; Learning about the law or the form,

2 hr., 25 min.; Preparing the form, 4 hr.,

33 min.; and Copying, assembling, and

sending the form to the IRS, 32 min.

If you have comments concerning the

accuracy of these time estimates or

suggestions for making this form simpler,

we would be happy to hear from you. You

can write to the Internal Revenue Service,

Tax Products Coordinating Committee,

SE:W:CAR:MP:T:T:SP, 1111 Constitution

Ave. NW, IR-6526, Washington, DC 20224.

Do not send the form to this address.

Instead, see Where and When To File on

page 2.

You are not required to provide the

information requested on a form that is

subject to the Paperwork Reduction Act

unless the form displays a valid OMB

control number. Books or records relating

to a form or its instructions must be

retained as long as their contents may

become material in the administration of

any Internal Revenue law. Generally, tax

returns and return information are

confidential, as required by section 6103.

If you are a QI requesting a

refund, you must attach the

corresponding Form(s) 1042-S

received to support the amount

Third Party Designee

If you want to allow any individual,

corporation, firm, organization, or

partnership to discuss your 2008 Form

1042 with the IRS, check the “Yes” box in

the Third Party Designee section of the

return. Also, enter the name, phone

number, and any five numbers that the

designee chooses as his or her personal

identification number (PIN). The

authorization applies only to the tax form

upon which it appears.

You are not authorizing the designee to

receive any refund check, bind you to

anything (including additional tax liability),

or otherwise represent you before the IRS.

If you want to expand the designee’s

authorization, see Pub. 947, Practice

Before the IRS and Power of Attorney.

By checking the “Yes” box, you are

authorizing the IRS to call the designee to

answer any questions relating to the

information reported on your tax return.

You are also authorizing the designee to:

● Exchange information concerning your

tax return with the IRS, and

● Request and receive written tax return

information relating to your tax return

including copies of specific notices,

correspondence, and account transcripts.

The authorization automatically expires

one year from the due date (without regard

to extensions) for filing your 2008 Form

1042. If you or your designee desire to

terminate the authorization, a written

statement conveying your wish to revoke

the authorization should be submitted to

the IRS service center where the return

was processed.

must complete the entire form, including all

filing information for the calendar year, and

sign the return. Attach a statement

explaining why you are filing an amended

return (for example, you are filing because

the tax liability for May was incorrectly

reported due to a mathematical error).

CAUTION

Line 66. You are permitted to take a

credit for amounts withheld by other

withholding agents that pertain to the

total net tax liability reported on line 63c.

For example, you are a QI and the

amount you entered on line 63c includes

amounts withheld by a U.S. withholding

agent. You may take a credit on line 66

for the amounts that were withheld by

the U.S. withholding agent. The amount

on line 66 should equal the sum of all

Forms 1042-S, box 8, that you file for

the year.

Line 63b. Include on line 63b any tax

liability attributable to adjustments of

underwithheld tax on corporate

distributions made in calendar year 2008 if:

Line 63a. The amount on line 63a must

equal the sum of the monthly totals as

listed on the Record of Federal Tax

Liability. Do not make any adjustments on

this line. Except for adjustments described

in the instructions for line 63b, you may

only make adjustments on the appropriate

entry line of the Record of Federal Tax

Liability.

● The tax assumed from Forms 1000.

If it does not, attach a statement to Form

1042 explaining the difference.

● The sum of all Forms 1042-S, box 9 (box

7 plus box 8), less

● The sum of all Forms 1042-S, box 10,

plus

Line 62b. The amount on line 62b

should equal: Line 70. The penalty for failure to deposit

tax applies to the amount underpaid when

the deposit was due. See Deposit

Requirements on page 2. The penalty rates

are 2% for deposits made 1 to 5 days late,

5% for deposits made 6 to 15 days late,

and 10% for deposits made 16 or more

days late. However, the penalty is 15% if

the tax is not deposited within 10 days after

the IRS issues the first notice demanding

payment. Add the penalty to any tax due

and enter the total on line 68. If you are due

a refund, subtract the penalty from the

overpayment you show on line 69.

Line 62a. The amount on line 62a should

equal the sum of all amounts shown on

Forms 1042-S, box 2, and all amounts

shown as gross interest paid on Forms

1000.

If you are a regulated investment

company (RIC) or a real estate investment

trust (REIT) that paid a dividend in January

subject to section 852(b)(7) or section

857(b)(9) (relating to certain dividends

declared in the preceding October,

November, or December), enter your

additional tax liability on those dividends

declared in 2008 but paid in January 2009

less any additional tax liability on those

dividends declared in 2007 but paid in

January 2008. Show any negative amount

in brackets. Attach a statement showing

your calculation.

● The distributing corporation made a

reasonable estimate of accumulated and

current earnings and profits under

Regulations section 1.1441-3(c)(2)(ii)(A) and

● The distributing corporation or

intermediary paid over the underwithheld

tax by March 16, 2009.

Be sure to reconcile amounts on

Form 1042 with amounts on

Forms 1042-S (including Forms

1042-S filed electronically), to

avoid unnecessary correspondence with

the IRS.

CAUTION

Line 64. Enter the total tax deposits you

made (including amounts paid with an

extension of time to file).

claimed on line 66. Failure to do so will

result in the denial of the refund or credit

being claimed. If you are a PTP or a

nominee withholding under section 1446,

the tax paid for a payee may only be

claimed as a credit by the payee.

Amended Return

If you have to make changes to your Form

1042 after you submit it, file an amended

Form 1042. Use a Form 1042 for the year

you are amending. Check the “Amended

Return” box at the top of the form. You

For information on other penalties, see

Interest and Penalties on page 3.
Foreign Person’s U.S. Source Income OMB No. 1545-0096

Subject to Withholding Form 1042-S

Copy A for

Internal Revenue Service Department of the Treasury

Internal Revenue Service

For Privacy Act and Paperwork Reduction Act Notice, see page 16 of the separate instructions.

Exemption Federal tax withheld

code

Withholding Net income

allowances

Tax

rate

Income 

code

WITHHOLDING AGENT’S name

Recipient’s U.S. TIN, if any ©

RECIPIENT’S name

Withholding agent’s EIN ©

NQI’s/FLOW-THROUGH ENTITY’S name

11 16

State income tax withheld

Recipient’s foreign tax identifying number, if any

19a

Payer’s state tax no.

1

13b

2

Cat. No. 11386R Form 1042-S (2009)

20

Name of state

21

AMENDED

Gross income 3 4 5 6 7

25

12a

23

13a

Country code

24

NQI’s/Entity’s address (number and street)

14

Country code

15

18

PAYER’S name and TIN (if different from withholding agent’s)

EIN QI-EIN

SSN or ITIN EIN QI-EIN

10 Amount repaid to recipient

PRO-RATA BASIS REPORTING

17

Recipient code NQI’s/Entity’s U.S. TIN, if any ©

12b Address (number and street)

12c Additional address line (room or suite no.)

12d City or town, province or state, country, ZIP or foreign postal code

13c Address (number and street)

13d Additional address line (room or suite no.)

19b Additional address line (room or suite no.)

19c City or town, province or state, country, ZIP or foreign postal code

13e City or town, province or state, country, ZIP or foreign postal code

8 Withholding by other agents

9 Total withholding credit

22 Recipient account number (optional)

2009
Foreign Person’s U.S. Source Income OMB No. 1545-0096

Subject to Withholding Form 1042-S

Copy B

for Recipient Department of the Treasury

Internal Revenue Service

For Privacy Act and Paperwork Reduction Act Notice, see page 16 of the separate instructions.

Withholding Net income Federal tax withheld

allowances

Income 

code

WITHHOLDING AGENT’S name

Recipient’s U.S. TIN, if any ©

RECIPIENT’S name

Withholding agent’s EIN ©

NQI’s/FLOW-THROUGH ENTITY’S name

11 16

State income tax withheld

Recipient’s foreign tax identifying number, if any

19a

Payer’s state tax no.

1

13b

2

Cat. No. 11386R Form 1042-S (2009)

20

Name of state

21

AMENDED

Gross income 3 4 7

25

12a

23

13a

Country code

24

NQI’s/Entity’s address (number and street)

14

Country code

15

18

PAYER’S name and TIN (if different from withholding agent’s)

EIN QI-EIN

SSN or ITIN EIN QI-EIN

10 Amount repaid to recipient

PRO-RATA BASIS REPORTING

17

Recipient code NQI’s/Entity’s U.S. TIN, if any ©

12b Address (number and street)

12c Additional address line (room or suite no.)

12d City or town, province or state, country, ZIP or foreign postal code

13c Address (number and street)

13d Additional address line (room or suite no.)

19b Additional address line (room or suite no.)

19c City or town, province or state, country, ZIP or foreign postal code

13e City or town, province or state, country, ZIP or foreign postal code

8 Withholding by other agents

9 Total withholding credit

22 Recipient account number (optional)

2009

Exemption 

code

Tax

rate

5 6
U.S. Income Tax Filing Requirements

Generally, every nonresident alien individual, nonresident alien

fiduciary, and foreign corporation with United States income,

including income that is effectively connected with the conduct of a

trade or business in the United States, must file a United States

income tax return. However, no return is required to be filed by a

nonresident alien individual, nonresident alien fiduciary, or a foreign

corporation if such person was not engaged in a trade or business in

the United States at any time during the tax year and if the tax

liability of such person was fully satisfied by the withholding of

United States tax at the source. (Corporations file Form 1120-F; all

others file Form 1040NR (or Form 1040NR-EZ if eligible).) You may

get the return forms and instructions at any United States Embassy

or consulate or by writing to: Internal Revenue Service, 1201 N.

Mitsubishi Motorway, Bloomington, IL 61705-6613

En règle générale, tout étranger non-résident, tout organisme

fidéicommissaire étranger non-résident et toute société étrangère

percevant un revenu aux Etats-Unis, y compris tout revenu dérivé,

en fait, du fonctionnement d’un commerce ou d’une affaire aux

Etats-Unis, doit soumettre aux Etats-Unis, une déclaration d’impôt

sur le revenu. Cependant aucune déclaration d’impôt sur le revenu

n’est exigée d’un étranger non-résident, d’un organisme

fidéicommissaire étrange non-résident, ou d’une société étrangère

s’ils n’ont pris part à aucun commerce ou affaire aux Etats-Unis à

aucun moment pendant l’année fiscale et si les impôts dont ils sont

redevables, ont été entièrement acquittés par une retenue à la

source, de leur montant. (Les sociétés doivent faire leur déclaration

d’impôt en remplissant le formulaire 1120-F; tous les autres

redevables doivent remplir le formulaire 1040NR (ou 1040NR-EZ si

éligible).) On peut se procurer formulaires de déclarations d’impôts et

instructions dans toutes les Ambassades et tous les Consulats des

Etats-Unis. L’on peut également s’adresser pour tous

renseignements a: Internal Revenue Service, 1201 N. Mitsubishi

Motorway, Bloomington, IL 61705-6613

Por regla general, todo extranjero no residente, todo organismo

fideicomisario extranjero no residente y toda sociedad anónima

extranjera que reciba ingresos en los Estados Unidos, incluyendo

ingresos relacionados con la conducción de un negocio o comercio

dentro de los Estados Unidos, deberá presentar una declaración

estadounidense de impuestos sobre ingreso. Sin embargo, no se

requiere declaración alguna a un individuo extranjero, una sociedad

anónima extranjera u organismo fideicomisario extranjero no

residente, si tal persona no ha efectuado comercio o negocio en los

Estados Unidos durante el año fiscal y si la responsabilidad con los

impuestos de tal persona ha sido satisfecha plenamente mediante

retencion del impuesto de los Estados Unidos en la fuente. (Las

sociedades anónimas envian la Forma 1120-F; todos los demás

contribuyentes envian la Forma 1040NR (o la Forma 1040NR-EZ si le

corresponde).) Se podrán obtener formas e instrucciones en

cualquier Embajada o Consulado de los Estados Unidos o

escribiendo directamente a: Internal Revenue Service, 1201 N.

Mitsubishi Motorway, Bloomington, IL 61705-6613

Im allgemeinen muss jede ausländische Einzelperson, jeder

ausländische Bevollmächtigte und jede ausländische Gesellschaft mit

Einkommen in den Vereinigten Staaten, einschliesslich des

Einkommens, welches direkt mit der Ausübung von Handel oder

Gewerbe innerhalb der Staaten verbunden ist, eine

Einkommensteuererklärung der Vereinigten Staaten abgeben. Eine

Erklärung, muss jedoch nicht von Ausländern, ausländischen

Bevollmächtigten oder ausländischen Gesellschaften in den

Vereinigten Staaten eingereicht werden, falls eine solche Person

während des Steuerjahres kein Gewerbe oder Handel in den

Vereinigten Staaten ausgeübt hat und die Steuerschuld durch

Einbehaltung der Steuern der Vereinigten Staaten durch die

Einkommensquelle abgegolten ist. (Gesellschaften reichen den

Vordruck 1120-F ein; alle anderen reichen das Formblatt 1040NR

oder wenn passend das Formblatt 1040NR-EZ ein.)

Einkommensteuererklärungen und Instruktionen können bei den

Botschaften und Konsulaten der Vereiningten Staaten eingeholt

werden. Um weitere Informationen wende man sich bitte an: Internal

Revenue Service, 1201 N. Mitsubishi Motorway, Bloomington, IL

61705-6613
Copy C for Recipient

Attach to any Federal tax return you file

Foreign Person’s U.S. Source Income OMB No. 1545-0096

Subject to Withholding Form 1042-S

Department of the Treasury

Internal Revenue Service

For Privacy Act and Paperwork Reduction Act Notice, see page 16 of the separate instructions.

Withholding Net income Federal tax withheld

allowances

Income 

code

WITHHOLDING AGENT’S name

Recipient’s U.S. TIN, if any ©

RECIPIENT’S name

Withholding agent’s EIN ©

NQI’s/FLOW-THROUGH ENTITY’S name

11 16

State income tax withheld

Recipient’s foreign tax identifying number, if any

19a

Payer’s state tax no.

1

13b

2

Cat. No. 11386R Form 1042-S (2009)

20

Name of state

21

AMENDED

Gross income 3 4 7

25

12a

23

13a

Country code

24

NQI’s/Entity’s address (number and street)

14

Country code

15

18

PAYER’S name and TIN (if different from withholding agent’s)

EIN QI-EIN

SSN or ITIN EIN QI-EIN

10 Amount repaid to recipient

PRO-RATA BASIS REPORTING

17

Recipient code NQI’s/Entity’s U.S. TIN, if any ©

12b Address (number and street)

12c Additional address line (room or suite no.)

12d City or town, province or state, country, ZIP or foreign postal code

13c Address (number and street)

13d Additional address line (room or suite no.)

19b Additional address line (room or suite no.)

19c City or town, province or state, country, ZIP or foreign postal code

13e City or town, province or state, country, ZIP or foreign postal code

8 Withholding by other agents

9 Total withholding credit

22 Recipient account number (optional)

2009

Exemption 

code

Tax

rate

5 6
Explanation of Codes

Box 1. Income code. Box 6. Exemption code (applies if the tax rate entered in box 5 is 00.00). Interest

Code Code Authority for Exemption

01 Interest paid by U.S. obligors—general 01 Income effectively connected with a U.S. trade or business 02 Interest paid on real property mortgages

03 Interest paid to controlling foreign corporations

04 Interest paid by foreign corporations

Exempt under an Internal Revenue Code section (income other than

portfolio interest)

02

05 Income is not from U.S. sources4 03

Dividends paid by U.S. corporations—general

Dividends qualifying for direct dividend rate

04 Exempt under tax treaty

Dividends paid by foreign corporations

06

Capital gains

Box 13b. Recipient code.

07

Industrial royalties

08

Motion picture or television copyright royalties

Code Type of Recipient

09

Other royalties (for example, copyright, recording, publishing)

Individual2 01

10

Real property income and natural resources royalties

Artist or athlete2 09

11

Pensions, annuities, alimony, and/or insurance premiums

03

12

Scholarship or fellowship grants

Trust

04 13

Compensation for independent personal services1

14

Compensation for dependent personal services1

Estate

05

15

Compensation for teaching1

Corporation2

10

16

Compensation during studying and training1

Government or international organization

02

17

Earnings as an artist or athlete2

Tax-exempt organization (IRC section 501(a))

06

18

Real estate investment trust (REIT) distributions of capital gains

Private foundation

07

19

Trust distributions subject to IRC section 1445

Unsevered growing crops and timber distributions by a trust subject

to IRC section 1445

20 U.S. branch treated as U.S. person

08

Qualified intermediary

11

27 Publicly traded partnership distributions subject to IRC section 1446

28 Gambling winnings

Substitute payment—other

36

If compensation that otherwise would be covered under Income Codes 16–19 is directly attributable to the recipient’s occupation as an artist or athlete, use Income Code 20 instead.

Use appropriate Interest Income Code for embedded interest in a notional principal contract.

05 Portfolio interest exempt under an Internal Revenue Code section

12

13

If Income Code 20 is used, Recipient Code 09 (artist or athlete) should be used instead of Recipient Code 01 (individual), 02 (corporation), or 03 (partnership other than withholding foreign

partnership).

Notional principal contract income

24

25

26

32

06 Qualified intermediary that assumes primary withholding responsibility

Withholding foreign partnership or withholding foreign trust

U.S. branch treated as a U.S. person

07

08

Partnership other than withholding foreign partnership2

Withholding foreign partnership or withholding foreign trust

Private arrangement intermediary withholding rate pool—general5

Private arrangement intermediary withholding rate pool—

exempt organizations5

Public pension fund

14

18

Interest on tax-free covenant bonds

09 Qualified intermediary represents income is exempt

29

30

31

Deposit interest

Original issue discount (OID)

Short-term OID

Qualified intermediary withholding rate pool—exempt organizations5 16

Dividend Other

May be used only by a qualified intermediary.

Non-U.S. source income received by a nonresident alien is not subject to U.S. tax. Use Exemption Code 03 when entering an amount for information reporting purposes only.

15 Qualified intermediary withholding rate pool—general5

17 Authorized foreign agent

Types of Income

33 Substitute payment—interest

34 Substitute payment—dividends

Capital gains distributions

Other income

35

50

20 Unknown recipient

Subject to 30% withholding rate unless the recipient is from one of the treaty countries listed under Gambling winnings (Income Code 28) in Pub. 515.

1

2

3

4

5

6

3

6

37 Return of capital
Copy D for Recipient

Attach to any state tax return you file

Foreign Person’s U.S. Source Income OMB No. 1545-0096

Subject to Withholding Form 1042-S

Department of the Treasury

Internal Revenue Service

For Privacy Act and Paperwork Reduction Act Notice, see page 16 of the separate instructions.

Withholding Net income Federal tax withheld

allowances

Income 

code

WITHHOLDING AGENT’S name

Recipient’s U.S. TIN, if any ©

RECIPIENT’S name

Withholding agent’s EIN ©

NQI’s/FLOW-THROUGH ENTITY’S name

11 16

State income tax withheld

Recipient’s foreign tax identifying number, if any

19a

Payer’s state tax no.

1

13b

2

Cat. No. 11386R Form 1042-S (2009)

20

Name of state

21

AMENDED

Gross income 3 4 7

25

12a

23

13a

Country code

24

NQI’s/Entity’s address (number and street)

14

Country code

15

18

PAYER’S name and TIN (if different from withholding agent’s)

EIN QI-EIN

SSN or ITIN EIN QI-EIN

10 Amount repaid to recipient

PRO-RATA BASIS REPORTING

17

Recipient code NQI’s/Entity’s U.S. TIN, if any ©

12b Address (number and street)

12c Additional address line (room or suite no.)

12d City or town, province or state, country, ZIP or foreign postal code

13c Address (number and street)

13d Additional address line (room or suite no.)

19b Additional address line (room or suite no.)

19c City or town, province or state, country, ZIP or foreign postal code

13e City or town, province or state, country, ZIP or foreign postal code

8 Withholding by other agents

9 Total withholding credit

22 Recipient account number (optional)

2009

Exemption 

code

Tax

rate

5 6
Foreign Person’s U.S. Source Income OMB No. 1545-0096

Subject to Withholding Form 1042-S

Copy E

for Withholding Agent Department of the Treasury

Internal Revenue Service

For Privacy Act and Paperwork Reduction Act Notice, see page 16 of the separate instructions.

Withholding Net income Federal tax withheld

allowances

Income 

code

WITHHOLDING AGENT’S name

Recipient’s U.S. TIN, if any ©

RECIPIENT’S name

Withholding agent’s EIN ©

NQI’s/FLOW-THROUGH ENTITY’S name

11 16

State income tax withheld

Recipient’s foreign tax identifying number, if any

19a

Payer’s state tax no.

1

13b

2

Cat. No. 11386R Form 1042-S (2009)

20

Name of state

21

AMENDED

Gross income 3 4 7

25

12a

23

13a

Country code

24

NQI’s/Entity’s address (number and street)

14

Country code

15

18

PAYER’S name and TIN (if different from withholding agent’s)

EIN QI-EIN

SSN or ITIN EIN QI-EIN

10 Amount repaid to recipient

PRO-RATA BASIS REPORTING

17

Recipient code NQI’s/Entity’s U.S. TIN, if any ©

12b Address (number and street)

12c Additional address line (room or suite no.)

12d City or town, province or state, country, ZIP or foreign postal code

13c Address (number and street)

13d Additional address line (room or suite no.)

19b Additional address line (room or suite no.)

19c City or town, province or state, country, ZIP or foreign postal code

13e City or town, province or state, country, ZIP or foreign postal code

8 Withholding by other agents

9 Total withholding credit

22 Recipient account number (optional)

2009

Exemption 

code

Tax

rate

5 6
Department of the Treasury 2008 Internal Revenue Service

Instructions for Form 1042-S

Foreign Person’s U.S. Source Income Subject to Withholding

Section references are to the Internal Every person required to deduct You must file a Form 1042-S even if

Revenue Code unless otherwise noted. and withhold any tax under you did not withhold tax because the CAUTION Chapter 3 of the Code is liable for income was exempt from tax under a U.S.

!

General Instructions such tax. tax treaty or the Code, including the

exemption for income that is effectively Copy A is filed with the Internal Use the 2008 Form 1042-S only connected with the conduct of a trade or Revenue Service. Copies B, C, and D are for income paid during 2008. Do business in the United States, or you for the recipient. Copy E is for your CAUTION not use the 2008 Form 1042-S for released the tax withheld to the recipient. !

records.

income paid during 2007. For exceptions, see Amounts That Are

Do not use Form 1042-S to report an Not Subject to Reporting on Form 1042-S

What’s New item required to be reported on— on page 5.

• Form W-2 (wages and other Amounts paid to bona fide residents of Changes to form. Changes have been compensation made to employees (other U.S. possessions and territories are not made to Form 1042-S for 2008. The than compensation for dependent subject to reporting on Form 1042-S if the major changes are as follows. personal services for which the beneficial beneficial owner of the income is a U.S.

owner is claiming treaty benefits) Boxes 7 through 9. These boxes citizen, national, or resident alien. including wages in the form of group-term are used to show the amount you life insurance), If you are required to file Form withheld, the amount withheld by other • Form 1099, or 1042-S, you must also file Form withholding agents, and the total amount CAUTION 1042, Annual Withholding Tax

! • Form 8288-A, Statement of Withholding of tax withheld. on Dispositions by Foreign Persons of Return for U.S. Source Income of Foreign

U.S. Real Property Interests, or Form Persons. See Form 1042 for more Box 15. This box is used to show

8805, Foreign Partner’s Information information. the recipient’s foreign tax identifying

number, if any. Statement of Section 1446 Withholding

Tax. Withholding agents otherwise Where, When, and

Box 22. This box is used to show required to report a distribution partly on a How To File the recipient’s account number (optional). Form 8288-A or Form 8805 and partly on Forms 1042-S, whether filed on paper or Qualified intermediary branch rule. a Form 1042-S may instead report the A electronically, must be filed with the entire amount on Form 8288-A or branch of a financial institution may not Internal Revenue Service by March 16, Form 8805. act as a qualified intermediary after 2009. You are also required to furnish December 31, 2007, in a country that Form 1042-S to the recipient of the does not have approved Who Must File income on or before March 16, 2009. know-your-customer rules. See Qualified Every withholding agent (defined on Send any paper Forms 1042-S with intermediary (QI), under Definitions, later. page 2) must file an information return on Form 1042-T, Annual Summary and Form 1042-S to report amounts paid Magnetic media. Beginning with tax Transmittal of Forms 1042-S, to the during the preceding calendar year that year 2008, processing year 2009, the IRS address in the Form 1042-T instructions.

no longer accepts tape cartridges. You are described under Amounts Subject to You must use Form 1042-T to transmit Reporting on Form 1042-S on page 4. cannot use magnetic media to file Form paper Forms 1042-S. Use a separate However, withholding agents who are 1042-S. Form 1042-T to transmit each type of individuals are not required to report a Form 1042-S. See Payments by U.S. payment on Form 1042-S if they are not Withholding Agents beginning on page 6 Reminders making the payment as part of their trade and the Form 1042-T instructions for

FIRE System. For files submitted on the or business and no withholding is more information. If you have 250 or more required to be made on the payment. For FIRE System, it is the responsibility of the Forms 1042-S to file, follow the example, an individual making a payment filer to check the status within 5 business instructions under Electronic Reporting on of interest that qualifies for the portfolio days to verify the results of the page 2. interest exception from withholding is not transmission. The IRS no longer mails Beginning with tax year 2008, required to report the payment if the error reports for files that are bad. portfolio interest is paid on a loan that is processing year 2009, Form

not connected to the individual’s trade or CAUTION 1042-S can no longer be filed

!

Purpose of Form business. However, an individual paying using magnetic media. Form 1042-S for

an amount that has actually been subject 2008 and later years can only be filed on Use Form 1042-S to report income paper or electronically. to withholding is required to report the described under Amounts Subject to

Reporting on Form 1042-S payment. Also, an individual paying an Extension of time to file. To request an on page 4 and amount on which withholding is required extension of time to file Forms 1042-S, to report amounts withheld under Chapter must report the payment, whether or not file Form 8809, Application for Extension 3 of the Internal Revenue Code. the individual actually withholds. See of Time To File Information Returns. See

Also use Form 1042-S to report Multiple Withholding Agent Rule on page the Form 8809 instructions for where to

distributions of effectively connected 11 for exceptions to reporting when file that form. You should request an

income by a publicly traded partnership or another person has reported the same extension as soon as you are aware that

nominee. See Publicly Traded payment to the recipient. Also see an extension is necessary, but no later

Partnerships (Section 1446 Withholding Publicly Traded Partnerships (Section than the due date for filing Form 1042-S.

Tax) on page 6. 1446 Withholding Tax) on page 6. By filing Form 8809, you will get an

Cat. No. 64278A
automatic 30-day extension to file Form of time to file (Form 8809), and hardship control, receipt, or custody of an amount

1042-S. If you need more time, a second waivers (Form 8508), see Pub. 1187. You subject to withholding or who can

Form 8809 may be submitted before the may also call the Information Reporting disburse or make payments of an amount

end of the initial extended due date. See Program at 866-455-7438 (toll-free) or subject to withholding. The withholding

Form 8809 for more information. 304-263-8700 (not a toll-free number) agent may be an individual, corporation,

Monday through Friday from 8:30 a.m. to partnership, trust, association, or any If you are requesting extensions of 4:30 p.m. Eastern Standard time. The other entity. The term withholding agent time to file for more than 50 Information Reporting Program may also also includes, but is not limited to, a CAUTION withholding agents or payers, you

!

be reached by fax at 304-264-5602 (not a qualified intermediary (QI), a nonqualified must submit the extension requests toll-free number). intermediary (NQI), a withholding foreign electronically. See Pub. 1187, partnership (WP), a withholding foreign Specifications for Filing Form 1042-S, This call site does not answer tax trust (WT), a flow-through entity, a U.S. Foreign Person’s U.S. Source Income law questions concerning the branch of a foreign insurance company or Subject to Withholding, Electronically or CAUTION requirements for withholding of tax

!

foreign bank that is treated as a U.S. Magnetically, for more information. on payments of U.S. source income to person, a nominee under section 1446, foreign persons under Chapter 3 of the Recipient copies. You may request and an authorized foreign agent. A Code. If you need such assistance, you an extension of time to provide the person may be a withholding agent even may call 215-516-2000 (not a toll-free statements to recipients by sending a if there is no requirement to withhold from number) from 6:00 a.m. to 11:00 p.m. letter to Enterprise Computing Center — a payment or even if another person has

Martinsburg, Information Reporting Eastern Standard time or write to: Internal already withheld the required amount Revenue Service, International Section, Program, Attn: Extension of Time from a payment. P.O. Box 920, Bensalem, PA Coordinator, 240 Murall Drive, 19020-8518. Generally, the U.S. person who pays Kearneysville, WV 25430. See Extension (or causes to be paid) the item of U.S. of Time To File in Pub. 515. Additional Information source income to a foreign person (or to

Electronic Reporting For more information on withholding of its agent) must withhold. However, other

tax, see Pub. 515, Withholding of Tax on persons may be required to withhold. For If you file 250 or more Forms 1042-S, you Nonresident Aliens and Foreign Entities. example, if a payment is made by a QI are required to submit them electronically. To order this publication and other (whether or not it assumes primary Electronic submissions are filed using publications and forms, call 1-800-TAX- withholding responsibility) that knows that the Filing Information Returns FORM (1-800-829-3676). You can also withholding was not done by the person Electronically (FIRE) System. The FIRE download forms and publications from the from which it received the payment, that System operates 24 hours a day, 7 days IRS website at www.irs.gov. QI is required to do the appropriate a week, at http://fire.irs.gov. For more withholding. In addition, withholding must information, see Pub. 1187. Record Retention be done by any QI that assumes primary

The electronic filing requirement Withholding agents should retain a copy withholding responsibility under Chapter 3

applies separately to original and of the information returns filed with the of the Code, a WP, a WT, a U.S. branch

amended returns. Any person, including a IRS, or have the ability to reconstruct the of a foreign insurance company or foreign

corporation, partnership, individual, data, for at least 3 years after the bank that agrees to be treated as a U.S.

estate, and trust, that is required to file reporting due date. person, or an authorized foreign agent.

250 or more Forms 1042-S must file such Finally, if a payment is made by an NQI or Substitute Forms returns electronically. The filing a flow-through entity that knows, or has The official Form 1042-S is the standard requirement applies individually to each reason to know, that withholding was not for substitute forms. Because a substitute reporting entity as defined by its separate done, that NQI or flow-through entity is form is a variation from the official form, taxpayer identification number (TIN). This required to withhold since it also falls you should know the requirements of the requirement applies separately to original within the definition of a withholding official form for the year of use before you and amended returns. For example, if you agent. modify it to meet your needs. The IRS have 300 original Forms 1042-S, they provides several means of obtaining the Authorized foreign agent. An agent is must be filed electronically. However, if most frequently used tax forms. These an authorized foreign agent only if all four 200 of those forms contained erroneous of the following apply. include the Internet and CD-ROM. For information, the amended returns may be details on the requirements of substitute 1. There is a written agreement filed on paper forms because the number forms, see Pub. 1179, General Rules and between the withholding agent and the of amended Forms 1042-S is less than Specifications for Substitute Forms 1096, foreign person acting as agent. the 250-or-more filing requirement. 1098, 1099, 5498, W-2G, and 1042-S. 2. The IRS International Section has

If you file electronically, do not file been notified of the appointment of the You are permitted to use the same returns on paper. agent before the first payment for which substitute payee copies of Form CAUTION Duplicate filing may cause penalty the authorized agent acts on behalf of the

! CAUTION 1042-S (that is, copies B, C, and

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notices to be generated. withholding agent. (This notification must D) that contain more than one type of Note. Even though as many as 249 be sent to the following address: Internal income. This will reduce the number of

Forms 1042-S may be submitted on Revenue Service, International Section, Forms 1042-S you send to the recipient. paper to the IRS, the IRS encourages P.O. Box 920, Bensalem, PA Under no circumstances, however, may 19020-8518.) filers to transmit forms electronically. the copy of the form filed with the IRS 3. The books and records and Hardship waiver. To receive a hardship (copy A) contain more than one type of relevant personnel of the foreign agent waiver from the required filing of Forms income. are available to the IRS so that the IRS 1042-S electronically, submit Form 8508, Deposit Requirements may evaluate the withholding agent’s Request for Waiver From Filing compliance with its withholding and For information and rules concerning Information Returns Electronically/ reporting obligations. Magnetically. Waiver requests should be federal tax deposits, see Depositing

Withheld Taxes 4. The U.S. withholding agent remains filed at least 45 days before the due date in Pub. 515 or the Form fully liable for the acts of its agent and 1042 instructions. of the returns. See Form 8508 for more does not assert any of the defenses that information. Definitions may otherwise be available.

Need assistance? For additional

information and instructions on filing Withholding agent. A withholding agent For further details, see Regulations

Forms 1042-S electronically, extensions is any person, U.S. or foreign, that has section 1.1441-7(c).

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Beneficial owner. For payments other income paid to the entity, whether or not obligations of the QI. See Section 4 of

than those for which a reduced rate of distributed, and must determine the Rev. Proc. 2000-12 for details.

withholding is claimed under an income character of the items of income as if they Non-exempt recipient. A non-exempt tax treaty, the beneficial owner of income were realized directly from the sources recipient is any person who is not an is, generally, the person who is required from which realized by the entity. For exempt recipient. under U.S. tax principles to include the example, partnerships, common trust

income in gross income on a tax return. A funds, and simple trusts or grantor trusts Nonresident alien individual. Any

person is not a beneficial owner of are generally considered to be fiscally individual who is not a citizen or resident

income, however, to the extent that transparent with respect to items of of the United States is a nonresident alien

person is receiving the income as a income received by them. individual. An alien individual meeting

nominee, agent, or custodian, or to the either the “green card test” or the Flow-through entity. A flow-through extent the person is a conduit whose “substantial presence test” for the entity is a foreign partnership (other than participation in a transaction is calendar year is a resident alien. Any a withholding foreign partnership), a disregarded. In the case of amounts paid person not meeting either test is a foreign simple or grantor trust (other than nonresident alien individual. Additionally, that do not constitute income, beneficial a withholding foreign trust), or, for any ownership is determined as if the an alien individual who is a resident of a payments for which a reduced rate of payment were income. foreign country under the residence withholding under an income tax treaty is article of an income tax treaty, or an alien Foreign partnerships, foreign simple claimed, any entity to the extent the entity individual who is a bona fide resident of trusts, and foreign grantor trusts are not is considered to be fiscally transparent Puerto Rico, Guam, the Commonwealth the beneficial owners of income paid to under section 894 with respect to the of the Northern Mariana Islands, the U.S. the partnership or trust. The beneficial payment by an interest holder’s Virgin Islands, or American Samoa, is a owners of income paid to a foreign jurisdiction. nonresident alien individual. See Pub. partnership are generally the partners in Foreign person. A foreign person 519, U.S. Tax Guide for Aliens, for more the partnership, provided that the partner includes a nonresident alien individual, a information on resident and nonresident is not itself a partnership, foreign simple foreign corporation, a foreign partnership, alien status. or grantor trust, nominee, or other agent. a foreign trust, a foreign estate, and any The beneficial owner of income paid to a Even though a nonresident alien other person that is not a U.S. person. foreign simple trust (a foreign trust that is individual married to a U.S. citizen The term also includes a foreign branch described in section 651(a)) is generally CAUTION or resident alien may choose to be

!

or office of a U.S. financial institution or the beneficiary of the trust, if the treated as a resident alien for certain U.S. clearing organization if the foreign beneficiary is not a foreign partnership, purposes (for example, filing a joint branch is a QI. Generally, a payment to a foreign simple or grantor trust, nominee, income tax return), such individual is still U.S. branch of a foreign person is a or other agent. The beneficial owner of a treated as a nonresident alien for payment to a foreign person. foreign grantor trust (a foreign trust to the withholding tax purposes. extent that all or a portion of the income Intermediary. An intermediary is a Payer. A payer is the person for whom of the trust is treated as owned by the person that acts as a custodian, broker, the withholding agent acts as a paying grantor or another person under sections nominee, or otherwise as an agent for agent pursuant to an agreement whereby 671 through 679) is the person treated as another person, regardless of whether the withholding agent agrees to withhold the owner of the trust. The beneficial that other person is the beneficial owner and report a payment. owner of income paid to a foreign of the amount paid, a flow-through entity,

complex trust (a foreign trust that is not a or another intermediary. Presumption rules. The presumption

foreign simple trust or foreign grantor rules are those rules prescribed under Qualified intermediary (QI). A QI is trust) is the trust itself. Chapter 3 and Chapter 61 of the Code an intermediary that is a party to a that a withholding agent must follow to The beneficial owner of income paid to withholding agreement with the IRS. An determine the status of a beneficial owner a foreign estate is the estate itself. entity must indicate its status as a QI on a (for example, as a U.S. person or a Form W-8IMY submitted to a withholding A payment to a U.S. partnership, U.S. foreign person) when it cannot reliably agent. For information on a QI withholding trust, or U.S. estate is not subject to 30% associate a payment with valid agreement, see Rev. Proc. 2000-12, foreign-person withholding. A U.S. documentation. See, for example, which is on page 387 of Internal Revenue partnership, trust, or estate should Regulations sections 1.1441-1(b)(3), Bulletin (IRB) 2000-4 at www.irs.gov/pub/ provide the withholding agent with a Form 1.1441-4(a), 1.1441-5(d) and (e), W-9, Request for Taxpayer Identification irs-irbs/irb00-04.pdf. Also see Notice 1.1441-9(b)(3), 1.1446-1(c)(3), and 2001-4 (IRB 2001-21), as amended; Rev. Number and Certification. These 1.6049-5(d). Also see Pub. 515. Proc. 2003-64, Appendix 3 (IRB beneficial owners rules generally apply for 2003-32); Rev. Proc. 2004-21 (IRB Publicly traded partnership (PTP). A purposes of section 1446; however, there 2004-14); and Rev. Proc. 2005-77 (IRB PTP is any partnership in which interests are exceptions. 2005-51). are regularly traded on an established Disregarded entity. A business entity securities market (regardless of the that has a single owner and is not a A branch of a financial institution may number of its partners). However, it does corporation under Regulations section not act as a QI in a country that does not not include a PTP treated as a

301.7701-2(b) is disregarded as an entity have approved know-your-customer corporation under section 7704. separate from its owner. (KYC) rules. Countries having approved

KYC rules are listed on the IRS website at Recipient. A recipient is any of the Exempt recipient. Generally, an exempt www.irs.gov. Branches that operate in following: recipient is any payee that is not required non-KYC approved jurisdictions are • A beneficial owner of income. to provide Form W-9 and is exempt from required to act as nonqualified • A QI. the Form 1099 reporting requirements. intermediaries. • A WP or WT. See the Instructions for the Requester of • An authorized foreign agent. Form W-9 for a list of exempt recipients. Nonqualified intermediary (NQI). An • A U.S. branch of certain foreign banks NQI is any intermediary that is not a U.S. Fiscally transparent entity. An entity is or insurance companies that is treated as person and that is not a QI. treated as fiscally transparent with a U.S. person.

respect to an item of income for which Private arrangement intermediary • A foreign partnership or a foreign trust

treaty benefits are claimed to the extent (PAI). A QI may enter into a private (other than a WP or WT), but only to the

that the interest holders in the entity must, arrangement with another intermediary extent the income is effectively connected

on a current basis, take into account under which the other intermediary with its conduct of a trade or business in

separately their shares of an item of generally agrees to perform all of the the United States.

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• A payee who is not known to be the 2003-64, which is on page 306 of Internal the United States even if no withholding

beneficial owner, but who is presumed to Revenue Bulletin (IRB) 2003-32 at www. certificate is required, as, for example,

be a foreign person under the irs.gov/pub/irs-irbs/irb03-32.pdf. Also see with income on notional principal

presumption rules. Rev. Proc. 2004-21 (IRB 2004-14) and contracts. Note that bank deposit interest,

• A PAI. Rev. Proc. 2005-77 (IRB 2005-51). which generally is not subject to Form

• A partner receiving a distribution of 1042-S reporting, is subject to Form

effectively connected income from a PTP 1042-S reporting if it is effectively Amounts Subject to or nominee. connected income. ECI of a PTP

A recipient does not include any of the Reporting on Form 1042-S distributed to a foreign partner must be

Amounts subject to reporting on Form reported on Form 1042-S. following: 1042-S are amounts paid to foreign • Notional principal contract income. • An NQI.

persons (including persons presumed to Income from notional principal contracts • A nonwithholding foreign partnership, if be foreign) that are subject to withholding, that the payer knows, or must presume, is the income is not effectively connected

with its conduct of a trade or business in even if no amount is deducted and effectively connected with the conduct of

withheld from the payment because of a a U.S. trade or business is subject to the United States.

treaty or Code exception to taxation or if reporting. The amount to be reported is • A disregarded entity. any amount withheld was repaid to the the amount of cash paid on the contract • A foreign trust that is described in payee. Amounts subject to withholding during the calendar year. Any amount of section 651(a) (a foreign simple trust) if are amounts from sources within the interest determined under the provisions the income is not effectively connected

with the conduct of a trade or business in United States that constitute (a) fixed or of Regulations section 1.446-3(g)(4)

determinable annual or periodical (FDAP) (dealing with interest in the case of a the United States.

income; (b) certain gains from the significant non-periodic payment) is • A foreign trust to the extent that all or a disposal of timber, coal, or domestic iron reportable as interest and not as notional portion of the trust is treated as owned by ore with a retained economic interest; and principal contract income. the grantor or other person under (c) gains relating to contingent payments • REMIC excess inclusions. Excess sections 671 through 679 (a foreign received from the sale or exchange of inclusions from REMICs (income code grantor trust). patents, copyrights, and similar intangible 02) and withheld tax must be reported on • A U.S. branch that is not treated as a

U.S. person unless the income is, or is property. Amounts subject to withholding Form 1042-S. A domestic partnership

also include distributions of effectively must separately state a partner’s treated as, effectively connected with the connected income by a publicly traded allocable share of REMIC taxable income conduct of a trade or business in the

United States. partnership. Amounts subject to reporting or net loss and the excess inclusion

amount on Schedule K-1 (Form 1065). If include, but are not limited to, the U.S. branch treated as a U.S. person. following U.S. source items. the partnership allocates all or some The following types of U.S. branches (of • Corporate distributions. The entire portion of its allocable share of REMIC foreign entities) may reach an agreement amount of a corporate distribution taxable income to a foreign partner, the with the withholding agent to treat the (whether actual or deemed) must be partner must include the partner’s branch as a U.S. person: (a) a U.S. allocated amount in income as if that reported, irrespective of any estimate of branch of a foreign bank subject to the portion of the distribution that amount was received on the earlier of the regulatory supervision by the Federal following dates. represents a taxable dividend. Any Reserve Board or (b) a U.S. branch of a distribution, however, that is treated as • The date of distribution by the foreign insurance company required to file gain from the redemption of stock is not partnership. an annual statement on a form approved an amount subject to withholding. For • The date the foreign partner disposes by the National Association of Insurance information on dividends paid by a of its indirect interest in the REMIC Commissioners with the Insurance qualified investment entity (QIE), see residual interest. Department of a State, Territory, or the Pub. 515. • The last day of the partnership’s tax District of Columbia. • year. Interest. This includes the portion of a

W-8IMY evidencing the agreement with

The U.S. branch must provide a Form notional principal contract payment that is The partnership must withhold tax on characterized as interest. the portion of the REMIC amount that is the withholding agent. • Rents. an excess inclusion.

A U.S. branch that is treated as a • Royalties. An excess inclusion allocated to the U.S. person is treated as such • Compensation for independent following foreign persons must be CAUTION solely for purposes of determining personal services performed in the !

included in that person’s income at the whether a payment is subject to United States. same time as other income from the entity withholding. The branch is, for purposes • Compensation for dependent is included in income. of information reporting, a foreign person personal services performed in the • Shareholder of a real estate investment and payments to such a branch must be United States (but only if the beneficial trust. owner is claiming treaty benefits). reported on Form 1042-S. • Shareholder of a regulated investment Withholding certificate. • Annuities. The term company. • Pension distributions and other “withholding certificate” generally refers to • Participant in a common trust fund. deferred income. Form W-8 or Form W-9. • Patron of a subchapter T cooperative • Most gambling winnings. However, Note. Throughout these instructions, a organization. proceeds from a wager placed in reference to or mention of “Form W-8” is blackjack, baccarat, craps, roulette, or • Students, teachers, and researchers. a reference to Forms W-8BEN, W-8ECI, big-6 wheel are not amounts subject to Amounts paid to foreign students, W-8EXP, and/or W-8IMY. reporting. trainees, teachers, or researchers as

Withholding foreign partnership (WP) • Cancellation of indebtedness. scholarship or fellowship income, and

or withholding foreign trust (WT). A Income from the cancellation of compensation for personal services

WP or WT is a foreign partnership or trust indebtedness must be reported unless the (whether or not exempt from tax under an

that has entered into a withholding withholding agent is unrelated to the income tax treaty), must be reported.

agreement with the IRS in which it agrees debtor and does not have knowledge of However, amounts that are exempt from

to assume primary withholding the facts that give rise to the payment. tax under section 117 are not subject to

responsibility for all payments that are • Effectively connected income (ECI). reporting.

made to it for its partners, beneficiaries, ECI includes amounts that are (or are • Amounts paid to foreign

or owners. For information on these presumed to be) effectively connected governments, foreign controlled banks

withholding agreements, see Rev. Proc. with the conduct of a trade or business in of issue, and international

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organizations. These amounts are 1042-S. You must also include a Form 1042-S reporting the amount of

subject to reporting even if they are statement that the information on the form bank deposit interest paid to each of X

exempt under section 892 or 895. is being furnished to the United States and Y and the proportionate amount of

• Foreign targeted registered Internal Revenue Service and may be withholding that occurred.

obligations. Interest paid on registered provided to the government of Canada.

obligations targeted to foreign markets Interest and OID from short-term Withholding on paid to a foreign person other than a

financial institution or a member of a obligations. Interest and OID from any Dispositions of U.S. Real obligation payable 183 days or less from clearing organization is an amount the date of original issue should not be Property Interests by subject to reporting. reported on Form 1042-S. • Original issue discount (OID) from Publicly Traded Trusts the redemption of an OID obligation. Registered obligations targeted to and Qualified Investment The amount subject to reporting is the foreign markets. Interest on a

amount of OID actually includible in the registered obligation that is targeted to Entities (QIEs) gross income of the foreign beneficial foreign markets and qualifies as portfolio In general, when a publicly traded trust owner of the income, if known. Otherwise, interest is not subject to reporting if it is makes a distribution to a foreign person the withholding agent should report the paid to a registered owner that is a attributable to the disposition of a U.S. entire amount of OID as if the recipient financial institution or member of a real property interest, it must withhold tax held the instrument from the date of clearing organization and you have under section 1445. However, this original issuance. See Pub. 1212, Guide received the required certifications. withholding liability is shifted to the person to Original Issue Discount (OID) Bearer obligations targeted to foreign who pays the distribution to a foreign Instruments. markets. Do not file Form 1042-S to person (or to the account of the foreign • Certain dispositions of U.S. real report interest not subject to withholding person) if the special notice requirement property interests. See Withholding on on bearer obligations if a Form W-8 is not of Regulations section 1.1445-8(f) and Dispositions of U.S. Real Property required. other requirements of Regulations section Interests by Publicly Traded Trusts and 1.1445-8(b)(1) are satisfied. Qualified Investment Entities (QIEs) Notional principal contract payments

beginning on this page. that are not ECI. Amounts paid on a The amount subject to withholding for notional principal contract that are not a distribution by a publicly traded trust is For more details on the types of effectively connected with the conduct of determined under the large trust rules of income that are subject to withholding, a trade or business in the United States Regulations section 1.1445-5(c)(3). see Pub. 515. should not be reported on Form 1042-S. The rate of withholding is as follows:

Amounts That Are Not Accrued interest and OID. Interest paid 1. Distribution by a publicly traded on obligations sold between interest Subject to Reporting trust that makes recurring sales of payment dates and the portion of the growing crops and timber—10%. on Form 1042-S purchase price of an OID obligation that is 2. Distribution by a publicly traded sold or exchanged in a transaction other trust not described in (1) above—35%. Interest on deposits. Generally, no than a redemption is not subject to

withholding (or reporting) is required on reporting unless the sale or exchange is Special rules apply to qualified interest paid to foreign persons on part of a plan, the principal purpose of investment entities (QIEs). A QIE is any deposits if such interest is not effectively which is to avoid tax, and the withholding real estate investment trust (REIT) or any connected with the conduct of a trade or agent has actual knowledge or reason to regulated investment company (RIC) that business in the United States. For this know of such plan. is a U.S. real property holding purpose, the term “deposits” means Exception for amounts previously corporation. Generally, any distribution amounts that are on deposit with a U.S. withheld upon. A withholding agent from a QIE attributable to gain from the bank, savings and loan association, credit should report on Form 1042-S any sale or exchange of a U.S. real property union, or similar institution, and from amounts, whether or not subject to interest is treated as such gain by the certain deposits with an insurance withholding, that are paid to a foreign nonresident alien, foreign corporation, or company. payee and that have been withheld upon, other QIE receiving the distribution. Exception for interest payments to including backup withholding, by another Canadian residents who are not U.S. A distribution by a QIE to a withholding agent under the presumption nonresident alien or foreign corporation citizens. If you pay $10 or more of U.S. rules. that is treated as gain from the sale or source bank deposit interest to a Example. A withholding agent (WA) exchange of a U.S. real property interest nonresident alien who is a resident of

Canada, you generally must report the makes a payment of bank deposit interest by the shareholder is subject to

to a foreign intermediary that is a withholding at 35%. interest on Form 1042-S. This reporting

requirement applies to interest on a nonqualified intermediary (NQI-B). NQI-B Any distribution by a QIE on stock failed to provide any information deposit maintained at a bank’s office in regularly traded on a securities market in the United States. However, this reporting regarding the beneficial owners to whom the United States is not treated as gain the payment was attributable. Under the requirement does not apply to interest from the sale or exchange of a U.S. real presumption rules, WA must presume paid on certain bearer certificates of property interest if the shareholder did not that the amounts are paid to a U.S. deposit if paid outside the United States. own more than 5% of that stock at any Although you only have to report non-exempt recipient. WA withholds 28% time during the 1-year period ending on of the payment under the backup payments you make to residents of the date of the distribution. These

Canada, you can comply by reporting withholding provisions of the Code and distributions are included in the files a Form 1099-INT reporting the bank deposit interest to all foreign shareholder’s gross income as a dividend interest as paid to an unknown recipient. persons if that is easier. (income code 06) from the QIE, not as A copy of Form 1099-INT is sent to When completing Form 1042-S, use long-term capital gain. NQI-B. The beneficial owners of the bank income code 29 in box 1 and exemption deposit interest are two customers of After 2007, a RIC will be treated as a code 02 in box 6. NQI-B, X and Y. Both X and Y have QIE only on distributions the RIC makes

On the statements furnished to the provided NQI-B with documentary to a nonresident alien or foreign

Canadian recipients, you must include an evidence establishing that they are corporation that are attributable to

information contact phone number in foreign persons and therefore not subject distributions the RIC received from a

addition to the name in box 12a on Form to backup withholding. NQI-B must file a REIT.

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At the time these instructions went These filers cannot use a single rate pool is a payment of a single type of

to print, Congress was considering Form 1042-S to report income if income, determined in accordance with CAUTION legislation that would extend the that income is reportable under the income codes used to file Form

! CAUTION!

QIE treatment for RICs. To find out if this different income, recipient, or exemption 1042-S, that is subject to a single rate of

legislation was enacted, see Pub. 515. codes, or is subject to different rates of withholding. A QI that does not assume

withholding. primary withholding responsibility Use Forms 1042-S and 1042 to report provides information regarding the A withholding agent may be permitted and pay over the withheld amounts. All proportions of income subject to a to use substitute payee copies of Form other withholding required under section particular withholding rate to the 1042-S (copies B, C, and D) that contain 1445 is reported and paid over using withholding agent on a withholding more than one type of income. See Form 8288, U.S. Withholding Tax Return statement associated with Form W-8IMY. Substitute Forms on page 2 for details. for Dispositions by Foreign Persons of A U.S. withholding agent making a U.S. Real Property Interests, and Form See Payments Made to Persons Who payment to a QI, WP, or WT must use 8288-A, Statement of Withholding on Are Not Recipients beginning on page 7 if recipient code 12 (qualified intermediary) Dispositions by Foreign Persons of U.S. the payment is made to a foreign person or 04 (withholding foreign partnership or Real Property Interests. that is not a recipient. withholding foreign trust). A U.S.

withholding agent must not use recipient For more information on reporting Payments to Recipients code 13 (private arrangement income from real property interests, see Payments directly to beneficial intermediary withholding rate pool— U.S. Real Property Interest in Pub. 515. owners. A U.S. withholding agent general), 14 (private arrangement

making a payment directly to a beneficial intermediary withholding rate pool—

Publicly Traded owner must complete Form 1042-S and exempt organizations), 15 (qualified

treat the beneficial owner as the recipient. intermediary withholding rate pool— Partnerships (Section Boxes 17 through 20 should be left blank. general), or 16 (qualified intermediary

1446 Withholding Tax) A U.S. withholding agent should complete withholding rate pool—exempt

box 21 only if it is completing Form organizations). Use of an inappropriate A publicly traded partnership (PTP) 1042-S as a paying agent acting pursuant recipient code may cause a notice to be (defined on page 3) that has effectively to an agreement. generated. connected income, gain, or loss must pay

a withholding tax on distributions of that Under a grace period rule, a U.S. A QI, WP, or WT is required to act

income made to its foreign partners and withholding agent may, under certain in such capacity only for

file Form 1042-S using income code 27. A circumstances, treat a payee as a foreign CAUTION designated accounts. Therefore,

!

nominee that receives a distribution of person while the withholding agent waits such an entity may also provide a Form

effectively connected income from a PTP for a valid withholding certificate. A U.S. W-8IMY in which it certifies that it is

is treated as the withholding agent to the withholding agent who relies on the grace acting as an NQI or flow-through entity for

extent of the amount specified in the period rule to treat a payee as a foreign other accounts. A U.S. withholding agent

qualified notice received by the nominee. person must file Form 1042-S to report all that receives a Form W-8IMY on which

For this purpose, a nominee is a domestic payments during the period that person the foreign person providing the form

person that holds an interest in a PTP on was presumed to be foreign even if that indicates that it is not acting as a QI, WP,

behalf of a foreign person. See person is later determined to be a U.S. or WT may not treat the foreign person as

Regulations section 1.1446-4 and Pub. person based on appropriate a recipient. A withholding agent must not

515 for details. documentation or is presumed to be a use the EIN that a QI, WP, or WT

U.S. person after the grace period ends. provides in its capacity as such to report

If you are a nominee that is the payments that are treated as made to an In the case of foreign joint owners, you withholding agent under section may provide a single Form 1042-S made entity in its capacity as an NQI or

1446, enter the PTP’s name and flow-through entity. In that case, use the out to the owner whose status you relied

TIP

other required information in boxes 17 EIN, if any, that is provided by the entity upon to determine the applicable rate of on its Form W-8IMY in which it claims that through 20 on Form 1042-S. withholding (the owner subject to the it is acting as an NQI or flow-through highest rate of withholding). If, however, Other partnerships that have entity. any one of the owners requests its own effectively connected gross income Form 1042-S, you must furnish a Form Payments allocated, or presumed allocable to foreign partners must pay a 1042-S to the person who requests it. If made, to U.S. non-exempt recipients. withholding tax under section 1446. more than one Form 1042-S is issued for You may be given Forms W-9 or other These amounts are reported on Form a single payment, the aggregate amount information regarding U.S. non-exempt 8804, Annual Return for Partnership paid and tax withheld that is reported on recipients from a QI together with Withholding Tax (Section 1446), and all Forms 1042-S cannot exceed the total information allocating all or a portion of Form 8805, Foreign Partner’s Information amounts paid to joint owners and the tax the payment to U.S. non-exempt Statement of Section 1446 Withholding withheld on those payments. recipients. You must report income Tax. allocable to a U.S. non-exempt recipient Payments to a qualified intermediary, on the appropriate Form 1099 and not on withholding foreign partnership, or Payments by U.S. Form 1042-S, even though you are withholding foreign trust. A U.S. paying that income to a QI. Withholding Agents withholding agent that makes payments

to a QI (whether or not the QI assumes You may also be required under the

presumption rules to treat a payment In general. U.S. withholding agents primary withholding responsibility), a

making payments described under withholding foreign partnership (WP), or a made to a QI as made to a payee that is a

Amounts Subject to Reporting on Form withholding foreign trust (WT) should U.S. non-exempt recipient from which you

1042-S must withhold 28% of the payment under beginning on page 4 must file a generally complete Forms 1042-S treating

separate Form 1042-S for each recipient the QI, WP, or WT as the recipient. the backup withholding provisions of the

who receives the income. Furthermore, However, see Payments allocated, or Code. In this case, you must report the

withholding agents filing paper Forms presumed made, to U.S. non-exempt payment on the appropriate Form 1099.

1042-S are not permitted to report recipients on this page for exceptions. See the General Instructions for Forms

multiple types of income on copy A filed The U.S. withholding agent must 1099, 1098, 5498, and W-2G.

with the IRS. These filers must use a complete a separate Form 1042-S for Example 1. WA, a U.S. withholding

separate Form 1042-S for information each withholding rate pool of the QI, WP, agent, makes a payment of U.S. source

reportable on a single type of income. or WT. For this purpose, a withholding dividends to QI, a qualified intermediary.

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QI provides WA with a valid Form the U.S. branch as the recipient and Form W-8BEN or W-8ECI from a foreign

W-8IMY with which it associates a reporting the income as effectively person that is the single owner of the

withholding statement that allocates 95% connected income. disregarded entity, the withholding agent

of the payment to a 15% withholding rate must file a Form 1042-S in the name of The rules above apply only to U.S. pool and 5% of the payment to C, a U.S. the foreign single owner. The taxpayer branches treated as U.S. persons individual. QI provides WA with C’s Form identifying number (TIN) on the Form CAUTION (defined on page 4). In all other

!

W-9. WA must complete a Form 1042-S, 1042-S, if required, must be the foreign cases, payments to a U.S. branch of a showing QI as the recipient in box 13a single owner’s TIN. foreign person are treated as payments to and recipient code 12 (qualified Example. A withholding agent (WA) the foreign person. intermediary) in box 13b, for the dividends makes a payment of interest to LLC, a allocated to the 15% withholding rate Amounts paid to authorized foreign foreign limited liability company. LLC is pool. WA must also complete a Form agents. If a withholding agent makes a wholly-owned by FC, a foreign 1099-DIV reporting the portion of the payment to an authorized foreign agent corporation. LLC is treated as a dividend allocated to C. (defined on page 4), the withholding disregarded entity. WA has a Form agent files Forms 1042-S for each type of Example 2. W-8BEN from FC on which it states that it WA, a withholding agent, income (determined by reference to the makes a payment of U.S. source is the beneficial owner of the income paid income codes used to complete Form to LLC. WA reports the interest payment dividends to QI, a qualified intermediary. 1042-S) treating the authorized foreign QI provides WA with a valid Form on Form 1042-S showing FC as the agent as the recipient, provided that the W-8IMY with which it associates a recipient. The result would be the same if authorized foreign agent reports the withholding statement that allocates 40% LLC was a domestic entity. payments on Forms 1042-S to each of the payment to a 15% withholding rate recipient to which it makes payments. If A disregarded entity can claim to be

pool and 40% to a 30% withholding rate the authorized foreign agent fails to report the beneficial owner of a payment if it is a

pool. QI does not provide any withholding the amounts paid on Forms 1042-S for hybrid entity claiming treaty benefits. See

rate pool information regarding the each recipient, the U.S. withholding agent Form W-8BEN and its instructions for

remaining 20% of the payment. WA must remains responsible for such reporting. more information. If a disregarded entity

apply the presumption rules to the portion claims on a valid Form W-8BEN to be the In box 13b, use recipient code 17 of the payment (20%) that has not been beneficial owner, the U.S. withholding (authorized foreign agent). allocated. Under the presumption rules, agent must complete a Form 1042-S

that portion of the payment is treated as Amounts paid to a complex trust or an treating the disregarded entity as a

paid to an unknown foreign payee. WA estate. If a U.S. withholding agent recipient and use recipient code 02

must complete three Forms 1042-S: one makes a payment to a foreign complex (corporation).

for dividends subject to 15% withholding, trust or a foreign estate, a Form 1042-S Amounts paid to a nonqualified showing QI as the recipient in box 13a must be completed showing the complex intermediary or flow-through entity. If

and recipient code 12 (qualified trust or estate as the recipient. Use a U.S. withholding agent makes a recipient code 05 (trust) or 10 (estate). intermediary) in box 13b; one for payment to an NQI or a flow-through dividends subject to 30% withholding, See Payments Made to Persons Who Are entity, it must complete a separate Form showing QI as the recipient in box 13a Not Recipients beginning on this page for 1042-S for each recipient on whose and recipient code 12 (qualified the treatment of payments made to behalf the NQI or flow-through entity acts foreign simple trusts and foreign grantor intermediary) in box 13b; and one for as indicated by its withholding statement dividends subject to 30% withholding, trusts. and the documentation associated with its

showing QI as the recipient in box 13a Dual claims. A withholding agent may Form W-8IMY. If a payment is made and recipient code 20 (unknown recipient) make a payment to a foreign entity (for through tiers of NQIs or flow-through in box 13b. example, a hybrid entity) that is entities, the withholding agent must

Amounts paid to certain U.S. simultaneously claiming a reduced rate of nevertheless complete Form 1042-S for tax on its own behalf for a portion of the the recipients to which the payments are branches. A U.S. withholding agent payment and a reduced rate on behalf of making a payment to a “U.S. branch remitted. A withholding agent completing persons in their capacity as interest Form 1042-S for a recipient that receives treated as a U.S. person” (defined on holders in that entity on the remaining a payment through an NQI or a page 4) completes Form 1042-S as portion. If the claims are consistent and flow-through entity must include in boxes follows: the withholding agent has accepted the 17 through 20 of Form 1042-S the name, • If a withholding agent makes a multiple claims, a separate Form 1042-S country code, address, and TIN, if any, of payment to a U.S. branch that has

provided the withholding agent with a must be filed for the entity for those the NQI or flow-through entity from whom payments for which the entity is treated the recipient directly receives the Form W-8IMY that evidences its

agreement with the withholding agent to as claiming a reduced rate of withholding payment. A copy of the Form 1042-S and separate Forms 1042-S must be filed need not be provided to the NQI or be treated as a U.S. person, the U.S.

withholding agent treats the U.S. branch for each of the interest holders for those flow-through entity unless the withholding payments for which the interest holders agent must report the payment to an as the recipient. are claiming a reduced rate of unknown recipient. See Example 4 on • If a withholding agent makes a withholding. If the claims are consistent page 8. payment to a U.S. branch that has but the withholding agent has not chosen provided a Form W-8IMY to transmit If a U.S. withholding agent makes to accept the multiple claims, or if the information regarding recipients, the U.S. payments to an NQI or flow-through entity claims are inconsistent, a separate Form withholding agent must complete a and cannot reliably associate the 1042-S must be filed for the person(s) separate Form 1042-S for each recipient payment, or any portion of the payment, being treated as the recipient(s). whose documentation is associated with with a valid withholding certificate (Forms

the U.S. branch’s Form W-8IMY. If a W-8 or W-9) or other valid appropriate Special instructions for U.S. trusts and

payment cannot be reliably associated documentation from a recipient (either estates. Report the entire amount of

with recipient documentation, the U.S. because a recipient withholding certificate income subject to reporting, irrespective

withholding agent must complete Form has not been provided or because the of estimates of distributable net income.

1042-S in accordance with the NQI or flow-through entity has failed to Payments Made to Persons presumption rules. provide the information required on a Who Are Not Recipients • If a withholding agent cannot reliably withholding statement), the withholding

associate a payment with a Form W-8IMY Disregarded entities. If a U.S. agent must follow the appropriate

from a U.S. branch, the payment must be withholding agent makes a payment to a presumption rules for that payment. If,

reported on a single Form 1042-S treating disregarded entity but receives a valid under the presumption rules, an unknown

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recipient of the income is presumed to be Forms 1042-S (one for interest and one W-8BEN of A, B, C, and D. However, NQI

foreign, the withholding agent must for dividends) showing A as the recipient, does not provide WA with a complete

withhold 30% of the payment and report two Forms 1042-S (one for interest and withholding statement in association with

the payment on Form 1042-S. For this one for dividends) showing B as the its Form W-8IMY. Because NQI has not

purpose, if the allocation information recipient, and two Forms 1042-S (one for provided WA with a complete withholding

provided to the withholding agent interest and one for dividends) showing statement, WA cannot reliably associate

indicates an allocation of more than 100% QI as the recipient. WA must show the payments of interest with the

of the payment, then no portion of the information relating to NQI in boxes 17 documentation of A, B, C, and D, and

payment should be considered to be through 20 on all six Forms 1042-S. must apply the presumption rules. Under

associated with a Form W-8, Form W-9, the presumption rules, WA must treat the Example 2. The facts are the same or other appropriate documentation. The interest as paid to an unknown recipient as in Example 1, except that A and B are Form 1042-S should be completed by that is a foreign person. The payments of account holders of NQI2, which is an entering “Unknown Recipient” in box 13a interest are subject to 30% withholding. account holder of NQI. NQI2 provides and recipient code 20 in box 13b. WA must complete one Form 1042-S, NQI with a Form W-8IMY with which it entering “Unknown Recipient” in box 13a Pro-rata reporting. If the withholding associates the Forms W-8BEN of A and B and recipient code 20 in box 13b. WA agent has agreed that an NQI may and a complete withholding statement must include information relating to NQI in provide information allocating a payment that allocates the interest and dividend boxes 17 through 20 and must provide to its account holders under the payments it receives from NQI to A and the recipient copies of the form to NQI. alternative procedure of Regulations B. NQI provides WA with its Form Because NQI has failed to provide all the section 1.1441-1(e)(3)(iv)(D) (no later W-8IMY and the Forms W-8IMY of NQI2 information necessary for WA to than February 14, 2009) and the NQI fails and QI and the Forms W-8BEN of A and accurately report the payments of interest to allocate more than 10% of the payment B. In addition, NQI associates a complete to A, B, C, and D, NQI must report the in a withholding rate pool to the specific withholding statement with its Form payments on Form 1042-S. See Amounts recipients in the pool, the withholding W-8IMY that allocates the payments of Paid by Nonqualified Intermediaries and agent must file Forms 1042-S for each interest and dividends to A, B, and QI. Flow-Through Entities on page 10. The recipient in the pool on a pro-rata basis. WA must file six Forms 1042-S: two results would be the same if WA’s If, however, the NQI fails to timely Forms 1042-S (one for interest and one account holder was a flow-through entity allocate 10% or less of the payment in a for dividends) showing A as the recipient, instead of a nonqualified intermediary. withholding rate pool to the specific two Forms 1042-S (one for interest and

recipients in the pool, the withholding one for dividends) showing B as the Example 5. The facts are the same

agent must file Forms 1042-S for each recipient, and two Forms 1042-S (one for as in Example 4, except that NQI recipient for which it has allocation interest and one for dividends) showing provides the Forms W-8BEN of A and B, information and report the unallocated QI as the recipient. The Forms 1042-S but not the Forms W-8BEN of C and D.

portion of the payment on a Form 1042-S issued to A and B must show information NQI also provides a withholding issued to “Unknown Recipient.” In either relating to NQI2 in boxes 17 through 20 statement that allocates a portion of the case, the withholding agent must include because A and B receive their payments interest payment to A and B but does not the NQI information in boxes 17 through directly from NQI2, not NQI. The Forms allocate the remaining portion of the 20 on that form. See Example 6 1042-S issued to QI must show payment. WA must file three Forms (beginning on this page) and Example 7 information relating to NQI in boxes 17 1042-S: one showing A as the recipient in (on page 9). through 20. box 13a, one showing B as the recipient

The following examples illustrate Form Example 3. FP is a nonwithholding in box 13a and one showing “Unknown

1042-S reporting for payments made to foreign partnership and therefore a Recipient” in box 13a (and recipient code

NQIs and flow-through entities. flow-through entity. FP establishes an 20 in box 13b) for the unallocated portion

account with WA, a U.S. withholding of the payment that cannot be associated Example 1. NQI, a nonqualified agent, from which FP receives interest with valid documentation from a recipient. intermediary, has three account holders, described by income code 01 (interest In addition, WA must send the Form A, B, and QI. All three account holders paid by U.S. obligors—general). FP has 1042-S for the unknown recipient to NQI. invest in U.S. securities that produce three partners, A, B, and C, all of whom All Forms 1042-S must contain interest and dividends. A and B are are individuals. FP provides WA with a information relating to NQI in boxes 17 foreign individuals and have provided NQI Form W-8IMY with which it associates the through 20. The results would be the with Forms W-8BEN. QI is a qualified Forms W-8BEN from each of A, B, and C. same if WA’s account holder was a intermediary and has provided NQI with a In addition, FP provides a complete flow-through entity instead of a Form W-8IMY and the withholding withholding statement with its Form nonqualified intermediary. statement required from a qualified W-8IMY that allocates the interest intermediary. QI’s withholding statement Example 6. NQI is a nonqualified payments among A, B, and C. WA must states that QI has two withholding rate intermediary. It has four customers: A, B, file three Forms 1042-S, one each for A, pools: one for interest described by C, and D. NQI receives Forms W-8BEN B, and C. The Forms 1042-S must show income code 01 (interest paid by U.S. from each of A, B, C, and D. NQI information relating to FP in boxes 17 obligors—general) and one for dividends establishes an account with WA, a U.S. through 20. described by income code 06 (dividends withholding agent, in which it holds

paid by U.S. corporations—general). NQI Example 4. NQI is a nonqualified securities on behalf of A, B, C, and D.

provides WA, a U.S. withholding agent, intermediary. It has four customers: A, B, The securities pay interest that is

with its own Form W-8IMY, with which it C, and D. NQI receives Forms W-8BEN described by income code 01 (interest

associates the Forms W-8BEN of A and B from each of A, B, C, and D. NQI paid by U.S. obligors—general) and that

and the Form W-8IMY of QI. In addition, establishes an account with WA, a U.S. may qualify for the portfolio interest

NQI provides WA with a complete withholding agent, in which it holds exemption from withholding if all of the

withholding statement that allocates the securities on behalf of A, B, C, and D. requirements for that exception are met.

payments of interest and dividends WA The securities pay interest that is NQI provides WA with a Form W-8IMY

makes to NQI among A, B, and QI. All of described by income code 01 (interest with which it associates the Forms

the interest and dividends paid by WA to paid by U.S. obligors—general) and that W-8BEN of A, B, C, and D. WA and NQI

NQI is described by income code 01 may qualify for the portfolio interest agree that they will apply the alternative

(interest paid by U.S. obligors—general) exemption from withholding if all of the procedures of Regulations section

and income code 06 (dividends paid by requirements for that exception are met. 1.1441-1(e)(3)(iv)(D). Accordingly, NQI

U.S. corporations—general). WA must NQI provides WA with a Form W-8IMY provides a complete withholding

file a total of six Forms 1042-S: two with which it associates the Forms statement that indicates that it has one

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0% withholding rate pool. WA pays $100 made to a payee that is a U.S. Example 1. QI, a qualified

of interest to NQI. NQI fails to provide WA non-exempt recipient from which you intermediary, has four direct account

with the allocation information by must withhold 28% of the payment under holders, A and B, foreign individuals, and

February 14, 2009. Therefore, WA must the backup withholding provisions of the X and Y, foreign corporations. A and X

report 25% of the payment to each of A, Code. In this case, you must report the are residents of a country with which the

B, C, and D using pro-rata basis payment on the appropriate Form 1099. United States has an income tax treaty

reporting. Accordingly, for each of the See the General Instructions for Forms and have provided documentation that

Forms 1042-S, WA must enter $25 in box 1099, 1098, 5498, and W-2G. establishes that they are entitled to a

2 (gross income),“30.00” in box 5 (tax lower treaty rate of 15% on withholding of Example 1. FP is a nonwithholding rate), $0 in box 7 (federal tax withheld), dividends from U.S. sources. B and Y are foreign partnership and therefore a and $0 in box 9 (total withholding credit). not residents of a treaty country and are flow-through entity. FP establishes an In addition, WA must check the subject to 30% withholding on dividends. account with WA, a U.S. withholding PRO-RATA BASIS REPORTING box at QI receives U.S. source dividends on agent, from which FP receives interest the top of the form and include NQI’s behalf of its four customers. QI must file described by income code 01 (interest name, address, country code, and TIN, if one Form 1042-S for the 15% withholding paid by U.S. obligors—general). FP has any, in boxes 17 through 20. WA must rate pool. This Form 1042-S must show three partners, A, B, and C, all of whom enter “30.00” in box 5 (tax rate) because income code 06 (dividends paid by U.S. are individuals. FP provides WA with a without allocation information, WA cannot corporations—general) in box 1, “15.00” Form W-8IMY with which it associates reliably associate the payment of interest in box 5 (tax rate), “Withholding rate pool” Forms W-8BEN from A and B and a Form with documentation from a foreign in box 13a (recipient’s name), and W-9 from C, a U.S. person. In addition, beneficial owner and therefore may not recipient code 15 (qualified intermediary FP provides a complete withholding apply the portfolio interest exception. See withholding rate pool—general) in box statement in association with its Form the instructions for box 6 (exemption 13b. QI must also file one Form 1042-S W-8IMY that allocates the interest code) on page 14 for information on for the 30% withholding rate pool that payments among A, B, and C. WA must completing that box. contains the same information as the file two Forms 1042-S, one each for A Form 1042-S filed for the 15% withholding Example 7. The facts are the same and B, and a Form 1099-INT for C. rate pool, except that it will show “30.00” as in Example 6, except that NQI timely Example 2. The facts are the same in box 5 (tax rate). provides WA with information allocating as in Example 1, except that FP does not 70% of the payment to A, 10% of the Example 2. The facts are the same provide any documentation from its payment to B, and 10% of the payment to as in Example 1, except that Y is an partners. Because WA cannot reliably C. NQI fails to allocate any of the organization that has tax-exempt status in associate the interest with documentation payment to D. Because NQI has allocated the United States and in the country in from a payee, it must apply the 90% of the payment made to the 0% which it is located. QI must file three presumption rules. Under the withholding rate pool, WA is not required Forms 1042-S. Two of the Forms 1042-S presumption rules, the interest is deemed to report to NQI’s account holders on a will contain the same information as in paid to an unknown U.S. non-exempt pro-rata basis. Instead, WA must file Example 1. The third Form 1042-S will recipient. WA must, therefore, apply Forms 1042-S for A, B, and C, entering contain information for the withholding backup withholding at 28% to the $70, $10, and $10, respectively, in box 2 rate pool consisting of the amounts paid payment of interest and report the (gross income), “00.00” in box 5 (tax to Y. This Form 1042-S will show income payment on Form 1099-INT. WA must file rate), exemption code 05 (portfolio code 06 (dividends paid by U.S. a Form 1099-INT and send a copy to FP. interest) in box 6, $0 in box 7 (federal tax corporations—general) in box 1, “00.00”

withheld), and $0 in box 9 (total in box 5 (tax rate), exemption code 02

withholding credit). WA must apply the (exempt under an Internal Revenue Code Amounts Paid by

presumption rules to the $10 that NQI has section (income other than portfolio Qualified Intermediaries not allocated and file a Form 1042-S interest)) in box 6, “Zero rate withholding

showing “Unknown Recipient” in box 13a pool—exempt organizations,” or similar In general. A QI reports payments on

and recipient code 20 in box 13b. On that designation, in box 13a (recipient’s Form 1042-S in the same manner as a

Form 1042-S, WA must also enter “30.00” name), and recipient code 16 (qualified U.S. withholding agent. However,

in box 5 (tax rate) because the portfolio intermediary withholding rate pool— payments that are made by the QI directly

interest exemption is unavailable, $0 in exempt organizations) in box 13b. to foreign beneficial owners (or that are

box 7 (federal tax withheld), and $0 in box treated as paid directly to beneficial

owners) may generally be reported on the Under the terms of its withholding 9 (total withholding credit) because no basis of reporting pools. A reporting pool agreement with the IRS, the QI amounts were actually withheld from the consists of income that falls within a CAUTION may be required to report the

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interest. In addition, WA must send the particular withholding rate and within a amounts paid to U.S. non-exempt Form 1042-S for the unknown recipient to

NQI. All Forms 1042-S must contain particular income code, exemption code, recipients on Form 1099 using the name,

or recipient code as determined on Form address, and TIN of the payee to the information relating to NQI in boxes 17 1042-S. A QI may not report on the basis extent those items of information are through 20. of reporting pools in the circumstances known. These amounts must not be

Payments allocated, or presumed described in Recipient-by-Recipient reported on Form 1042-S. In addition, made, to U.S. non-exempt recipients. Reporting on page 10. A QI may use a amounts paid to U.S. exempt recipients You may be given Forms W-9 or other single recipient code 15 (qualified are not subject to reporting on Form information regarding U.S. non-exempt intermediary withholding rate pool— 1042-S or Form 1099. recipients from an NQI or flow-through general) for all reporting pools, except for entity together with information allocating Amounts Paid to Private amounts paid to foreign tax-exempt all or a portion of the payment to U.S. recipients for which recipient code 16 Arrangement Intermediaries non-exempt recipients. You must report should be used. Note, however, that a QI A QI generally must report payments income allocable to a U.S. non-exempt should only use recipient code 16 for made to each private arrangement recipient on the appropriate Form 1099 pooled account holders that have claimed intermediary (PAI) (defined on page 3) as and not on Form 1042-S, even though an exemption based on their tax-exempt if the PAI’s direct account holders were its you are paying that income to an NQI or a status and not some other exemption (tax own. Therefore, if the payment is made flow-through entity. treaty or other Code exception). See directly by the PAI to the recipient, the QI

You may also be required under the Amounts Paid to Private Arrangement may report the payment on a pooled

presumption rules to treat a payment Intermediaries on this page, if a QI is basis. A separate Form 1042-S is

made to an NQI or flow-through entity as reporting payments to a PAI. required for each withholding rate pool of

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each PAI. The QI must, however, include that receives a payment through an NQI (qualified intermediary withholding rate

the name and address of the PAI and use must include in boxes 17 through 20 the pool—general) for all reporting pools,

recipient code 13 or 14 in boxes 13a-13e. name, country code, address, and TIN, if except for amounts paid to foreign

If the PAI is providing recipient any, of the NQI from whom the recipient tax-exempt recipients for which a

information from an NQI or flow-through directly receives the payment. separate recipient code 16 must be used.

entity, the QI may not report the For this purpose, a foreign tax-exempt Example. QI, a qualified payments on a pooled basis. Instead, it recipient includes any organization that is intermediary, has NQI, a nonqualified must follow the same procedures as a not subject to withholding and is not liable intermediary, as an account holder. NQI U.S. withholding agent making a payment to tax in its country of residence because has two account holders, A and B, both to an NQI or flow-through entity. it is a charitable organization, pension foreign persons who receive U.S. source

Example. dividends from QI. NQI provides QI with a fund, or foreign government. QI, a qualified

intermediary, pays U.S. source dividends valid Form W-8IMY, with which it Amounts paid to certain related to direct account holders that are foreign associates Forms W-8BEN from A and B partnerships and trusts. A WP or WT

persons and beneficial owners. It also and a complete withholding statement that is applying the rules of Section 10.02 pays a portion of the U.S. source that allocates the dividends paid to NQI of the WP or WT agreement to a dividends to two private arrangement between A and B. QI must complete two partnership or trust must file separate intermediaries, PAI1 and PAI2. The Forms 1042-S, one for A and one for B, Forms 1042-S reflecting reporting pools private arrangement intermediaries pay and include information relating to NQI in for each partnership or trust that has the dividends they receive from QI to boxes 17 through 20. provided reporting pool information in its foreign persons that are beneficial owners Payments made to a flow-through withholding statement. However, the WP and direct account holders in PAI1 and entity. The QI must complete a Form or WT must apply the provisions of PAI2. All of the dividends paid are subject 1042-S for each recipient who receives Regulations sections 1.1441-1 and to a 15% rate of withholding. QI must file the payment from the flow-through entity. 1.1441-5 to partners, beneficiaries, or a Form 1042-S for the dividends paid to A QI that is completing a Form 1042-S for owners of such partnership or trust that its own direct account holders that are a recipient that receives a payment are indirect partners, beneficiaries, or beneficial owners. QI must also file two through a flow-through entity must include owners, and to direct partners, Forms 1042-S, one for the dividends paid in boxes 17 through 20 the name, country beneficiaries, or owners of such to the direct account holders of each of code, address, and TIN, if any, of the partnership or trust that are intermediaries PAI1 and PAI2. Each of the Forms flow-through entity from which the or flow-through entities. 1042-S that QI files for payments made to recipient directly receives the payment. PAI1 and PAI2 must contain the name

and address of PAI1 or PAI2 and Example. QI, a qualified Amounts Paid

intermediary, has FP, a nonwithholding recipient code 13 (private arrangement foreign partnership, as an account holder. by Nonqualified intermediary withholding rate pool— QI pays interest described by income general) in boxes 13a-13e. Intermediaries and code 01 (interest paid by U.S. obligors—

Amounts Paid to general) to FP. FP has three partners, A, Flow-Through Entities

Certain Related Partnerships B, and C, all of whom are individuals. FP An NQI and a flow-through entity are

and Trusts provides QI with a Form W-8IMY with withholding agents and must file Forms which it associates the Forms W-8BEN 1042-S for amounts paid to recipients. A QI that is applying the rules of Section from each of A, B, and C. In addition, FP However, an NQI or flow-through entity is 4A.02 of the QI agreement to a provides a complete withholding not required to file Form 1042-S if it is not partnership or trust must file separate statement in association with its Form required to file Form 1042-S under the Forms 1042-S reflecting reporting pools W-8IMY that allocates the interest Multiple Withholding Agent Rule on page for each partnership or trust that has payments among A, B, and C. QI must 11. An NQI or flow-through entity must provided reporting pool information in its file three Forms 1042-S, one each for A, report payments made to recipients to the withholding statement. However, the QI B, and C. The Forms 1042-S must show extent it has failed to provide to another must file separate Forms 1042-S for information relating to FP in boxes 17 withholding agent the appropriate partners, beneficiaries, or owners of such through 20. documentation and complete withholding partnership or trust that are indirect Amounts Paid by statement, including information allocating partners, beneficiaries, or owners, and for the payment to each recipient. direct partners, beneficiaries, or owners of Withholding Foreign

such partnership or trust that are Partnerships and Trusts If another withholding agent withheld

intermediaries or flow-through entities. tax but did not report the payment on In general. Generally, a withholding Form 1042-S to the recipient, even if the Recipient-by-Recipient foreign partnership (WP) or withholding recipient should have been exempt from Reporting foreign trust (WT) is required to file a taxation, the NQI or flow-through entity separate Form 1042-S for each direct If a QI is not permitted to report on the must file Form 1042-S. Failure to file

basis of reporting pools, it must follow the partner, beneficiary, or owner to whom Forms 1042-S may not only result in the WP or WT distributes, or in whose same rules that apply to a U.S. penalties for the NQI or flow-through distributive share is included, an amount withholding agent. A QI may not report entity, but may result in the denial of any subject to withholding under Chapter 3 of the following payments on a reporting refund claim made by a recipient. the Code, in the same manner as a U.S. pool basis, but rather must complete withholding agent. However, if the WP or If another withholding agent has Form 1042-S for each appropriate WT has made a pooled reporting election withheld tax on an amount that should recipient. in its WP or WT agreement, the WP or have been exempt (for example, where Payments made to another QI, WP, or WT may instead report payments to such the withholding agent applied the WT. The QI must complete a Form direct partners, beneficiaries, or owners presumption rules because it did not 1042-S treating the other QI, WP, or WT on the basis of reporting pools and file a receive proper documentation or other as the recipient. separate Form 1042-S for each reporting required information from the NQI or

Payments made to an NQI (including pool. A reporting pool consists of income flow-through entity), the NQI or

an NQI that is an account holder of a that falls within a particular withholding flow-through entity should report the

PAI). The QI must complete a Form rate and within a particular income code, correct tax rate and the combined amount

1042-S for each recipient who receives exemption code, and recipient code, as of U.S. federal tax withheld by the NQI or

the payment from the NQI. A QI that is determined on Form 1042-S. A WP or WT flow-through entity and any other

completing Form 1042-S for a recipient may use a single recipient code 15 withholding agent and should enter the

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applicable exemption code using the the payment on behalf of A, a resident of 6 on page 14.) NQI must also file a Form

instructions for box 6 on page 14. 1099 for D to report the actual amounts a treaty country who is entitled to a 15%

rate of withholding, and B, a resident of a paid and withheld. If another withholding agent country that does not have a tax treaty underwithholds, even though it received

proper documentation from the NQI or with the United States and who is subject Multiple Withholding to 30% withholding. NQI provides WA flow-through entity, the NQI or with its Form W-8IMY to which it Agent Rule flow-through entity must withhold associates the Forms W-8BEN from both A withholding agent is not required to file additional amounts to bring the total A and B and a complete withholding Form 1042-S if a return is filed by another withholding to the correct amount. statement that allocates 50% of the withholding agent reporting the same Furthermore, the NQI or flow-through dividend to A and 50% to B. A’s Form amount to the same recipient (the multiple entity must complete Form 1042-S and W-8BEN claims a 15% treaty rate of withholding agent rule). If an NQI or must include the correct tax rate and the

withholding. B’s Form W-8BEN does not flow-through entity has provided another combined amount of U.S. federal tax

claim a reduced rate of withholding. WA, withholding agent with the appropriate withheld by the NQI or flow-through entity. however, mistakenly withholds only 15%, documentation and complete withholding Example 1. A foreign bank acts as a $15, from the entire $100 payment. WA statement, including information allocating nonqualified intermediary (NQI) for four completes a Form 1042-S for each A and the payment to each recipient, the NQI or different foreign persons (A, B, C, and D) B as the recipients, showing on each form flow-through entity may presume that the who own securities from which they $50 of dividends in box 2, a withholding other withholding agent filed the required receive interest. The interest is paid by a Forms 1042-S unless the NQI or rate of “15.00” in box 5 (tax rate), and U.S. withholding agent (WA) as custodian $7.50 as the amount withheld in boxes 7 flow-through entity knows, or has reason of the securities for NQI. A, B, C, and D and 9. Under the multiple withholding to know, that the required Form 1042-S each own a 25% interest in the securities. agent rule, NQI is not required to file a reporting has not been done. NQI has furnished WA a Form W-8IMY to Form 1042-S for A. However, because The multiple withholding agent rule which it has attached Forms W-8BEN NQI knows (or should know) that B is does not relieve withholding agents from from A and B. NQI’s Form W-8IMY subject to a 30% rate of withholding, and Form 1042-S reporting responsibility in contains an attachment stating that 25% assuming it knows that WA only withheld the following circumstances. of the securities are allocable to each of A 15%, the multiple withholding agent rule and B, and 50% to undocumented • Any withholding agent making a does not apply to the dividend paid to B owners. WA pays $100 of interest during payment to a QI, WP, or WT must report and NQI must withhold an additional 15% the calendar year. WA treats the $25 of that payment as made to the QI, WP, or

interest allocable to A and the $25 of from the payment to B. NQI must then file WT. a Form 1042-S for B showing $50 of interest allocable to B as portfolio interest • Any U.S. withholding agent making a dividends in box 2, “30.00” in box 5 (the and completes a Form 1042-S for A and payment to an authorized foreign agent correct tax rate), and $7.50 withheld by for B as the recipients. WA includes must report that payment to the NQI in box 7, $7.50 withheld by WA in information relating to NQI in boxes 17 authorized foreign agent. box 8, and $15 in box 9 (the combined through 20 on the Forms 1042-S for A • Any withholding agent making a amount withheld). NQI must also enter and B. WA subjects the remaining $50 of payment to a U.S. branch treated as a “00” in box 6 (exemption code). See the interest to 30% withholding under the U.S. person must report the payment as

presumption rules and reports the interest instructions for box 6 on page 14. made to that branch.

on a Form 1042-S by entering “Unknown Example 3. A withholding agent (WA) • Any withholding agent making a

Recipient” in box 13a (and recipient code payment to a flow-through entity must receives a Form W-8IMY from a

20 in box 13b), “30.00” in box 5 (tax rate), report the payment as made to a nonqualified intermediary (NQI). NQI’s and $15 as the amount withheld in box 7 beneficial owner, QI, WP, or WT that has Form W-8IMY relates to payments of and box 9. WA also includes information a direct or indirect interest in that entity. bank deposit interest. NQI collects the relating to NQI in boxes 17 through 20 of • Any withholding agent that withholds an bank deposit interest on behalf of A, B, C, the Form 1042-S and sends a copy of the amount from a payment under Chapter 3 and D, but does not associate Forms form to NQI. Because NQI has not W-8, W-9, or other documentary evidence of the Code must report that amount to

provided WA with beneficial owner the recipient from whom it was withheld, with the Form W-8IMY that NQI provides information for C and D, NQI must report WA. A, B, and C are foreign persons for unless the payment is reportable on

the interest paid to C and D on Forms another IRS form. whom NQI has valid documentation 1042-S. (Note that under the multiple establishing their foreign status. D is a Furthermore, the multiple withholding withholding agent rule, NQI is not U.S. person and has provided NQI with a agent rule does not relieve the following required to file a Form 1042-S for A or B.) Form W-9. Under the presumption rules, from Form 1042-S reporting The Forms 1042-S for C and D should WA must treat the bank deposit interest responsibility. show $25 in box 2 (gross income) and as being paid to an unknown U.S. person • Any QI, WP, or WT required to report $7.50 in boxes 7 and 9. The rate of tax and apply backup withholding at 28%. an amount to a withholding rate pool. NQI includes on the Form 1042-S for C WA must complete one Form 1099 for an • An NQI or flow-through entity that has and D depends on the rate of withholding unknown payee showing 28% backup not transmitted a valid Form W-8 or other to which they should be subject. Thus, if withholding. A copy of the form must be valid documentation to another C and D provided NQI with sent to NQI. Because NQI failed to withholding agent together with the documentation prior to the payment of provide the requisite documentation to required withholding statement. interest that would qualify the interest as WA and because the amounts have been portfolio interest, the rate entered in box 5 subject to withholding, NQI must report Penalties should be “00.00.” If they do not qualify the amounts paid to A, B, C, and D. for a reduced rate of withholding, NQI The following penalties apply to the Accordingly, NQI must file a Form 1042-S should enter “30.00” in box 5. In any person required to file Form 1042-S. The for each A, B, and C showing deposit event, NQI must also enter “99” in box 6 penalties apply to both paper filers and to interest (income code 29) as the type of electronic filers. (exemption code) of the Forms 1042-S it payment in box 1; “00.00” in box 5 (the prepares for C and D. See the correct tax rate); “0” in box 7 (the amount At the time these instructions went instructions for box 6 on page 14. withheld by NQI); the actual amount to print, Congress was considering

Example 2. A U.S. withholding agent withheld by WA that is allocable to A, B, CAUTION legislation that would increase

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(WA) makes a $100 dividend payment to and C in box 8; the total withheld (box 7 some of the penalties listed below. To find

a foreign bank (NQI) that acts as a plus box 8) in box 9; and exemption code out if this legislation was enacted, see

nonqualified intermediary. NQI receives 99 in box 6. (See the instructions for box Pub. 515.

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Late filing of correct Form 1042-S. A period of its existence, if shorter) ending to $100 or, if greater, 10% of the total

penalty may be imposed for failure to file before the calendar year in which the amount of items required to be reported,

each correct and complete Form 1042-S Forms 1042-S are due. with no maximum penalty.

when due (including extensions), unless • $30 per Form 1042-S if you correctly

you can show that the failure was due to file more than 30 days after the due date Failure to furnish correct Form 1042-S

but by August 1; maximum penalty to recipient. If you fail to provide reasonable cause and not willful neglect. $150,000 per year ($50,000 for a small correct statements to recipients and The penalty, based on when you file a business). cannot show reasonable cause, a penalty correct Form 1042-S, is: • $50 per Form 1042-S if you file after of $50 may be imposed for each failure to • $15 per Form 1042-S if you correctly August 1 or you do not file correct Forms furnish Form 1042-S to the recipient when file within 30 days; maximum penalty 1042-S; maximum penalty $250,000 per due. The penalty may also be imposed for $75,000 per year ($25,000 for a small year ($100,000 for a small business). failure to include all required information business). A small business, for this or for furnishing incorrect information on

purpose, is defined as having average If you intentionally disregard the Form 1042-S. The maximum penalty is

annual gross receipts of $5 million or less requirement to report correct information, $100,000 for all failures to furnish correct

for the 3 most recent tax years (or for the the penalty per Form 1042-S is increased recipient statements during a calendar

Income Codes, Exemption Codes, and Recipient Codes

Box 1. Enter the appropriate income code. Box 6. If the tax rate entered in box 5 is 00.00, you must

generally enter the appropriate exemption code from the list below

Code Interest Income (but see the Caution below).

01 Interest paid by U.S. obligors—general

02 Interest paid on real property mortgages Code Authority for Exemption

03 Interest paid to controlling foreign corporations 01 Income effectively connected with a U.S. trade or business

04 Interest paid by foreign corporations 02 Exempt under an Internal Revenue Code section (income other

05 Interest on tax-free covenant bonds than portfolio interest)

29 Deposit interest 03 Income is not from U.S. sources4

30 Original issue discount (OID) 04 Exempt under tax treaty

31 Short-term OID 05 Portfolio interest exempt under an Internal Revenue Code

33 Substitute payment—interest section

06 Qualified intermediary that assumes primary withholding

Code Dividend Income responsibility

06 Dividends paid by U.S. corporations—general 07 Withholding foreign partnership or withholding foreign trust

07 Dividends qualifying for direct dividend rate 08 U.S. branch treated as a U.S. person

08 Dividends paid by foreign corporations 09 Qualified intermediary represents income is exempt

34 Substitute payment—dividends

Caution: See the instructions for box 6 on page 14 for information on

Code Other Income additional codes (“00” and “99”) that may be required.

09 Capital gains

10 Industrial royalties Box 13b. Enter the appropriate recipient code.

11 Motion picture or television copyright royalties

12 Other royalties (e.g., copyright, recording, publishing) Code Type of Recipient

13 Real property income and natural resources royalties 01 Individual2

14 Pensions, annuities, alimony, and/or insurance premiums 02 Corporation2

15 Scholarship or fellowship grants 03 Partnership other than a withholding foreign partnership2

16 Compensation for independent personal services1 04 Withholding foreign partnership or withholding foreign trust

17 Compensation for dependent personal services1 05 Trust

18 Compensation for teaching1 06 Government or international organization

19 Compensation during studying and training1 07 Tax-exempt organization (IRC section 501(a))

20 Earnings as an artist or athlete2 08 Private foundation

24 Real estate investment trust (REIT) distributions of capital gains 09 Artist or athlete2

25 Trust distributions subject to IRC section 1445 10 Estate

26 Unsevered growing crops and timber distributions by a trust 11 U.S. branch treated as U.S. person

subject to IRC section 1445 12 Qualified intermediary

27 Publicly traded partnership distributions subject to IRC 13 Private arrangement intermediary withholding rate

section 1446 pool—general5

28 Gambling winnings6 14 Private arrangement intermediary withholding rate

32 Notional principal contract income3 pool—exempt organizations5

35 Substitute payment—other 15 Qualified intermediary withholding rate pool—general5

36 Capital gains distributions 16 Qualified intermediary withholding rate pool—exempt

37 Return of capital organizations5

50 Other income 17 Authorized foreign agent

18 Public pension fund

20 Unknown recipient

1 If compensation that otherwise would be covered under Income Codes 16–19 is directly attributable to the recipient’s occupation as an artist or

athlete, use Income Code 20 instead. 2 If Income Code 20 is used, Recipient Code 09 (artist or athlete) should be used instead of Recipient Code 01 (individual), 02 (corporation), or 03

(partnership other than withholding foreign partnership). 3 Use appropriate Interest Income Code for embedded interest in a notional principal contract.

4 Non-U.S. source income paid to a nonresident alien is not subject to U.S. tax. Use Exemption Code 03 when entering an amount for information

reporting purposes only. 5 May be used only by a qualified intermediary.

6 Subject to 30% withholding rate unless the recipient is from one of the treaty countries listed under Gambling winnings (Income Code 28) in Pub.

515.

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year. If you intentionally disregard the correctly coded and cannot be “US.” to or on behalf of the same recipient, you

requirement to report correct information, Additionally, do not use “OC” or “UC” must complete a separate Form 1042-S

each $50 penalty is increased to $100 or, except as specifically allowed in these for each income type.

if greater, 10% of the total amount of instructions. Substitute payment income codes are items required to be reported, with no • The exemption code you report in

maximum penalty. box 6 must correctly identify the proper to be used for all substitute payment

transactions. For more information, see tax status for the type of income you pay Failure to file electronically. If you are Regulations sections 1.861-2(a)(7) and to the recipient. required to file electronically but fail to do 1.861-3(a)(6) and Notice 97-66. so, and you do not have an approved Note. If you use exemption code 04 waiver on record, you may be subject to a (exempt under tax treaty), the country Note. Although income codes are

$50 penalty per return unless you code that you report in box 16 must be a provided for deposit interest, short-term

establish reasonable cause. The penalty valid treaty country. Countries with which OID, and notional principal contract

applies separately to original returns and the United States has a tax treaty are income, those items are not always

amended returns. shown in bold italics in the country code subject to reporting on Form 1042-S. For

list beginning on page 17. example, bank deposit interest is

Avoid Common Errors reportable if it is effectively connected

You, the withholding agent, are with the conduct of a U.S. trade or To ensure that your Forms 1042-S can be business or is paid to a resident of correctly processed, be sure that you: liable for the tax if you know, or

should have known, that Canada. Short-term OID or bank deposit • Carefully read the information provided CAUTION

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underwithholding on a payment has interest may need to be reported by an in Pub. 515 and these instructions.

occurred. NQI or flow-through entity if those • If you are an electronic filer, comply amounts are paid to foreign persons and with the requirements in Pub. 1187. another withholding agent backup • Complete all required fields. At a

minimum, you must enter information in withheld on those amounts under the Specific Instructions presumption rules. (See Example 3 on boxes 1, 2, 5, 6, 7, 9, 11, 12a-12d,13a, page 11.) Notional principal contract 13b, and 16. Other boxes must be for income is reportable if it is effectively completed if the nature of the payment connected with the conduct of a trade or requires it. Withholding Agents business in the United States. For more Note. You may leave box 6 blank if you information, see the regulations under are applying backup withholding to the All amounts must be reported in Chapter 3 of the Code and Pub. 515. payment being reported. U.S. dollars. CAUTION

! • Use only income, recipient, exemption,

and country codes specifically listed in Box 2, Gross Income

these instructions. Rounding Off For each income type, enter the gross • Use only tax rates that are allowed by amount you paid to or on behalf of the statute, regulation, or treaty. Do not to Whole Dollars recipient during calendar year 2008, attempt to “blend” rates. Instead, if You may round off cents to whole dollars. including withheld tax. The following necessary, submit multiple Forms 1042-S If you do round to whole dollars, you must special procedures apply to the reporting to show changes in tax rate. See the round all amounts. To round off amounts of gross income. Valid Tax Rate Table on page 14. to the nearest whole dollar, drop amounts • You must report the entire amount of a

All information you enter when under 50 cents and increase amounts corporate distribution made with respect from 50 to 99 cents to the next dollar. For reporting the payment must correctly to stock even if you elect to reduce the

reflect the intent of statute and example, $1.39 becomes $1 and $2.50 amount of withholding on the distribution

regulations. Generally, you should rely on becomes $3. If you have to add two or because all or a portion of the distribution

the withholding documentation you have more amounts to figure the amount to is nontaxable or represents a capital gain

collected (Form W-8 series, Form 8233, enter on a line, include cents when dividend.

etc.) to complete your Form 1042-S adding and only round off the total. • You must report the entire amount of a

submissions. payment if you do not know at the time of

Also note the following: AMENDED Box payment the amount that is subject to

• The gross income you report in box 2 withholding because the determination of

cannot be zero. at Top of Form the source of the income or the

• The income code you report in box 1 See Amended Returns on page 16. calculation of the amount of income

must correctly reflect the type of income subject to tax depends upon facts that are

PRO-RATA BASIS not known at the time of payment. you pay to the recipient.

• The withholding agent’s name, • You must report the entire amount of

address, and EIN, QI-EIN, WP-EIN, or REPORTING Box gains relating to the disposal of timber,

WT-EIN must be reported in boxes 11, Withholding agents must check this box coal, or domestic iron ore with a retained

12a, 12b, 12c, and 12d in all cases. to notify the IRS that an NQI that used the economic interest and gains relating to

• The recipient’s name, recipient code, alternative procedures of Regulations contingent payments received from the

address, and TIN, if any, must be section 1.1441-1(e)(3)(iv)(D) failed to sale or exchange of patents, copyrights,

reported in boxes 13 and 14. You must properly comply with those procedures. and similar intangible property.

generally report a foreign address. See See Pro-rata reporting beginning on page • You must report only the amount of 8 for additional information and examples. the instructions for box 13 on page 15. If cash paid on notional principal contracts.

you want, you can put the recipient’s

account number in box 22.

• The recipient code you report in box Box 1, Income Code Box 3, Withholding All filers must enter the appropriate 2-digit 13b must correctly identify the recipient’s income code from the list on page 12. Allowances

status. Use recipient code 20 only if you Use the income code that is the most This box should only be completed if the do not know who the recipient is. specific. For example, if you are paying income code reported in box 1 is 15 Note. If you cannot identify the recipient, bank deposit interest, you should use (scholarship or fellowship grants) or 16 the tax withheld must be 30%. code 29 (deposit interest), not code 01 (compensation for independent personal

• The recipient’s country code that you (interest paid by U.S. obligors—general). services). See Pub. 515 for more

report in box 16 must be present and If you paid more than one type of income information.

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box 5 is due to backup withholding, leave Boxes 7 and 9 must be completed Box 4, Net Income box 6 blank. in all cases, even if no tax has Complete this box only if you entered an 1. If exemption code 01 (income CAUTION actually been withheld.

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amount in box 3. Otherwise, leave it effectively connected with a U.S. trade or blank. business) may apply, you must enter the Box 10, Amount Repaid recipient’s U.S. TIN in box 14. If the Box 5, Tax Rate to Recipient recipient’s U.S. TIN is unknown or

Enter the correct rate of withholding that This box should be completed only if: unavailable, you must withhold tax at the

applies to the income in box 2 (gross foreign-person rate of 30% (30.00) and • You repaid a recipient an amount that

income) or box 4 (net income), as was overwithheld, and enter “00” in box 6.

appropriate. (See Valid Tax Rate Table 2. A withholding agent should use • You are going to reimburse yourself by

on this page.) The correct tax rate should reducing, by the amount of tax actually exemption code 06 (qualified intermediary

be included even if you withheld less than repaid, the amount of any deposit made that assumes primary withholding

that rate. For example, if an NQI is for a payment period in the calendar year responsibility) only if it is making a

reporting dividends paid to a beneficial following the calendar year of withholding. payment to a QI that has represented on

owner who is a resident of a country with its Form W-8IMY that it is assuming Generally, a QI should not enter an which the United States does not have a primary withholding responsibility under amount in box 10 unless it is a QI that has tax treaty and a U.S. withholding agent Chapter 3 of the Code. represented on its Form W-8IMY that it is paid the dividend and withheld only 15% 3. A withholding agent should use assuming primary withholding (rather than the required 30%) and the exemption code 07 (withholding foreign responsibility under Chapter 3 of the NQI withholds an additional 15%, the NQI partnership or withholding foreign trust) Code. should report “30.00” in box 5. See only if it is making a payment to a foreign You must also state on a timely filed Example 2 on page 11. partnership or trust that has represented Form 1042 for the calendar year of The tax rate on dividends paid to a that it is a withholding foreign partnership overwithholding that the filing of the Form corporation created or organized in, or or trust. 1042 constitutes a claim for refund. under the law of, the Commonwealth of 4. A withholding agent should use

Puerto Rico may be 10%, rather than exemption code 09 (qualified intermediary The adjustment for amounts

30%. See Pub. 515 for more information. represents income is exempt) only if it overwithheld do not apply to

makes a payment to a QI that has not CAUTION partnerships or nominees required

!

Enter the tax rate using the following assumed primary withholding to withhold under section 1446. format: two digits, a decimal, and two responsibility under Chapter 3 of the digits (for example, “30.00” for 30%).

However, if the income is exempt from tax Code or primary backup withholding Box 11, Withholding responsibility, but has represented on a under a U.S. tax treaty or the Code, enter withholding statement associated with its Agent’s Employer “00.00.” If the tax rate is less than 10%, Form W-8IMY that the income is exempt enter a zero before the tax rate (for Identification Number (EIN) from withholding. example, “04.00” for 4%). You are generally required to enter your 5. If you have failed to provide EIN. However, if you are filing Form If you withheld at more than one another withholding agent with 1042-S as a QI, withholding foreign tax rate for a specific type of appropriate information regarding the partnership, or withholding foreign trust, CAUTION income that you paid to the same status of the person to whom you are !

enter your QI-EIN, WP-EIN, or WT-EIN recipient, you must file a separate Form making a payment, the other withholding and check the QI-EIN box. 1042-S for each amount to which a agent may be required to withhold on the

separate rate was applied. payment based on the presumption rules. If you do not have an EIN, you can

apply for one online at If the income is in fact exempt from

Valid Tax Rate Table withholding, you must submit a Form www.irs.gov/businesses/small or by

1042-S providing the correct information. telephone at 1-800-829-4933. Also, you

can apply for an EIN by filing Form SS-4, 00.00 07.00 14.00 27.50 In this situation, you must: Application for Employer Identification a. Indicate the correct rate at which 04.00 08.00 15.00 28.00 Number. File amended Forms 1042-S the income should have been subject to when you receive your EIN. 04.90 10.00 17.50 30.00 withholding in box 5 (usually 00.00),

b. Enter “99” in box 6, and To get a QI-EIN, WP-EIN, or WT-EIN,

04.95 12.00 20.00 33.00 c. Enter the actual amount of U.S. submit Form SS-4 with your application

federal tax withheld by the other for that status. (See the definitions for 05.00 12.50 25.00 35.00 withholding agent in box 8. Qualified intermediary (QI) on page 3 and

Withholding foreign partnership (WP) or

You must also provide the correct withholding foreign trust (WT) on page 4 Box 6, Exemption Code recipient code and the name and address for more information.) Do not send an

Note. If you are filing a Form 1042-S to of the actual recipient in boxes 13a-e. application for a QI-EIN, WP-EIN, or

correct certain information already WT-EIN to the Ogden Service Center; it

provided to you by another withholding Boxes 7 Through 9, will not be processed.

agent on a Form 1099 or Form 1042-S

(for example, as required under Amounts Federal Tax Withheld Box 12, Withholding Paid by Nonqualified Intermediaries and Box 7. Enter the total amount of U.S. Agent’s Name Flow-Through Entities beginning on page federal tax you actually withheld in box 7. 10), see item 5 on this page. If you did not withhold any tax, enter “-0-.” and Address

Generally, if the tax rate you entered in Enter your name and address in the Box 8. If you are a withholding agent

box 5 is 00.00, you should enter the appropriate boxes. If your post office does filing a Form 1042-S to report income that

appropriate exemption code (01 through not deliver mail to the street address and has already been subject to withholding

09) from the list on page 12. you have a P.O. box, show the box by another withholding agent, enter the

amount actually withheld by the other number instead of the street address. If an amount was withheld under

Chapter 3 of the Code (the tax rate you If you are a nominee that is the agent(s) in box 8.

entered in box 5 is greater than zero and Box 9. Enter the aggregate amount of withholding agent under section 1446,

is not due to backup withholding), enter tax withheld by you and any other enter the PTP’s name and other

“00” in box 6. If the tax rate you entered in withholding agent in box 9. information in boxes 17 through 20.

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Note. On statements furnished to (private arrangement intermediary • Any WP or WT.

Canadian recipients of U.S. source withholding rate pool—exempt • Any nonresident alien individual

deposit interest, in addition to your name organizations), 15 (qualified intermediary claiming exemption from withholding on

and address, you must include the withholding rate pool—general), and 16 compensation for independent personal

telephone number of a person to contact. (qualified intermediary withholding rate services.

This number must provide direct access pool—exempt organizations). A QI • Any U.S. branch of a foreign bank or

to an individual who can answer should only use recipient code 14 or 16 foreign insurance company that is treated

questions about the statement. The for pooled account holders that have as a U.S. person.

telephone number is not required on claimed an exemption based on their In all other cases, if you know the Copy A of paper forms or on electronically tax-exempt status and not some other recipient’s TIN or if a foreign person filed forms. You must also include a exemption (for example, treaty or other provides a TIN on a Form W-8, but is not statement that the information on the form Code exception). A U.S. withholding required to do so, you must include the is being furnished to the United States agent making a payment to a QI should TIN on Form 1042-S. Internal Revenue Service and may be use recipient code 12.

furnished to Canada. Address. You must generally enter a Box 15, Recipient’s foreign address in boxes 13c through Box 13, Recipient’s 13e. However, there are limited Foreign Tax exceptions. For example, you may enter a Name, Recipient Code, Identifying Number U.S. address when reporting payments of

and Address scholarship or fellowship grants (income Enter the recipient’s identifying number

code 15). used in the country of residence for tax Name. Enter the complete name of the purposes (optional). For addresses outside the United recipient in box 13a. States or its possessions, follow the • If you do not know the name of the foreign country’s practice for entering the Box 16, Recipient’s recipient, enter “Unknown Recipient.” postal code. • If Form 1042-S is being completed by a Country Code QI, WP, or WT for a withholding rate pool, For addresses within the United You must enter the code (from the list that enter “Withholding rate pool” in box 13a. States, use the U.S. Postal Service begins on page 17) for the country of No address is necessary. 2-letter abbreviation for the state name. which the recipient claims residency • A QI reporting payments made to a PAI Do not enter “United States” or “U.S.” under that country’s tax laws. Enter “OC” on a withholding rate pool basis must If you want to enter the recipient’s (other country) only when the country of include the name and address of the PAI account number, use box 22. residence does not appear on the list or in boxes 13a through 13e. the payment is made to an international

Recipient code. Enter the recipient Box 14, Recipient’s U.S. organization (for example, the United

code from the list on page 12 in box 13b. Nations). Enter “UC” (unknown country)

The following special instructions apply. Taxpayer Identification only if the payment is to an unknown • If applicable, use recipient code 09 Number (TIN) recipient. If you are making a payment to

(artist or athlete) instead of recipient code a QI, WP, or WT or if you are a QI, WP, You must obtain and enter a U.S. 01 (individual), 02 (corporation), or 03 or WT and are making a payment to a QI, taxpayer identification number (TIN) for: (partnership other than a withholding WP, or WT withholding rate pool, enter • Any recipient whose income is foreign partnership). the country code of the QI, WP, or WT. effectively connected with the conduct of • Use recipient code 12 if you are making a trade or business in the United States. a payment to a QI and 04 if you are If exemption code 04 (exempt

making a payment to a WP or a WT. Note. For these recipients, exemption under tax treaty) appears in box 6

• If you are making a payment to an NQI code 01 should be entered in box 6. CAUTION or if a reduced rate of withholding

!

or flow-through entity, you generally must • Any foreign person claiming a reduced based on a tax treaty is entered in box 5,

use the recipient code that applies to the rate of, or exemption from, tax under a tax the country code entered in box 16 must

type of recipient who receives the income treaty between a foreign country and the be a country with which the United States

has entered into an income tax treaty. from the NQI or flow-through entity. United States, unless the income is an

• Use recipient code 03 (partnership unexpected payment (as described in

other than a withholding foreign Regulations section 1.1441-6(g)) or Boxes 17 Through 20, partnership) only if you are reporting a consists of dividends and interest from

payment of income that is effectively stocks and debt obligations that are NQI’s/Flow-Through

connected with the conduct of a trade or actively traded; dividends from any Entity’s Name, Country business of a nonwithholding foreign redeemable security issued by an

partnership in the United States. investment company registered under the Code, Address, and TIN

Otherwise, follow the rules that apply to Investment Company Act of 1940 (mutual If you are reporting amounts paid to a

payments to flow-through entities. fund); dividends, interest, or royalties from recipient whose withholding certificates or

• Use recipient code 20 (unknown units of beneficial interest in a unit other documentation has been submitted

recipient) only if you have not received a investment trust that are (or were, upon to you with a Form W-8IMY provided by

withholding certificate or other issuance) publicly offered and are an NQI or flow-through entity, you must

documentation for a recipient or you registered with the Securities and include the name, address, and TIN, if

cannot determine how much of a payment Exchange Commission under the any, of the NQI or flow-through entity with

is reliably associated with a specific Securities Act of 1933; and amounts paid whose Form W-8IMY the recipient’s Form

recipient. Do not use this code because with respect to loans of any of the above W-8 or other documentation is

you cannot determine the recipient’s securities. associated.

status as an individual, corporation, etc. • Any nonresident alien individual Note. An NQI or flow-through entity will The regulations under Chapter 3 of the claiming exemption from tax under leave these boxes blank unless it is Code provide rules on how to determine a section 871(f) for certain annuities making the payment to an NQI or recipient’s status when a withholding received under qualified plans. flow-through entity. agent does not have the necessary • A foreign organization claiming an

information. exemption from tax solely because of its For box 18, you must enter the country

• Only QIs may use recipient codes 13 status as a tax-exempt organization under code from the list beginning on page 17

(private arrangement intermediary section 501(c) or as a private foundation. for the country where the NQI or

withholding rate pool—general), 14 • Any QI. flow-through entity is located.

-15-
If you are a nominee that is the If you are filing electronically, see 6109 requires you to provide your

withholding agent under section 1446, Amended Returns in Pub. 1187. taxpayer identification number (SSN, EIN,

enter the PTP’s name and other or ITIN). Routine uses of this information If you are not filing electronically, information in these boxes. include giving it to the Department of follow these steps to amend a previously

filed Form 1042-S. Justice for civil and criminal litigation, and

Box 21, Payer’s Name and cities, states, and the District of Columbia Step 1. Prepare a paper Form 1042-S. for use in administering their tax laws. We Taxpayer Identification • Enter all the correct information on the may also disclose this information to other form, including the recipient name and Number (TIN) countries under a tax treaty, to federal address, money amounts, and codes. and state agencies to enforce federal See the definition of a payer on page 3. • Enter an “X” in the AMENDED box at nontax criminal laws, or to federal law Include the payer’s name and TIN if the top of the form. enforcement and intelligence agencies to different from that in boxes 11 and 12. AMENDED box. Enter an “X” in the combat terrorism. If you fail to provide this

Box 22, Recipient’s AMENDED box of Copy A only if you are information in a timely manner, you may amending a Form 1042-S you previously be liable for penalties and interest.

Account Number filed with the IRS. Enter an “X” in the You are not required to provide the AMENDED box you give to the recipient You may use this box to enter the information requested on a form that is only if you are correcting a Form 1042-S account number assigned by you to the subject to the Paperwork Reduction Act previously furnished to the recipient. You recipient. unless the form displays a valid OMB must provide statements to recipients control number. Books or records relating showing the corrections as soon as Boxes 23 Through 25, to a form or its instructions must be possible. retained as long as their contents may State Income Tax Withheld Step 2. File the amended paper Form become material in the administration of

and Related Information 1042-S with a Form 1042-T. See the any Internal Revenue law. Generally, tax Form 1042-T instructions for information returns and return information are Include in these boxes information on filing these forms. confidential, as required by section 6103. relating to any state income tax withheld. If you fail to correct Form(s) The time needed to complete and file

Amended Returns 1042-S, you may be subject to a this form will vary depending on individual

CAUTION penalty. See Penalties beginning circumstances. The estimated average !

If you filed a Form 1042-S with the IRS on page 11. time is 36 minutes. and later discover you made an error on

it, you must correct it as soon as possible. If you have comments concerning the Privacy Act and Paperwork Reduction To correct a previously filed Form 1042-S, accuracy of these time estimates or Act Notice. We ask for the information suggestions for making this form simpler, you will need to file an amended Form on this form to carry out the Internal 1042-S. we would be happy to hear from you. You Revenue laws of the United States. can write to the Internal Revenue Service, You may be required to submit Sections 1441, 1442, and 1446 (for Tax Products Coordinating Committee, amended Forms 1042-S PTPs) require withholding agents to SE:W:CAR:MP:T:T:SP, 1111 Constitution CAUTION electronically. See Electronic report and pay over to the IRS taxes !

Ave. NW, IR-6526, Washington, DC Reporting on page 2 and Pub. 1187. withheld from certain U.S. source income 20224. Do not send the form to this of foreign persons. Form 1042-S is used If any information you correct on address. Instead, see Where, When, and to report the amount of income and Form(s) 1042-S changes the information How To File on page 1. withholding to the payee. Form 1042 is you previously reported on Form 1042, used to report the amount of withholding you must also correct the Form 1042 by that must be paid over to the IRS. Section filing an amended return. To do this, see

the Form 1042 instructions.

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Country Codes Coral Sea Islands Territory2 . . . . . CR Kingman Reef . . . . . . . . . . . . . . . . KQ

Costa Rica . . . . . . . . . . . . . . . . . . CS Kiribati . . . . . . . . . . . . . . . . . . . . . . KR

Select the appropriate code from the following Cote D’Ivoire (Ivory Coast) . . . . . . . IV Korea, North . . . . . . . . . . . . . . . . . KN

list and enter it in box 16 (country code of Croatia . . . . . . . . . . . . . . . . . . . . . HR Korea, South . . . . . . . . . . . . . . . . KS

recipient). Also use the following codes to Cuba . . . . . . . . . . . . . . . . . . . . . . . CU Kosovo . . . . . . . . . . . . . . . . . . . . . KV complete box 18 (country code of NQI), if Cyprus . . . . . . . . . . . . . . . . . . . . . CY Kuwait . . . . . . . . . . . . . . . . . . . . . . KU applicable. See the instructions for box 16 (and Czech Republic . . . . . . . . . . . . . . EZ Kyrgyzstan1

box 18 if applicable) on page 15 before . . . . . . . . . . . . . . . . . KG

selecting a country code. Note. Countries Denmark . . . . . . . . . . . . . . . . . . . . DA Laos . . . . . . . . . . . . . . . . . . . . . . . LA

bolded and italicized are those with which the Dhekelia . . . . . . . . . . . . . . . . . . . . DX Latvia . . . . . . . . . . . . . . . . . . . . . . LG

United States had entered into an income tax Djibouti . . . . . . . . . . . . . . . . . . . . . DJ Lebanon . . . . . . . . . . . . . . . . . . . . LE

treaty at the time these instructions were Dominica . . . . . . . . . . . . . . . . . . . . DO Lesotho . . . . . . . . . . . . . . . . . . . . . LT

printed. Dominican Republic . . . . . . . . . . . . DR Liberia . . . . . . . . . . . . . . . . . . . . . . LI

Ecuador . . . . . . . . . . . . . . . . . . . . EC Libya . . . . . . . . . . . . . . . . . . . . . . . LY Country Code Egypt . . . . . . . . . . . . . . . . . . . . . . EG Liechtenstein . . . . . . . . . . . . . . . . . LS Afghanistan . . . . . . . . . . . . . . . . . . AF El Salvador . . . . . . . . . . . . . . . . . . ES Lithuania . . . . . . . . . . . . . . . . . . . LH Akrotiri . . . . . . . . . . . . . . . . . . . . . AX Equatorial Guinea . . . . . . . . . . . . . EK Luxembourg . . . . . . . . . . . . . . . . . LU Albania . . . . . . . . . . . . . . . . . . . . . AL Eritrea . . . . . . . . . . . . . . . . . . . . . . ER Macau . . . . . . . . . . . . . . . . . . . . . . MC Algeria . . . . . . . . . . . . . . . . . . . . . AG Estonia . . . . . . . . . . . . . . . . . . . . . EN Macedonia . . . . . . . . . . . . . . . . . . . MK American Samoa . . . . . . . . . . . . . . AQ Ethiopia . . . . . . . . . . . . . . . . . . . . . ET Madagascar (Malagasy Republic) . . MA Andorra . . . . . . . . . . . . . . . . . . . . . AN Falkland Islands (Islas Malvinas) . . . FK Malawi . . . . . . . . . . . . . . . . . . . . . MI Angola . . . . . . . . . . . . . . . . . . . . . AO Faroe Islands . . . . . . . . . . . . . . . . . FO Malaysia . . . . . . . . . . . . . . . . . . . . MY Anguilla . . . . . . . . . . . . . . . . . . . . . AV Fiji . . . . . . . . . . . . . . . . . . . . . . . . FJ Maldives . . . . . . . . . . . . . . . . . . . . MV Antarctica . . . . . . . . . . . . . . . . . . . AY Finland . . . . . . . . . . . . . . . . . . . . . FI Mali . . . . . . . . . . . . . . . . . . . . . . . . ML Antigua and Barbuda . . . . . . . . . . . AC France . . . . . . . . . . . . . . . . . . . . . FR Malta . . . . . . . . . . . . . . . . . . . . . . . MT Argentina . . . . . . . . . . . . . . . . . . . AR French Guiana3

Armenia1 . . . . . . . . . . . . . . . . . . . AM . . . . . . . . . . . . . . FG Marshall Islands . . . . . . . . . . . . . . . RM

French Polynesia . . . . . . . . . . . . . . FP Martinique3 . . . . . . . . . . . . . . . . . . MB Aruba . . . . . . . . . . . . . . . . . . . . . . AA French Southern and Antarctic Mauritania . . . . . . . . . . . . . . . . . . . MR Ashmore and Cartier Islands2 . . . . AT Lands . . . . . . . . . . . . . . . . . . . . FS Mauritius . . . . . . . . . . . . . . . . . . . . MP Australia . . . . . . . . . . . . . . . . . . . . AS Gabon . . . . . . . . . . . . . . . . . . . . . . GB Mayotte . . . . . . . . . . . . . . . . . . . . . MF Austria . . . . . . . . . . . . . . . . . . . . . AU Gambia, The . . . . . . . . . . . . . . . . . GA Mexico . . . . . . . . . . . . . . . . . . . . . MX Azerbaijan1 . . . . . . . . . . . . . . . . . . AJ Georgia1

Bahamas, The . . . . . . . . . . . . . . . . BF . . . . . . . . . . . . . . . . . . . . GG Micronesia, Federated States of . . . FM

Germany . . . . . . . . . . . . . . . . . . . GM Midway Islands . . . . . . . . . . . . . . . MQ Bahrain . . . . . . . . . . . . . . . . . . . . . BA Ghana . . . . . . . . . . . . . . . . . . . . . . GH Moldova1 . . . . . . . . . . . . . . . . . . . MD Baker Island . . . . . . . . . . . . . . . . . FQ Gibraltar . . . . . . . . . . . . . . . . . . . . GI Monaco . . . . . . . . . . . . . . . . . . . . . MN Bangladesh . . . . . . . . . . . . . . . . . BG Great Britain (United Kingdom) . . UK Mongolia . . . . . . . . . . . . . . . . . . . . MG Barbados . . . . . . . . . . . . . . . . . . . BB Greece . . . . . . . . . . . . . . . . . . . . . GR Montenegro . . . . . . . . . . . . . . . . . . MJ Belarus1 . . . . . . . . . . . . . . . . . . . . BO Greenland . . . . . . . . . . . . . . . . . . . GL Montserrat . . . . . . . . . . . . . . . . . . . MH Belgium . . . . . . . . . . . . . . . . . . . . BE Grenada . . . . . . . . . . . . . . . . . . . . GJ Morocco . . . . . . . . . . . . . . . . . . . . MO Belize . . . . . . . . . . . . . . . . . . . . . . BH Guadeloupe3 . . . . . . . . . . . . . . . . GP Mozambique . . . . . . . . . . . . . . . . . MZ Benin . . . . . . . . . . . . . . . . . . . . . . BN Guam . . . . . . . . . . . . . . . . . . . . . . GQ Namibia . . . . . . . . . . . . . . . . . . . . . WA Bermuda . . . . . . . . . . . . . . . . . . . . BD Guatemala . . . . . . . . . . . . . . . . . . . GT Nauru . . . . . . . . . . . . . . . . . . . . . . NR Bhutan . . . . . . . . . . . . . . . . . . . . . BT Guernsey . . . . . . . . . . . . . . . . . . . GK Navassa Island . . . . . . . . . . . . . . . BQ Bolivia . . . . . . . . . . . . . . . . . . . . . . BL Guinea . . . . . . . . . . . . . . . . . . . . . GV Nepal . . . . . . . . . . . . . . . . . . . . . . NP Bosnia-Herzegovina . . . . . . . . . . . . BK Guinea-Bissau . . . . . . . . . . . . . . . . PU Netherlands . . . . . . . . . . . . . . . . . NL Botswana . . . . . . . . . . . . . . . . . . . BC Guyana . . . . . . . . . . . . . . . . . . . . . GY Netherlands Antilles . . . . . . . . . . . . NT Bouvet Island . . . . . . . . . . . . . . . . . BV Haiti . . . . . . . . . . . . . . . . . . . . . . . HA New Caledonia . . . . . . . . . . . . . . . NC Brazil . . . . . . . . . . . . . . . . . . . . . . BR Heard Island and McDonald Islands HM New Zealand . . . . . . . . . . . . . . . . . NZ British Indian Ocean Territory . . . . . IO Holy See . . . . . . . . . . . . . . . . . . . . VT Nicaragua . . . . . . . . . . . . . . . . . . . NU Brunei . . . . . . . . . . . . . . . . . . . . . . BX Honduras . . . . . . . . . . . . . . . . . . . HO Niger . . . . . . . . . . . . . . . . . . . . . . . NG Bulgaria . . . . . . . . . . . . . . . . . . . . . BU Hong Kong5 . . . . . . . . . . . . . . . . . . HK Nigeria . . . . . . . . . . . . . . . . . . . . . NI Burkina Faso . . . . . . . . . . . . . . . . . UV Howland Island . . . . . . . . . . . . . . . HQ Niue . . . . . . . . . . . . . . . . . . . . . . . NE Burma . . . . . . . . . . . . . . . . . . . . . . BM Hungary . . . . . . . . . . . . . . . . . . . . HU Norfolk Island2 . . . . . . . . . . . . . . . NF Burundi . . . . . . . . . . . . . . . . . . . . . BY Iceland . . . . . . . . . . . . . . . . . . . . . IC Northern Ireland4 . . . . . . . . . . . . . UK Cambodia . . . . . . . . . . . . . . . . . . . CB India . . . . . . . . . . . . . . . . . . . . . . . IN Northern Mariana Islands . . . . . . . . CQ Cameroon . . . . . . . . . . . . . . . . . . . CM Indonesia . . . . . . . . . . . . . . . . . . . ID Norway . . . . . . . . . . . . . . . . . . . . . NO Canada . . . . . . . . . . . . . . . . . . . . . CA Iran . . . . . . . . . . . . . . . . . . . . . . . . IR Oman . . . . . . . . . . . . . . . . . . . . . . MU Cape Verde . . . . . . . . . . . . . . . . . . CV Iraq . . . . . . . . . . . . . . . . . . . . . . . . IZ Pakistan . . . . . . . . . . . . . . . . . . . . PK Cayman Islands . . . . . . . . . . . . . . . CJ Ireland . . . . . . . . . . . . . . . . . . . . . EI Palau . . . . . . . . . . . . . . . . . . . . . . PS Central African Republic . . . . . . . . . CT Isle of Man . . . . . . . . . . . . . . . . . . IM Palmyra Atoll . . . . . . . . . . . . . . . . . LQ Chad . . . . . . . . . . . . . . . . . . . . . . . CD

Chile . . . . . . . . . . . . . . . . . . . . . . . CI Israel . . . . . . . . . . . . . . . . . . . . . . IS Panama . . . . . . . . . . . . . . . . . . . . PM

Italy . . . . . . . . . . . . . . . . . . . . . . . IT Papua New Guinea . . . . . . . . . . . . PP China . . . . . . . . . . . . . . . . . . . . . . CH Jamaica . . . . . . . . . . . . . . . . . . . . JM Paracel Islands . . . . . . . . . . . . . . . PF Christmas Island2 . . . . . . . . . . . . . KT Jan Mayen . . . . . . . . . . . . . . . . . . JN Paraguay . . . . . . . . . . . . . . . . . . . PA Clipperton Island . . . . . . . . . . . . . . IP Japan . . . . . . . . . . . . . . . . . . . . . . JA Peru . . . . . . . . . . . . . . . . . . . . . . . PE Cocos (Keeling) Islands2 . . . . . . . CK Jarvis Island . . . . . . . . . . . . . . . . . DQ Philippines . . . . . . . . . . . . . . . . . . RP Colombia . . . . . . . . . . . . . . . . . . . . CO Jersey . . . . . . . . . . . . . . . . . . . . . . JE Pitcairn Island . . . . . . . . . . . . . . . . PC Comoros . . . . . . . . . . . . . . . . . . . . CN Johnston Atoll . . . . . . . . . . . . . . . . JQ Poland . . . . . . . . . . . . . . . . . . . . . PL Congo (Brazzaville) . . . . . . . . . . . . CF Jordan . . . . . . . . . . . . . . . . . . . . . . JO Portugal . . . . . . . . . . . . . . . . . . . . PO Congo, Democratic Republic of Kazakhstan . . . . . . . . . . . . . . . . . KZ Puerto Rico . . . . . . . . . . . . . . . . . . RQ (Kinshasa) . . . . . . . . . . . . . . . . . CG Kenya . . . . . . . . . . . . . . . . . . . . . . KE Qatar . . . . . . . . . . . . . . . . . . . . . . QA Cook Islands . . . . . . . . . . . . . . . . . CW

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Reunion3 . . . . . . . . . . . . . . . . . . . RE Spratly Islands . . . . . . . . . . . . . . . . PG Uruguay . . . . . . . . . . . . . . . . . . . . UY

Romania . . . . . . . . . . . . . . . . . . . . RO Sri Lanka . . . . . . . . . . . . . . . . . . . CE Uzbekistan1 . . . . . . . . . . . . . . . . . UZ

Russia . . . . . . . . . . . . . . . . . . . . . RS Sudan . . . . . . . . . . . . . . . . . . . . . . SU Vanuatu . . . . . . . . . . . . . . . . . . . . NH

Rwanda . . . . . . . . . . . . . . . . . . . . . RW Suriname . . . . . . . . . . . . . . . . . . . . NS Venezuela . . . . . . . . . . . . . . . . . . . VE

St. Barthelemy . . . . . . . . . . . . . . . . TB Svalbard . . . . . . . . . . . . . . . . . . . . SV Vietnam . . . . . . . . . . . . . . . . . . . . . VM

St. Helena . . . . . . . . . . . . . . . . . . . SH Swaziland . . . . . . . . . . . . . . . . . . . WZ Virgin Islands (British) . . . . . . . . . . . VI

St. Kitts (St. Christopher Sweden . . . . . . . . . . . . . . . . . . . . SW Virgin Islands (U.S.) . . . . . . . . . . . . VQ

and Nevis) . . . . . . . . . . . . . . . . . SC Switzerland . . . . . . . . . . . . . . . . . SZ Wake Island . . . . . . . . . . . . . . . . . WQ

St. Lucia . . . . . . . . . . . . . . . . . . . . ST Syria . . . . . . . . . . . . . . . . . . . . . . . SY Wallis and Futuna . . . . . . . . . . . . . WF

St. Martin . . . . . . . . . . . . . . . . . . . RN Taiwan . . . . . . . . . . . . . . . . . . . . . TW Western Sahara . . . . . . . . . . . . . . . WI

St. Pierre and Miquelon . . . . . . . . . SB Tajikistan1 . . . . . . . . . . . . . . . . . . TI Yemen . . . . . . . . . . . . . . . . . . . . . YM

St. Vincent and the Grenadines . . . . VC Tanzania . . . . . . . . . . . . . . . . . . . . TZ Zambia . . . . . . . . . . . . . . . . . . . . . ZA

Samoa . . . . . . . . . . . . . . . . . . . . . WS Thailand . . . . . . . . . . . . . . . . . . . . TH Zimbabwe . . . . . . . . . . . . . . . . . . . ZI

San Marino . . . . . . . . . . . . . . . . . . SM Timor-Leste . . . . . . . . . . . . . . . . . . TT Other Country . . . . . . . . . . . . . . . . OC

Sao Tome and Principe . . . . . . . . . TP Togo . . . . . . . . . . . . . . . . . . . . . . . TO Unknown Country . . . . . . . . . . . . . UC

Saudi Arabia . . . . . . . . . . . . . . . . . SA Tokelau . . . . . . . . . . . . . . . . . . . . . TL 1 These countries are parties to the Senegal . . . . . . . . . . . . . . . . . . . . SG Tonga . . . . . . . . . . . . . . . . . . . . . . TN United States treaty with the Serbia . . . . . . . . . . . . . . . . . . . . . . RB Trinidad and Tobago . . . . . . . . . . TD Commonwealth of Independent States. Seychelles . . . . . . . . . . . . . . . . . . . SE Tunisia . . . . . . . . . . . . . . . . . . . . . TS 2 Sierra Leone These countries are covered under . . . . . . . . . . . . . . . . . SL Turkey . . . . . . . . . . . . . . . . . . . . . TU the United States treaty with Australia. Singapore . . . . . . . . . . . . . . . . . . . SN Turkmenistan1 . . . . . . . . . . . . . . . TX 3 Slovak Republic (Slovakia) These countries are covered under . . . . . . LO Turks and Caicos Islands . . . . . . . . TK

Slovenia the United States treaty with France. . . . . . . . . . . . . . . . . . . . . SI Tuvalu . . . . . . . . . . . . . . . . . . . . . . TV 4 Solomon Islands . . . . . . . . . . . . . . BP Uganda . . . . . . . . . . . . . . . . . . . . . UG Northern Ireland is covered under the

Somalia . . . . . . . . . . . . . . . . . . . . . SO Ukraine . . . . . . . . . . . . . . . . . . . . . UP United States treaty with the United

South Africa Kingdom. . . . . . . . . . . . . . . . . . SF United Arab Emirates . . . . . . . . . . . AE 5 South Georgia and the South United Kingdom (England, Wales, Hong Kong is not covered under the

Sandwich Islands . . . . . . . . . . . . SX Scotland, No. Ireland) . . . . . . . . UK United States treaty with China.

Spain . . . . . . . . . . . . . . . . . . . . . . SP

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