May 17, 2013: New Draft Form W-9
Foreign Account Tax Compliance Act (FATCA)
New draft form W-9
On May 17, 2013, the IRS has released a new draft version of the Form W-9. The new form adds two new fields; one to indicate the type of entity that is exempt from back-up withholding and the other to indicate the type of entity that is exempt from FATCA withholding. The instructions include an updated list of exempt payees for back-up withholding with a corresponding code to be entered into the new field, if applicable. The list removes the international organization and foreign central bank of issue payee types that are included in the current version of the form (Rev. 12-2011). The instructions to the exempt payee section also incorporate section 6050W changes related to payments made to settle payment card or third party network transactions. The instructions on page 3 make it clear that corporations are not exempt from backup withholding for such payments.
Similar to the exempt payee list, the instructions include a list of FATCA exempt payees with corresponding codes. The list includes publically traded corporations and affiliates, the U.S. and any of its agencies or instrumentalities, security dealers, REITS, brokers, banks, and others. To go along with the new FATCA exemption code, the certification section has been updated with a new line to certify under penalties of perjury that any FATCA exemption code entered on the form is correct.
The IRS had commented recently that the Form W-9 was going to be updated for FATCA and to better capture exempt payee information. The updated form clearly fulfills that promise and further hints that the "eye ball" exempt test as we know it today will be going away when the service issues updated chapter 61 regulations.
As used in this document, “Deloitte” means Deloitte Tax LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.