Final Form W-8BEN

The IRS has finalized Form W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals).  The form is dated July 2017 so it may be used immediately.  The form lasts for three years plus any portion remaining in the year signed.  

This form is used by foreign INDIVIDUALS (versus entities who use Form W-8BEN-E) to certify their status as an NRA.  Box 6 requires a foreign tax identification number (FTIN), and box 8 requires a date of birth.  Recall that a few weeks ago, IRS issued transitional rules regarding FTINs in Notice 2017-46.  Notice 2017-46 addresses when a Form W-8 is invalid due to lack of an FTIN and becomes subject to withholding.  The Instructions for Form W-8BEN indicate if an FTIN is not provided, the customer must provide an explanation such as their country of residence does not issue TINs.  The payer will then need to determine if this is correct by verifying with the online IRS list (currently contains only three countries:  British Virgin Islands, Cayman, and Bermuda which do not issue taxpayer identification numbers).  


The Trade Preferences Extension Act (H.R. 1295) included §806, a provision which increased penalties from $100 to $250 and $250 to $500 for intentional disregard.  Late filings will increase from $30 to $60 and $60 to $100 depending on whether more or less than 30 days.  The penalties are now indexed to inflation.  The cap (or maximum penalty per year) will increase from $1.5 million to $3 million for most filers. 


The PATH Act included a provision for less than $100 de minimis dollar amount errors on Forms 1099 that do not have to be corrected, unless the customer elects to receive a correction.  

Form 1099-C Reporting Regulations

The IRS has eliminated the 36 month nonpayment testing period identifiable event.  Currently, under IRC §6050P, a lender must report on Form 1099-C one of eight identifiable events including when it has not received a payment for 36 months.  

Proposed Legislation

Bill H.R. 3717 Small Business Owner's Simplification Act of 2017 has been introduced to raise the Form 1099-MISC reporting threshold from $600 to $1,500 and lower the Form 1099-K to $1,500.  

New Box on Form 1098 Mortgage Interest

The IRS has added box 10 to the 2017 Form 1098 to report multiple pieces of real property that secure the mortgage.  This 2017 new box is in addition to the six new boxes on the 2016 form.