Forms W-8 Foreign TINs
The new version of Form W-8BEN and Form W-8BEN-E requires a foreign tax identification number. IRS has stated it will issue transitional rules for pre-2018 forms. In the meantime, financial institutions may use FTINs they have on other account records.
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. The rule would be effective after a comment period and final regulations are issued.
B Notice Procedure Update
The IRS has issued revised procedures for individual (with SSNs) customers who have appeared twice in three years on the name/TIN mismatch listing, i.e., B Notice and who must get their name and SSN validated to avoid or stop backup withholding. The new procedure states that a copy of the customer's SSA card may be provided to the payor who may rely on the card (to not withhold) if the name and SSN is different than the name and TIN combination appearing on the second B Notice OR there is a date on the card that is no earlier than six months prior to the date of the second B Notice. If the payee does not have a Social Security card, they must obtain one from SSA.
Truncation of TINs
The IRS issued final regulations providing rules for truncating TINs (TTINs) including EINs and SSNs on recipient statements. TTINs can now be used on electronic recipient statements in addition to paper statements. TTINs are not allowed on returns (i.e., Copy A or electronic) filed with the IRS.