Last week the IRS updated the instructions for a pair of important forms:  Form @-8BEN-E, “Certificate of Status of Beneficial Owner for United States Tax” and Form 8966, “FATCA Report.”  Tax Analysts contacted two leading practitioners, Deborah J. Pflieger of EY, Laurie Hatten-Boyd of KPMG, and Cheryl S. Riedlinger of the Tax Reporting Group, regarding their impressions on the new instructions.

The practitioners were generally satisfied with the instructions, with a few notable exceptions:

  • The W-8BEN-E instructions rely too heavily on references to the FATCA regulations, according to Hatten-Boyd.  This may cause foreign persons to need legal counsel to fill out the document.
  • Instructions for Line 5 of the W-8BEN-E may make it difficult for withholding agents to explain to clients why they need to provide their chapter 4 status before July 1, 2016, according to Pflieger.
  • Hatten-Boyd and Pflieger feel that there are still significant deficiencies in the W-8BEN-E instructions for institutions in the process of updating their systems to align with the form.
  • The instructions fof the FATCA Report do not fully clarify whether U.S. payers of withholdable payments need to report information on Form 8966, Form 1099, or both.

The new W-8BEN-E instructions can be found here.

See Jamie Arora, “New FATCA Form Instructions Clear Up Some Questions,” Tax Notes Today (June 26, 2014).

Posted by Conan Yuzna, Associate Editor, Wealth Strategies Journal.