In a post in September we talked about some of the responsibilities of the ‘Responsible Officer’ within your financial organisation. This post was, unfortunately, just the tip of the iceberg, as there are many more duties the responsible officer takes on. The IRS is continually updating their forms, instructions and publications and this is another of the responsibilities of a RO (and their team). To ensure that these changes are known about and the company is using the most up to date forms or instructions, and referring to the correct information in the updated publications, your responsible officer must be on the ball.

The IRS has just issued six draft forms, instructions and a publication, and these draft versions give you the opportunity to review and comment about the forms/instructions/publications, helping shape them before the IRS issues them for use. So now is the time as a FI, Withholding Agent or corporation to have your say and change the way things are done. More importantly, these drafts help you prepare your company for any changes that will need to be adopted in order to remain compliant and provide a quality service for your clients.

The recent draft is below:

• Form 1042 – Annual Withholding Tax Return for U.S. Source Income of Foreign Persons
• 1042 – Instructions for Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons
• Form 1042-S – Foreign Person’s U.S. Source Income Subject to Withholding
• 5884 – Instructions for Form 5884, Work Opportunity Credit
• 5223 – General Rules and Specifications for Affordable Care Act Substitute Forms 1095-A, 1094-B, 1095-B, 1094-C and 1095-C
• 1094-B & 1095-B – Instructions for Forms 1094-B and 1095-B

Instructions for submitting comments on these documents are on the cover pages for each of the draft documents, or you can go to the IRS website section for comments. These draft forms cannot be used until the IRS releases them as final and working documents.

The IRS has also issued an up to date Publication 1220 which is for 1099 Reporting for the Tax Year 2016, which is in our GATCA Library together with the draft forms and instructions of the 1042 and 1042-S. Our GATCA Library has now over 700 documents and is being continually updated with documents covering QI (Chapter 3), FATCA (Chapter 4), C.DOT, AEoI, CRS the EU and many other areas regarding international tax and exchange of information. To visit the GTACA library and sign up to regular updates to those documents, just click here.

We at TConsult Ltd will analyse the documents that we come into contact with and affect our clients directly, (see our recent post “Time is running out for the 2014 Form W-8BEN-E” for an example). In this case, it is primarily form 1042, 1042-S and the instructions for form 1042-S, from the latest draft releases. We will provide commentary on what has changed and our opinion of how these changes affect our clients’ business and processes, which is just a small part of the service they sign up for when they come on board.

Want to know more? Contact [email protected] to pick our brains.