Form 1042/1042-S Reporting

Author: Steven D. Mercatante

The IRS is heavily focusing its nonresident alien tax regulations compliance audits on accounts payable operations. If your organization outsources work to an overseas contractor, if you bring a foreign contractor in for short-term work, or if you are asked to pay a foreign consultant’s invoice, this course will help you to make sense of the regulations surrounding payments to foreign vendors.

Publication Date: October 2022

Designed For
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Topics Covered

• The Big Picture: 1042-S Audits Up
• New W-8's
• The W-9
• W-9/W-8 Validation For 1042/1042-S Filing
• W-9/W-8 Data Validation Can Flow Together - Presumptions
• Must Have AW-9/W-8 Due Diligence Framework In Place Or Face Consequences
• W-9/W-8 Payee/Payment In Practice
• Who Is My Payee? Non-U.S. Status Red Flags
• Who Is My Payee? U.S. or Non-U.S.
• Who Is My Payee? Resident Alien Visas
• Who Is My Payee? Resident Aliens and Counting Days
• Who Is My Payee? Special Entity Rules
• Who Is My Payee? W-9 vs. W-9 Basic Rules
• Avoiding penalties: Best practices for best results
• W-8 and Purchase Invoices
• 1042-S Reportable Income
• W-8 Payment Sourcing
• W-8's & Treaty Benefits
• Wrap Up of General W-8 Validation Tips
• Filing Form 1042/1042-S
• Filing Fundamentals
• Filing Fundamentals Recent Changes to Form 1042-S Information Returns
• Filing Fundamentals Form 1042-S Information Returns
• File on Time and Try to Avoid Those Penalties
• Protect Yourself

Learning Objectives

• Recognize how to distinguish a 1042-S reportable non-resident alien payee from a 1099 reportable resident alien or U.S. citizen payee
• Recognize how to handle visas, green cards, and using the IRS substantial presence
• Describe why where the services is performed is so important to determine your 1042-S reporting responsibilities
• Recognize how to use the Forms W-8 and 8233 to validate payee claims for treaty benefits
• Identify how to address rules for 1042-S tax withholding and how to report it
• Recognize who the IRS is referencing when they say "foreign person"
• Recognize where royalty payments are sourced to
• Recognize what you may be dealing with if you receive a social security formatted looking number beginning with "98"
• Identify the W-8BEN-E's line that must be completed for a valid treaty benefit claim
• Identify the TIN if the payee is a non-resident alien

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None