Updates to the W-9 Form. Draft review
On November 7, 2014 the IRS released a draft of the new W-9 form. The IRS has provided a copy of the draft and instructions on its website for information. The W-9 form cannot be used at the current time and it is advisable that August 2013 W-9 form is to be used.
The new version of W-9 may have unexpected issues due to new legislation that may be passed. Therefore the draft version may be changed prior to the release of the final version.
Printech Global Secure Payments Solutions as well as other companies in the USA use this form to obtain correct information about individual contractors, vendor companies, including name of the company or individual, TIN, address. This information is used to provide reports to the IRS.
IRS report driven by W-9 Form can include:
- income paid to contractors / vendors
- real estate transactions
- mortgage interest
- acquisition or abandonment of secured property
- cancellation of debt
- contributions made to an IRA
Form W-9 is used to request a taxpayer identification number of a U.S. individual, including a resident alien. It I also used to request certain certifications and claims for exemption. Failure to comply with Form W-9 can result in backup withholding up to 27% of the total amount due, as well as penalties.
The main change is explained in draft instructions to the November 7, 2014 W-9 draft. Foreign Account Tax Compliance Act (FATCA) targets tax non-compliance by U.S. taxpayers with foreign accounts and focuses on reporting of the following information:
- Certain foreign accounts and offshore assets of U.S. taxpayers;
- Information from financial institutions about financial accounts held by U.S. taxpayers.
FATCA requires that foreign financial institution report all U.S. account holders. There is an “exemptions box” on the front of the form where the exempt payee code (if any) may be entered. The code is for claiming an exemption from FATCA reporting.
The draft Form of W-9 from November 7, 2014 and instructions for 2014 are subject to change and approval before the official release.
See the draft of W-9 form and instructions.