IRS Releases New IRS Form W8-BEN: U.S. persons beware of completing such form at the request of a third party

The long awaited revised IRS Form W8-BEN has been recently released in July  2017.  The major changes to IRS Forms W8, particularly W-8BEN-E (which is still in draft form), have been driven by the changes in the law under FATCA.

The new IRS Form W-8BEN and its instructions are accessible here.

Importantly, no U.S. citizen can legally sign and certify they are NOT a “U.S. person” under U.S. federal tax law.  Hence, they cannot sign and complete IRS Form W-8BEN.

The form, as is true with all IRS forms, is signed under penalty of perjury.

Some key highlights of information on new IRS Form W-8BEN is set out below:

Importantly, lawful permanent residents (“LPRs”) have a much more complicated analysis to undertake to determine whether they ARE or are NOT a “U.S. person.”

One of the key considerations of this determination is whether the individual lives in the U.S. or is living outside the U.S. in a country which has a U.S. income tax treaty with the U.S. Form W-8 is generally filled out by foreign non-US entities or persons (citizens and corporations) in order to claim exempt status from certain tax withholdings. The form is used to declare an entity’s status as non-resident alien or foreign national who works outside of the United States. The benefit is that these individuals receive a certain tax treaty status that affords them certain right, such as lower withholdings from dividends paid by US corporations.

W-8 forms are not the simple tax form the average taxpayer can easily navigate. If you’re one of the few taxpayers required by the IRS to fill out Forms W-8, you would be well-served to consult an experience US tax professional with international tax experience.

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