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InfoSight Highlight: IRS Form W-8BEN
Friday, September 15, 2017 7:00 AM

IRS Form W-8BEN is a form that every nonresident alien who wishes to open a new account with a credit union must complete. Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding) replaced Form W-8 (Certificate of Foreign Status) as of Jan. 1, 2001.

Effective Jan. 1, 2017, a Form W-8BEN is required to contain the foreign person’s foreign TIN and, in the case of an individual accountholder, the foreign person’s date of birth in order for the credit union to treat the form as valid.

For Form W-8BENs associated with payments to be made beginning on Jan. 1, 2018, if a foreign person does not have a foreign TIN, the foreign person is required to provide a “reasonable explanation” as to why this information was not collected (e.g., the country of residence does not provide TINs) in order for the form to not be considered invalid. A Form W-8BEN that does not contain the foreign person’s date of birth will not be considered invalid if the credit union has the foreign person’s date of birth information in its files.

A reasonable explanation is described as a statement that the foreign person is not legally required to obtain a TIN in the foreign person’s jurisdiction of tax residence. The explanation may be written on line 6 of the Form W-8BEN, in the margins of the form, or on a separate attached statement associated with the form. If the foreign person is writing the explanation on line 6 of the form, the foreign person may shorten it to state “not legally required.” The foreign person is unable to write “not applicable.”

In addition, if the foreign person is not using the Form W-8BEN to document a financial account, the foreign person may provide the foreign TIN issued by the foreign person’s jurisdiction of tax residence on line 6 of Form W-8BEN for purposes of claiming treaty benefits (rather than providing a U.S. TIN on line 5 of Form W-8BEN, if required).

Source: InfoSight Compliance.

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