IRS Announces Increased Focus on International Tax Compliance
Tier 1 Compliance Issue: Withholding and Reporting
of Payments to Foreign Individuals and Entities
The IRS announced that future audits will concentrate on an organization’s
quality of overall reporting, withholding systems, and procedures to ensure:
- Proper classification of payments
- Proper sourcing of income
- Validity of documentation of foreign individuals and entities
Click
here to read the full article from the IRS.
The IRS plans to hire 2,400 new international revenue agents by
2010! Now is the time to make sure your organization is prepared!
Windstar Technologies can help you minimize your compliance exposure. Since
1995, Windstar has helped countless organizations comply with IRS regulations
on nonresident alien taxation. Windstar’s industry leading International
Tax Navigator® software gives you the confidence you need in your
NRA tax processing with the ability to:
- Determine tax residency status accurately
- Create a solid audit trail
- Produce all required IRS withholding certificates and Form 1042 tax
return and 1042-S reporting forms
- Gain a wealth of knowledge on tax and immigration issues
Determine Tax Residency Status Accurately
By automatically performing the complex Substantial Presence Test, Tax
Navigator determines US tax residency status, resident or nonresident,
using an individual’s immigration status history and days of U.S.
presence. With this analysis you can provide correct withholding tax
rates, along with tax and treaty exemptions.
Create
a Solid Audit Trail
Tax Navigator provides you added confidence should the IRS
audit your organization. The software provides auditors:
- Due diligence support
- Custom reports of foreign nationals receiving
payments from your organization
- Payment support documentation
Produce all required IRS withholding certificates and Form 1042
tax return and 1042-S reporting forms
Tax Navigator allows you to produce required forms for your
organization, preparing and printing the following forms:
- Form 1042, Annual Withholding Tax Return for U.S. Source Income for
Foreign Persons
- Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding
- Form 1042-T, Annual summary and transmittal of forms 1042-S
- Form 8233, Exemption from Withholding and Supporting Certifying Statement
- Form 8833, Treaty-Based Return Disclosure
- Form 8843, Statement for Exempt Individuals
- W-8BEN, Certificate of Foreign Status
- W-4, Employee’s Withholding Certificate
- W-9, Certificate of US Status
- W-7, Application for Individual Taxpayer ID (ITIN)
- I-9, Employment Eligibility Verification
- SS-5, Application for Social Security Card
You can also print the form and instructions for W-8ECI, Certificate of
Foreign Person Claiming Withholding Exemption, and the form and instruction
for W-8IMY, Certificate of Foreign Intermediary.
In addition, Tax Navigator can
automate year-end processing and calculation by preparing all
1042-S information returns and producing your 1042-S electronic file. Tax
Navigator totals and reconciles all 1042-S file totals with your 1042
tax return – eliminating hours of manual work while creating forms
that the IRS will accept.
Gain a wealth of knowledge on tax and immigration issues
Tax Navigator clients receive unmatched
support and extensive, searchable information and content in
nonresident alien taxation and immigration. Your license gives
you access to a clients-only website and listserv where you will find
the latest tax and immigration information. The listserv also allows
you to ask your peers software and processing questions.
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