On July 26, the IRS released a draft version of the Form W-9 (Rev. October 2023). There are several changes to the W-9 form, notably:
- Line 3b now permits partnerships, trusts, and estates to declare their foreign partners, owners, or beneficiaries when prompted for a Form W-9. Given they’ve chosen “Partnership” or “Trust/Estate” as their federal tax classification on line 3b. This modification aims to equip flow-through entities with details on the status of their indirect foreign partners, owners, or beneficiaries for fulfilling relevant reporting obligations. For instance, a partnership with indirect foreign partners might need to fill out Schedules K-2 and K-3.
- The New instructions now requires you to check line 3b if you have received a Form W-8 (or supporting documentary evidence) from any partner, owner, or beneficiary indicating foreign status. Also, make sure to check line 3b if a Form W-9 is received from any partner, owner, or beneficiary who has marked the box on line 3b.
- The updated instructions now state that if you are a qualified foreign pension fund under Regulations section 1.897(l)-1(d) or a partnership entirely owned by qualified foreign pension funds, treated as a non-foreign entity for section 1445 withholding purposes, refrain from using Form W-9. Instead, use Form W-8EXP (or other certification of non-foreign status).
- The draft form instructions also includes a note that for more information on optional filing methods for grantor trusts, see the Instructions for Form 1041.
You can find the draft version of the Form W-9 and instructions here.