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Draft Form W-9: Everything You Need to Know

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.

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Draft Form W-9
Draft Form W-9

This document contains general information only and is not a substitute for accounting, tax, or any other professional advice or services. The information provided is considered accurate at the time of publishing and will not be updated with new regulation requirements.

Comply Connect April 2024 – Issue 10

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