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The IRS announced the availability of the Form 1042-S Data Integrity Tool


On November 15, 2021, the Internal Revenue Service (IRS) made a significant announcement regarding the launch of its Form 1042-S Data Integrity Tool, marking a crucial step forward in enhancing tax compliance for withholding agents. This innovative software program offers a no-cost standalone solution designed to empower withholding agents in fulfilling their reporting and withholding obligations related to Form 1042-S, which pertains to Foreign Person’s U.S. Source Income Subject to Withholding.

The introduction of the Form 1042-S Data Integrity Tool represents a proactive response by the IRS to streamline and simplify the information reporting process for withholding agents. By providing a user-friendly software program, the IRS aims to facilitate accurate and efficient reporting of Form 1042-S data, thereby promoting compliance with regulatory requirements and minimizing the risk of errors or discrepancies.

Withholding agents will use the tool in order to perform a quality review of data prior to submission to the IRS. Although use of the tool will not change any obligations to file Forms 1042-S with the IRS and furnish a copy of the Form 1042-S to the payee, the IRS will consider whether a withholding agent is using the tool when making enforcement and penalty determinations.

This is a great way to validate your Form 1042-S data prior to filing!

Check out the IRS release and how to register for the tool here:

https://www.irs.gov/businesses/international-businesses/form-1042-s-data-integrity-tool

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1042-S Data Integrity Tool

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 – March 2024 – Issue 9

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