Guide to Global Payroll Management - 2020 - D-52

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Guide to Global Payroll Management

Instructions for the
Requester of Form W-9

Department of the Treasury
Internal Revenue Service

(Rev. October 2018)

Request for Taxpayer Identification Number
and Certification
Section references are to the Internal Revenue Code unless
otherwise noted.

partnership's effectively connected income. For more
information, see Regulations section 1.1446-1.

Future Developments

A participating foreign financial institution (PFFI) should
request Form W-9 from an account holder that is a U.S. person.
If an account is jointly held, the PFFI should request a Form W-9
from each holder that is a U.S. person.

For the latest developments related to Form W-9 and its
instructions, such as legislation enacted after they were
published, go to IRS.gov/FormW9.

What's New

Backup withholding rate. The backup withholding rate is 24%
for reportable payments.

Reminders

Electronic Submission of Forms W-9

Backup withholding liability. If you do not collect backup
withholding from affected payees as required, you may become
liable for any uncollected amount.

Payee's agent. A payee's agent can be an investment advisor
(corporation, partnership, or individual) or an introducing broker.
An investment advisor must be registered with the Securities
and Exchange Commission (SEC) under the Investment
Advisers Act of 1940. The introducing broker is a broker-dealer
that is regulated by the SEC and the National Association of
Securities Dealers, Inc., and that is not a payer. Except for a
broker who acts as a payee's agent for "readily tradable
instruments," the advisor or broker must show in writing to the
payer that the payee authorized the advisor or broker to transmit
the Form W-9 to the payer.

FATCA and backup withholding exemptions. FATCA
requires a participating foreign financial institution to report all
U.S. account holders that are specified U.S. persons. Form W-9
has an Exemptions box on the front of the form that includes
entry for the Exempt payee code (if any) and Exemption from
FATCA Reporting Code (if any). The references for the
appropriate codes are in the Exemptions section of Form W-9,
and in the Payees Exempt From Backup Withholding and
Payees and Account Holders Exempt From FATCA Reporting
sections of these instructions.
The Certification section in Part II of Form W-9 includes
certification relating to FATCA reporting.

TIN matching e-services. The IRS website offers TIN
Matching e-services for certain payers to validate name and TIN
combinations. See Taxpayer Identification Number (TIN)
Matching, later.

How Do I Know When To Use
Form W-9?

Use Form W-9 to request the taxpayer identification number
(TIN) of a U.S. person (including a resident alien) and to request
certain certifications and claims for exemption. (See Purpose of
Form on Form W-9.) Withholding agents may require signed
Forms W-9 from U.S. exempt recipients to overcome a
presumption of foreign status. For federal tax purposes, a U.S.
person includes but is not limited to:
* An individual who is a U.S. citizen or U.S. resident alien;
* A partnership, corporation, company, or association created
or organized in the United States or under the laws of the United
States;
* Any estate (other than a foreign estate); or
* A domestic trust (as defined in Regulations section
301.7701-7).
A partnership may require a signed Form W-9 from its U.S.
partners to overcome a presumption of foreign status and to
avoid withholding on the partner's allocable share of the
Sep 25, 2018

D-52

Advise foreign persons to use the appropriate Form W-8 or
Form 8233, Exemption From Withholding on Compensation for
Independent (and Certain Dependent) Personal Services of a
Nonresident Alien Individual. See Pub. 515, Withholding of Tax
on Nonresident Aliens and Foreign Entities, for more information
and a list of the W-8 forms.
Requesters may establish a system for payees and payees'
agents to submit Forms W-9 electronically, including by fax. A
requester is anyone required to file an information return. A
payee is anyone required to provide a taxpayer identification
number (TIN) to the requester.

Electronic system. Generally, the electronic system must:
* Ensure the information received is the information sent, and
document all occasions of user access that result in the
submission;
* Make reasonably certain that the person accessing the
system and submitting the form is the person identified on Form
W-9, the investment advisor, or the introducing broker;
* Provide the same information as the paper Form W-9;
* Be able to supply a hard copy of the electronic Form W-9 if
the Internal Revenue Service requests it; and
* Require as the final entry in the submission an electronic
signature by the payee whose name is on Form W-9 that
authenticates and verifies the submission. The electronic
signature must be under penalties of perjury and the perjury
statement must contain the language of the paper Form W-9.
For Forms W-9 that are not required to be signed, the

TIP electronic system need not provide for an electronic
signature or a perjury statement.

For more details, see the following.

* Announcement 98-27, which is on page 30 of Internal

Revenue Bulletin 1998-15 at IRS.gov/pub/irs-irbs/irb98-15.pdf.
* Announcement 2001-91, which is on page 221 of Internal
Revenue Bulletin 2001-36 at IRS.gov/pub/irs-irbs/irb01-36.pdf.

Cat. No. 20479P

Guide to Global Payroll Management - 2020

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