The Internal Revenue Service has released the final Form W-9 after releasing a draft version this past May. The final Form W-9 and instructions contain no substantive changes and are largely the same as the previously released draft. This may come as a disappointment to many in the industry that sought clarifications and changes to the updated form.

More significantly, the finalization of Form W-9 triggers the six-month grace period (absent additional guidance) found in the FATCA regulations to begin using the new form. This is particularly important for withholding agents currently using substitute Form W-9s (including embedded Form W-9s on paper or electronic forms). Updates may be necessary because the IRS generally requires substitute forms to be substantially similar to the official form, particularly when it comes to the required certifications. The final Form W-9 has added a new certification with respect to FATCA; thus, creating the potential need to update substitute forms within the six month grace period. It is unclear whether the certification is needed if a FATCA exemption does not apply (or never will for the particular withholding agent), so additional guidance from the IRS will be needed to clarify.

The Form W-9 (Rev. August 2013) adds two new fields; one to indicate the type of entity that is exempt from back-up withholding and the other to indicate the type of entity that is exempt from FATCA withholding. The instructions include an updated list of exempt payees for back-up withholding with a corresponding code to be entered into the new field, if applicable. The list removes the international organization and foreign central bank of issue payee types Read More