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Tag Archive for Form 1042

No Form 1042 Extensions, Higher Penalties And No Refunds – IRS Changes Its Ways!

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As readers may recall, in 2013 IRS launched a new foreign payment practices (FPP) division under the LB&I to specifically oversee withholding agents’ compliance activities. The short article is intended to make the withholding agents and other affected taxpayers/ tax professionals aware that FPP has recently begun proposing significantly higher penalties for late filing of Form 1042-S and 1042 by the withholding agents.

Generally, Form 1042 and 1042-S are required to be filed by the withholding agent with regard to the U.S. source income paid to the non-U.S. persons. The forms must be prepared for the calendar year regardless of the withholding agent’s taxable year. These Forms are due on or before March 15th of the following calendar year. They must also be furnished to the payees by the same date.  Read more

Form 1042 – IRS Makes Some Important Changes

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Last month IRS made changes to the instructions of Form 1042 – Annual Withholding Tax Return for US Source Income of Foreign Persons. As the readers may recall, IRS made some changes to Form 1042 earlier to coincide with the newly issued FATCA regulations under Chapter 3 and 4. The updated instructions were released to assist the withholding agents in preparing the Form. It is pertinent to note that although 2014 and 2015 versions of the Form are identical, IRS has made certain parts of the Form which were optional in 2014, as mandatory for 2015.

Following parts of Form 1042-S are accordingly mandatory for 2015:

• Withholding agent’s Chapter 3 and 4 status code must be entered on page 1 under the withholding agent’s name. Read more

IRS Released Forms 8966 And 1042 Updated For FATCA Reporting Requirements

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On March 5, 2014 the Internal Revenue Service released new versions of three critical forms to help financial institutions and withholding agents meet the requirements of the Foreign Account Tax Compliance Act, including draft versions of Form 8966 and Form 1042-S, and a final version of Form 1042.

Form 8966, FATCA Report, is a new form that foreign financial institutions (FFIs) would use to report information on their U.S. account holders under the 2010 law. The statute requires FFIs to report accounts held by U.S. taxpayers to the IRS or face, in some cases, a 30% withholding tax on certain U.S. source payments that are made to them.

Form 1042-S now incorporates FATCA and includes ways to account for withholding under Read more

Act Now! Revised FATCA Final Regs And 2014 Forms Now Available!

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The following FATCA Forms and Instructions for 2014 are now available on the IRS.GOV Forms and Publications Website:

• Form 1042

• Form 8966

• Form W-8BEN

• Instructions to Form W-8BEN

• Form W-8ECI Read more

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