I need to research this IRS info some more: 21.7.13.3.2.7.1 (10-01-2009) Foreign Entities/Persons Not Required to File a U.S. Tax Return 1. Foreign entities/persons that do not have income effectively connected with the conduct of a trade or business, and do not have an office or place of business or fiscal agent or paying agent in the United States, are not required to obtain an EIN. However, a foreign entity may need an EIN to comply with IRS withholding regulations, avoid withholding on portfolio assets, or to claim tax treaty benefits. In this case, the taxpayer should complete Form SS-4 as shown below: 1. When completing Line 7b of Form SS-4, the taxpayer should write N/A in the block asking for an ITIN or SSN unless the taxpayer has an SSN or ITIN. 2. On Line 10, the taxpayer should check the other box and specify on the line one of the following conditions: For W-8BEN Purposes Only, For Tax Treaty Purposes Only, Treas. Reg. 1.1441-1 (e) (4) (vii), or Form 5471. 3. The taxpayer should enter N/A on Lines 11 through 17 of Form SS-4. 2. Establish these entities on the O file. 3. If the foreign entities/individuals above receive a letter from the IRS soliciting the filing of a U.S. tax return, the foreign entity/individual should respond to the letter immediately by stating that it has no requirement to file any U.S. tax returns. Failure to respond to the IRS letter may result in a procedural assessment of tax by IRS against the foreign entity. Note: If the foreign entity later becomes liable to file a U.S. tax return, the foreign entity should not apply for a new EIN, but instead use the EIN it was first issued on all U.S. tax returns filed thereafter. 4. If the application is received over the phone, ask for the callers name, SSN/ITIN, date of birth, and position with the entity. If the caller does not have an SSN/ITIN (and therefore cannot be authenticated using CC INOLE), the new EIN will still be disclosed to the caller, as long as their position with the entity authorizes them to receive it. See IRM 11.3.2.4, Persons Who May Have Access to Returns and Return Information Pursuant to IRC 6103(e). 21.7.13.3.2.7.2 (02-12-2010) Foreign Entities/Persons Required to File a U.S. Tax Return 1. Foreign individuals, foreign corporations, partnerships etc., that are required under Treas. Reg. § 1.1443 - 1.1445 and Rev. Proc. 2000-35, to file a U.S. tax return, are not required to provide an ITIN for the responsible party (on Form SS-4, Line 7b) in order to obtain an EIN, due to procedural changes/requirements for issuance of an ITIN. See IRM 3.21.263.4.1, ITINs - Who Should Apply, for additional information. 2. Treas. Reg. § 301.6109-1(a)(1)(ii)(C) provides that any person other than an individual (such as corporations, partnerships, nonprofit associations, trusts, estates, and similar non-individual persons) that is required to furnish a taxpayer identifying number must use an employer identification number . Treas. Reg. § 301.6109-1(a)(1)(ii)(D) provides that an individual, whether U.S. or foreign, who is an employer or who is engaged in a trade or business as a sole proprietor should use an employer identification number as required by returns, statements, or other documents and their related instructions. Note: IRC § 7701(a)(1) defines the term person to include an individual, a corporation, a partnership, a trust or estate, a joint-stock company, an association, or a syndicate, group, pool, joint venture, or other unincorporated organization or group. The term also includes a guardian, committee, trustee, executor, administrator, trustee in bankruptcy, receiver, assignee for the benefit of creditors, conservator, or any person acting in a fiduciary capacity. 3. Since an ITIN is not required (paragraph 1), but an EIN is required (paragraph 2), an EIN will be assigned to the entity whether the sole proprietor, partner, principal officer, grantor, responsible party, etc. has a valid ITIN or not. Assign the appropriate filing requirements to the entity. Note: A foreign individual, who has previously been assigned an ITIN, is required to furnish the ITIN at the time of application for the employer identification number. However, for practical purposes, if an ITIN is not listed, the EIN will still be assigned. 4. If the application is received over the phone, ask for the callers name, SSN/ITIN, date of birth, and position with the entity. If the caller does not have an SSN/ITIN (and therefore cannot be authenticated using CC INOLE), the new EIN will still be disclosed to the caller, as long as their position with the entity authorizes them to receive it. See IRM 11.3.2.4, Persons Who May Have Access to Returns and Return Information Pursuant to IRC 6103(e).
Posted on: Sat, 20 Sep 2014 16:43:47 +0000
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