Filing Form 1042-S Without Payee Taxpayer Identification Numbers
TREASURY REGULATION 301.6109-1(c)
(c) Requirement to furnish another's number. Every person required under this title to make a return, statement, or other document must furnish such taxpayer identifying numbers of other U.S. persons and foreign persons that are described in paragraph (b) (2) (i), (ii), or (iii) of this section as required by the forms and the accompanying instructions. If the person making the return, statement, or other document does not know the taxpayer identifying number of the other person, such person must request the other person's number. A request should state that the identifying number is required to be furnished under authority of law. When the person making the return, statement, or other document does not know the number of the other person, and has complied with the request provision of this paragraph, such person must sign an affidavit on the transmittal document forwarding such returns, statements, or other documents to the Internal Revenue Service, so stating. A person required to file a taxpayer identifying number shall correct any errors in such filing when such person's attention has been drawn to them.
Internal Revenue laws and regulations require the reporting of a payee's TIN (Taxpayer Identification Number—Social Security Number, Employer Identification Number or Individual Taxpayer Identification Number) on federal information returns and payee statements such as Forms W-2, 1099, 1042-S, etc. In addition, federal regulations require (with a few exceptions - treaty claims for interest and dividends on public traded securities) that all tax treaty claims made on Forms 8233 and W-8BEN be accompanied by the payee's TIN.
Section 6109 establishes the general requirements under which a person is required to furnish a taxpayer identification number (TIN) to the person obligated to file an information return. Reg. section 301.6109-1(b) provides that every U.S. person who makes under this title a return, statement, or other document must furnish its own taxpayer identifying number as required by the forms and the accompanying instructions. In addition, a U.S. person whose number must be included on a document filed by another person must give the taxpayer identifying number so required to the other person on request.
Reg. section 301.6109-1 provides that, in the case of application for both a social security number and an IRS ITIN number, "the individual must make such application far enough in advance of the first required use of the [taxpayer identification number] to permit issuance of the number in time for compliance with such requirement."
Any withholding agent (with certain exceptions) who receives a Form 8233 or W-8BEN without a payee TIN for the purpose of claiming a tax treaty benefit is not allowed to grant such tax treaty benefit until he receives a proper Form 8233 or W-8 BEN that does report the payee's TIN. However, a Form 8233 or W-8BEN without a payee TIN is still valid for the purpose of declaring that the payee is a foreign person, subject to the withholding and reporting rules that apply to payments made to foreign persons.
The above regulation allows a withholding agent who has solicited the Taxpayer Identification Number (TIN) of an alien, and such alien has neglected or refused to provide such TIN, to avoid the penalty for failing to provide a payee TIN on an information return or on a payee statement (e.g. Form 1042-S) by attaching an affidavit to the Form 1042-S when filed on paper that lists the names of all aliens from whom the withholding agent solicited TINs and was not able to secure such TINs. The IRS recognizes that not all recipients of a Form 1042-S will have a U.S. TIN. Box 14 of the form solicits the TIN “if any.”
A TIN must be on a Withholding Certificate if the beneficial owner is claiming any of the following: tax treaty benefits (other than for income from marketable securities), exemption for effectively connected income, exemption for certain annuities, or an exemption based on exempt organization or private foundation. In addition, a TIN must be on a Withholding Certificate from a person claiming to be any of the following: a qualified intermediary, withholding foreign partnership, a grantor trust with 5 or fewer grantors, exempt organization, or a U.S. branch of a foreign person treated as a U.S. Person.
A withholding agent should prepare the affidavit mentioned above, keep the affidavit in its files, and submit it to the IRS only in response to a proposed penalty on the withholding agent for failure to report payee TIN on any Forms 1042-S. As an additional precaution, he may attach a copy of the affidavit to his Form 1042. For additional information, refer to Presumption Rules.
Note: This page contains one or more references to Internal Revenue Code (IRC) sections. A link to the Internal Revenue Code is included for the convenience of those who would like to read the technical reference material. To access the applicable Internal Revenue Code sections visit the Tax Code, Regulations, and Official Guidance page.