The regulations pertain to section 871(m) regarding dividend equivalent payments that are treated as U.S. source income. These regulations provide guidance regarding when payments made pursuant to certain financial instruments will be treated as U.S. -source income and subject to U.S. withholding tax. The information provided is necessary to permit withholding agents to determine whether U.S. withholding tax is due with respect to a payment of a dividend equivalent and the amount of the tax. The information will also be used for audit and examination purposes.
Form 1042 is used by withholding agents to report tax withheld at source on certain income paid to nonresident alien individuals, foreign partnerships, and foreign corporations to the IRS. Form 1042-S is used by withholding agents to report income and tax withheld to payees. A copy of each 1042-S is filed magnetically or with Form 1042 for information reporting purposes. The IRS uses this information to verify that the correct amount of tax has been withheld and paid to the United States. Form 1042-T is used by withholding agents to transmit Forms 1042-S to the IRS.
Public harm is reasonably likely to result if normal clearance procedures are followed because taxpayers have requested substantial time to develop computer systems in order to comply with the regulations. Clearance under the normal review may not provide taxpayer with enough time to comply with these rules. In addition, these regulations extend the applicability of an existing regulation until January 1, 2017; taxpayer may be harmed by any delay in learning about the extended effective date.
US Code:
26 USC 6103
Name of Law: Confidentiality and disclosure of returns and return information
US Code:
26 USC 1461
Name of Law: Liability for withheld tax
US Code:
26 USC 871
Name of Law: Tax on nonresident alien individuals
US Code:
26 USC 1441
Name of Law: Withholding of tax on nonresident aliens
US Code:
26 USC 1442
Name of Law: Withholding of tax on foreign corporations
US Code:
26 USC 6001
Name of Law: Notice or regulations requiring records, statement, and special returns
By adding the REG-120282-10 to this information collection request, it has increased the annual time burden by 240,000 hours. The agency estimates that 30,000 respondents will prepare the statements as required by section 1.871-15(p) . It estimated that it will take 8 minutes to complete the statement.
$180,153
No
No
No
No
No
Uncollected
D. Merkel 202 622-3870 david.p.merkel@irscounsel.treas.gov
No
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons