[12266]
July 17, 2000
TO: BANK AND TRUST ADVISORY COMMITTEE No. 16-00
BROKER/DEALER ADVISORY COMMITTEE No. 14-00
OPERATIONS COMMITTEE No. 15-00
TAX COMMITTEE No. 29-00
TRANSFER AGENT ADVISORY COMMITTEE No. 31-00
RE: IRS RELEASES DRAFT OF REVISED FORM 1042-S FOR YEAR 2001 INFORMATION
REPORTING
The Internal Revenue Service has released a revised draft of Form 1042-S to be used by US
withholding agents, including regulated investment companies (“RICs”), to report payments of certain US
source income (“reportable payments”) made to foreign persons during 2001 and any US tax withheld
from such reportable payments. As summarized below, the draft Form 1042-S includes significant
changes that reflect the new nonresident alien withholding regulations which will become effective as of
January 1, 2001.1
In particular, the attached draft Form 1042-S requires a US withholding agent to (1) separately
identify a “non-qualified” intermediary or flow-through entity through which payments are made to a
recipient (boxes 17 – 20); (2) report withheld amounts that were reimbursed to a recipient (box 8); (3)
report a recipient’s “qualified intermediary” employer identification number (“QI-EIN”), if any (box 14);
and (4) report whether a “non-qualified” intermediary failed to provide certain payment allocation
information, if required (“pro rata basis reporting” box). In addition, the draft Form 1042-S includes
only one income line (unlike the three income lines on the Form 1042-S for 2000). Finally, the draft
Form 1042-S adds new income, exemption and recipient codes.
Deanna J. Flores
Assistant Counsel
Attachments
Attachment no. 1 (in .pdf format)
1 See Institute Memorandum to Bank and Trust Advisory Committee No. 13-00; Broker/Dealer Advisory Committee No. 11-00;
International Committee No. 16-00; Operations Committee No. 12-00, Tax Committee No. 24-00; Transfer Agent Advisory
Committee No. 24-00, dated May 24, 2000.