Recent information reporting developments.

• Author: Fox, George

Postponement until Jan. 1, 2001 of the implementation date for the final withholding-at-source regulations has raised questions as to the use and validity of the underlying documentation required to be collected when payments are made to foreign persons. Are the traditional forms still valid and, if so, for how long? Can withholding agents choose to collect certifications on the new forms that are now available?

The regulations extending the withholding-at-source effective date clarify the following three basic elements:

* The traditional forms will continue to remain effective until the earlier of their normal expiration date or Dec. 31, 2000. Notice 99-25, which extended the implementation date of the regulations, did not change this cutoff date.

* The final regulations require mandatory use of the new withholding certificates and statement after 2000.

* A withholding agent may choose to use the new forms immediately. These new withholding certificates satisfy the documentation requirements under the regulations in effect before 2001. Further, they remain valid for the period specified in the final withholding-at-source provisions, regardless of when the certificate is obtained.

Traditional Forms W-8 and 1001. Form W-8, Certificate of Foreign Status, is effective for the year in which received and the next two calendar years. A traditional Form W-8 received anytime in 1999 normally would have been effective from the time of receipt through Dec. 31, 2001. Because of the recent changes, however, a Form W-8 received in 1999 is valid only through 2000. Form 1001, Ownership, Exemption, or Reduced Rate Certificate, is effective for three calendar years. As with Form W-8, however, a Form 1001 received in 1999, which otherwise would have been valid through 2001, is now effective only through 2000.

Form W-8BEN. Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, incorporates both Forms W-8 and 1001 into one form. The instructions state that, when furnished without a taxpayer identification number (TIN), the form will remain in effect for a period starting on the date the. form is signed and ending on the last day of the third succeeding calendar year. Thus, a Form W-8BEN signed on Sept. 30, 1999 remains valid until Dec. 31, 2002. For most payments (except deposit interest), a Form W8BEN furnished with a taxpayer TIN remains in effect indefinitely, as long as the status of the person whose name is on...