IRS evaluates Withholding Agent’s Electronic Books and Records on Reliability of Forms W-8

On 21 October 2019, the U.S. Internal Revenue Service (“IRS”) Large Business and International (“LB&I”) division released a practice unit on the “Evaluation of Withholding Agent’s Electronic Books and Records on Reliability of Forms W-8” (Link). The practice unit is divided into the following eight process steps:

  • Step 1 – Evaluate Withholding Agent’s (“WA’s”) Reporting Using IRS Systems
  • Step 2 – Determine Reliability of Systems Used by WA
  • Step 3 – Use IDRs to Assess Reliability of WA’s Systems
  • Step 4 – Analyze WA’s Procedures for Opening Accounts
  • Step 5 – Assess Reliability of Introducing Brokers’ Documents
  • Step 6 – Assess Reliability of Third Party Repository Documents
  • Step 7 – Assess Reliability of Agency Agreements on Shared Documentation Systems
  • Step 8 – Assess Reliability of WA’s Books and Records

As part of LB&I’s knowledge management efforts, Practice Units are developed through internal collaboration and serve as both job aids and training materials on tax issues.

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