Consulting

CTI offers consulting services to help clients comply with tax withholding and information reporting rules for all types of fixed and determinable payments, financial products and investment vehicles. CTI works closely with Burt, Staples & Maner, LLP (BSM), a law firm with offices in Washington, D.C. and London, specializing in international tax issues.
Typical engagements have included:

Impact Analysis and Health Check

• Conducting an impact analysis to assess the client's level of compliance with respect to its U.S. tax withholding and information return reporting requirements, specifically focusing on providing recommendations as to whether the current systemic and operational procedures utilized by the client are in compliance with the 1441 regulations.
• Performing a top-to-bottom health check of the client's systems for tax withholding and information reporting, identifying any areas of noncompliance or heightened risk.
• Download the Impact Analysis & Health Check Brochure.

Audits and Remediation

• Reviewing tax documentation to determine validity and implementing a process to cure defective forms.
• At the direction of the client's tax counsel, organizing and preparing materials for use in an IRS audit or potential litigation.
• Download the Audit Defense & Remediation Brochure.

Cost Basis Readiness Evaluation ("CBRE")

• Conducting a comprehensive current state analysis using proven methodologies to gauge system and operational readiness for the new cost basis reporting rules.
• Creating a gap analysis to help identify and solve shortfalls with a complete third party solution analysis.
• Download the CBRE Brochure.

QI Services

• Conducting health checks and training to ensure compliance and remediate issues.
• Perform QI audits (CTI and BSM are approved QI auditors).
• Assisting with QI applications, FATCA preparation, and litigation.
• Download the QI Services Brochure.

Multinational Corporation Consulting

• Conducting health checks and training to ensure compliance and remediate issues.
• Providing audit assistance in response to Information Disclosure Requests (“IDR”) from the IRS and assist in minimizing or eliminating any exposure.
• Validating Forms W-8, Forms W-9 and Forms 8233, communicating with vendors, calculating withholding rates, providing TIN matching services, preparing procedure and operations manuals, producing year-end reporting, and preparing tax returns through our outsourcing group.
• Assisting and preparing ITIN applications as a Certifying Acceptance Agent.
• Download the Multinational Corporation Brochure.

Certifying Acceptance Agent

CTI, as a Certifying Acceptance Agent, is authorized to:

• Assist foreign individuals, who are ineligible or unable to receive a Social Security Number, in obtaining an Individual Taxpayer Identification Number (ITIN) or an Employer Identification Number (EIN).

As a Certifying Acceptance Agent, CTI can:

• Meet with and assist the applicant in completing the IRS Form W-7, Application for IRS Individual Taxpayer Identification Number.
• Review the required documentation to verify a foreign individual's status and identify and submit the application on behalf of the foreign individual.
• Certify to the IRS that the foreign individual's application is complete, accurate and that the documentation provided to us for review is authentic, eliminating the need for the original identifying documents being submitted to the IRS with the application.
• Receive the individual's ITIN directly from the IRS and communicate with the IRS on behalf of the foreign individual on matters relating to the issuance of an ITIN. We offer this service to our clients and foreign nationals to assist in the compliance with IRS withholding regulations and assist individuals and other entities who are eligible to obtain the benefit of a reduced withholding under an income tax treaty and in completing Forms W-8 and 8233.

Client Letters

• Synopsis and Comments on the Proposed FATCA Regulations   
  (February 13, 2012)
  The U.S. Treasury and IRS published the proposed Chapter 4 FATCA regulations (“Regulations”) and the preamble (“Preamble”) to them on February 8, 2012 -- a daunting 388 pages of detailed rules ...   
  Learn More.
• "FATCA Partnerships" – Are They the Cure for FATCA?   
  (February 10, 2012)
  The United States announced on February 8, 2012, that it is pursuing “FATCA Partnerships” with France, Germany, Italy, Spain and the United Kingdom. The purpose of the agreements is to help “foreign financial institutions” (“FFIs”) in these jurisdictions (“Partner FFIs”) to avoid local “legal impediments to compliance ...   
  Learn More.
• Dividend Equivalent Payments Subject to U.S. Withholding   
  (January 24, 2012)
  The U.S. Treasury and IRS have taken the next step in their crackdown on transactions that avoid the U.S. withholding tax on U.S. source dividends. Recently issued temporary and proposed regulations define when a payment that references a U.S. source dividend ...   
  Learn More.
• Faxed and Scanned Forms W-8 – Does New IRS Guidance Offer Hope?   
  (September 21, 2011)
  It is no secret to withholding agents that the IRS typically treats a customer or counterparty providing a faxed or scanned Form W-8 as “undocumented” ...   
  Learn More.
• FATCA Transition Relief: Notice 2011-53   
  (July 15, 2011)
  The IRS has responded to industry and foreign government concerns regarding the January 1, 2013, effective date of the chapter 4 provisions of FATCA...   
  Learn More.
• Average Basis Creates “Revocation” and “Change” Issues  
  (June 28, 2011)
  The IRS is considering a change to the cost basis regulations that may require brokers to alter the way they handle customer requests to stop calculating basis by averaging.  The average basis rules do not...   
  Learn More.
• IRS Ruling On Consent Fees: Withholding and Information Reporting Consequences 
  (May 9, 2011)
  Until recently, there has been no guidance addressing the treatment of a consent fee paid to a debt holder to obtain the holder’s agreement to change the terms...   
  Learn More.
• Immediate Action Required for Participating FFIs with Respect to Responsible Officer Certifications
  (May 6, 2011)
  Although FATCA is not effective until January 1, 2013, foreign financial institutions (FFIs) that intend to enter into FFI Agreements with the IRS (“participating FFIs”)...   
  Learn More.
• IRS Releases Notice 2011-34 – Second FATCA Notice    
  (April 11, 2011)
  On April 8, 2011, Treasury and the IRS issued a second FATCA notice, Notice 2011-34 (the "Notice") supplementing Notice 2010-60 and providing new guidance in several...   
  Learn More.
• Electronic Form W-8 Validation Takes Off         
  (March 14, 2011)
  Electronic validation has grown exponentially in the past two years and is becoming the popular tool for US withholding agents and qualified intermediaries (“WAs”) to obtain Forms W-8 and W-9 quickly and efficiently from clients and vendors without spending...   
  Learn More.
• Final FBAR Regulations        
  (March 2, 2011)
  The U.S. Treasury has finalized regulations under the Bank Secrecy Act concerning the disclosure of foreign financial accounts by U.S. persons, commonly known as the foreign bank account reporting or “FBAR” regulations. These regulations require...   
  Learn More.
• New Form W-9       
  (February 9, 2011)
  The IRS released a new Form W-9 at the end of January. Financial institutions, accounts payable operations, and other payers of amounts that may be reported on Forms 1099 should start...   
  Learn More.
• IRS Requires Withholding and Reporting on Expense Reimbursements to Banks' Customers      
  (January 21, 2011)
  The IRS Office of Chief Counsel published a General Legal Advice Memorandum (“GLAM”) on December 17, 2010, concluding that expense reimbursements paid by U.S. depositary...   
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• The Reporting of U.S. Bank Deposit Interest: The Saga Continues     
  (January 12, 2011)
  The U.S. Treasury and the IRS published a proposed regulation on January 7, 2011, that would vastly expand the reporting of U.S. bank deposit interest (“BDI”) paid to non-U.S. individuals on Form 1042-S...   Learn More.
• 2010 Changes to RIC Distribution Rules     
  (January 6, 2011)
  Year-end legislative changes to the Regulated Investment Company (“RIC”) distribution rules provide significant benefits for both payors and RIC investors...   
  Learn More.
• Ian Unger    
  (December 30, 2010)
  BURT, STAPLES & MANER, LLP, is pleased to announce that Ian Unger will join the Firm as an associate effective January 3, 2011. Mr. Unger received...   
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• Final Cost Basis Regulations    
  (October 20, 2010)
  The final cost basis regulations have finally been published, a mere 11 weeks before the statutory effective date of January 1, 2011. Fortunately, the final rules follow the general outline of the proposed regulations published in December 2009, and...   
  Learn More.
• Increase in Information Return Penalties Starting Next Year   
  (September 29, 2010)
  Mistakes on information returns and payee statements just became a lot more expensive. Effective with returns required to be filed on or after January 1, 2011, the per-occurrence penalties for incorrect...   
  Learn More.
• IRS Comments on FATCA Notice 2010-60   
  (September 23, 2010)
  Several senior IRS executives addressed the Tax Executives Institute in New York City on September 22, 2010, as part of a panel chaired by John Staples, and commented on FATCA Notice 2010-60 (the “Notice”)...   
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• First Round of FATCA Guidance Published by IRS    
  (August 30, 2010)
  On Friday, August 27, the IRS published Notice 2010-60 (“Notice”), the first round of guidance under the Foreign Account Tax Compliance Act (“FATCA”) provisions...   
  Learn More.
• Notice 2010-46: New Securities Lending/Repo Rules: Notice 2010-46 Replaces Notice 97-66   
  (May 24, 2010)
  What is the purpose of Notice 2010-46? The Notice implements section 871(l)(6) of the Foreign Account Tax Compliance (“FATCA”) provisions of the HIRE...  
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• U.S. Withholding and Information Reporting on Dividend Equivalents Begins September 14, 2010  
  (April 16, 2010)
  ALERT: Clients should be aware that new section 871(l) enacted as part of FATCA requires withholding on dividend equivalents beginning on or after September 14, 2010. Prompt action is required. This alert describes dividend equivalents and...  
  Learn More.
• IRS Audits of U.S. Withholding Agents Intensifying     
  (April 6, 2010)
  We have seen a sharp increase in the number of IRS audits of U.S. withholding agents in the last few weeks. (cf. BSM client letter dated January 4, 2010.) Several weeks ago, we...  
  Learn More.
• Vendor Payment Reporting Significantly Expanded    
  (March 26, 2010)
  The Patient Protection and Affordable Care Act amends § 6041 (Form 1099-MISC reporting) in two ways: (1) it requires reporting of payments made to corporations, other than tax-exempt corporations, by treating them as non-exempt recipients; and...  
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• Container Corporation: New Rules or Old Concepts for Sourcing   
  (March 19, 2010)
  In Container Corporation v. Commissioner, 134 T.C. No. 5 (February 17, 2010), the Tax Court held that guarantee fees should be sourced by analogy to services...  
  Learn More.
• FATCA is Now Law  
  (March 18, 2010)
  Today, the President signed into law a major revamp of the U.S. withholding tax system that imposes a new 30% withholding tax on certain U.S. source payments made to foreign financial institutions (“FFIs”) and non-financial foreign entities (“NFFEs”) that refuse to identify certain U.S. persons invested with them offshore, even if... 
  Learn More.
• Do You Have a 2010 Strategy to Deal with Cost Basis Reporting and FATCA?  
  (February 8, 2010)
  Proposed regulations mandating cost basis reporting (“CBR”) and potential passage of the Foreign Account Tax Compliance Act (“FATCA”) constitute the biggest operational and systemic challenges that U.S. and non-U.S. financial institutions have had to face since... 
  Learn More.
• Likely Consequences to Financial Institutions from the IRS Voluntary Disclosure Program for U.S. Holders of Undisclosed Offshore Accounts  
  (January 28, 2010)
  Over 14,000 U.S. taxpayers trying to escape criminal prosecution have voluntarily disclosed their offshore accounts to the IRS in the last few months. More such... 
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• Appointment of Michael Danilack as IRS Deputy Commissioner (International) LMSB
  (January 20, 2010)
  I am pleased to announce that our partner, Mike Danilack, has been appointed Deputy Commissioner (International) for the Large and Midsize Business Unit (“LMSB”)...
  Learn More.
• New Years Update on IRS Withholding Tax Audits
  (January 4, 2010)
  The IRS has warned taxpayers for several years that it intends to conduct comprehensive checks of the compliance level of U.S. withholding agents...
  Learn More.
• U.S. Withholding Tax Legislation Introduced on October 27, 2009
  (October 30, 2009)
  Key Congressional tax writers introduced the “Foreign Account Tax Compliance Act of 2009” (“Act”) on October 27, 2009, with the U.S. Treasury expressing its support...
  Learn More.
• Meeting with IRS on July 30, 2009, to Discuss Changes to the QI System 
  (July 31, 2009)
  The IRS met with a limited number of representatives of the legal and accounting professions on July 30, 2009, to discuss pending legislative and regulatory changes affecting U.S. withholding taxes, particularly the Qualified Intermediary (“QI”) program. 
  Learn More.
• IRS Signals Preference for Interview-Style E-W8 Applications for Purposes of Securing MOU
  (June 18, 2009)
  The IRS recently announced its preference for a “Turbo Tax” interview-style electronic Form W-8 (“E-W8”) from Withholding Agents (“WA”) looking to secure a Memorandum of Understanding (“MOU”) for their E-W8 applications.
  Learn More.
• GlaxoSmithKline Case Shows Importance of Withholding Tax Issues
  (June 1, 2009)
  The IRS has made cross-border withholding taxes a Tier I issue and has said it will focus on these issues as never before. A recently published Tax Court petition filed by the U.S. group of GlaxoSmithKline shows how an IRS determination on the merits of a transaction...
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• Drastic Changes to Qualified Intermediary (“QI”) Program Proposed by Obama
  (May 7, 2009)
  The Obama Administration has proposed to Congress sweeping changes in the QI program and the way nonqualified intermediaries (“NQIs”) are treated.  If these proposals are adopted,...
  Learn More.
• IRS Suggests Use of Internal Audit Departments to Control Costs of QI External Audits
  (May 1, 2009)
  The IRS recently proposed that a U.S. office of an accounting firm must participate in the external audit of a Qualified Intermediary (“QI”). The proposal set off an uproar in both the QI community...
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• IRS Ramps Up Withholding Tax Enforcement
  (April 3, 2009)
  We reported last December that the IRS elevated withholding tax and reporting issues to a “Tier 1” audit issue.  This means these issues generally are on par with tax shelters...
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• UBS Settlement with the IRS:  New Perils for Withholding Agents
  (February 20, 2009)
  UBS agreed to pay $780 million to the United States on February 18 to avoid criminal prosecution associated with its U.S. withholding tax compliance. While BSM’s representation of UBS in this case limits what we can say about the settlement...
  Learn More.
• New Withholding Tax Audit Developments
  (December 16, 2008)
  On a number of fronts it appears the IRS intends to raise again the stakes on withholding tax compliance. We would like to bring two specific matters to your attention...
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• U.S. Senate Focuses on Dividend Withholding Tax Abuse: Are Changes on the Way?
  (September 23, 2008)
  The U.S. Senate Permanent Subcommittee on Investigations (the "Subcommittee") held a hearing on September 11, 2008, entitled "Dividend Tax Abuse: How Offshore Entities Dodge Taxes on U.S. Stock Dividends."...
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• New Withholding Tax Audit Guidelines
  (August 15, 2008)
  The IRS published guidelines on August 7, 2008, for their examiners to follow when conducting withholding tax audits of U.S. withholding agents other than Qualified Intermediaries ("Guidelines")...
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• GAO report on Qualified Intermediary ("QI") Program and U.S. Withholding Agent ("USWA") Compliance
  (March 18, 2008)
  Eight years ago, the IRS allowed foreign institutions to hold securities on behalf of their clients and obtain a reduced withholding rate without disclosing their clients, provided the institution agreed to become a QI...
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• U.S. Income Tax Treaties with Belgium, Denmark, Finland & Germany
  (February 1, 2008)
  On January 2, 2008, the Treasury Department announced the entry into force of Protocols amending existing income tax treaties with Germany, Denmark and Finland and a new income tax treaty and protocol with Belgium...
  Learn More.
• Due Diligence Needed for All M&A
  (January 11, 2008)
  Recent experience shows that financial institutions (FIs) and multi-national corporations (MNCs) who acquire companies do not adequately review the tax withholding and information reporting activities of the acquiree as part of their due diligence...
  Learn More.
• Proposed NRA W/H Regs. on Redemptions of Actively Traded Stock
  (October 24, 2007)
  Recently, the Treasury and the IRS issued Proposed NRA Withholding Regulations on Redemptions of Actively Traded Stock.
  Learn More.
• The Electronic Form W-8: A Potential Cure for Your Compliance Headaches?
  (July 30, 2007)
  The Electronic Form W-8: A Potential Cure For Your Compliance Headaches?  CTI addresses some key issues to consider before implementing an E-W8 tool.
  Learn More.
• IRS Releases Draft W-8BEN and Instructions
  (July 9, 2007)
  The IRS has released a draft version of the 2008 Form W-8BEN, with instructions.
  Learn More.

Safe Harbor Data Privacy Statement

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  Compliance Technologies International, LLP (“CTI”) is committed to protecting the privacy and security of its clients, partners, and associates and therefore operates under a set of strict privacy principles.
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