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:

• 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.
• 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.

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

• 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... 
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• 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”) ...
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• 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...
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• 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...
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• 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. 
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• 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.
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• 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,...
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• 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...
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• 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...
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• 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...
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• 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.
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• 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.
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• 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.
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