Pub. 7 2018 Issue 3

19 f a l l | 2018 ACTIONSTEPS • Incorporate the expiring ITIN information into your BSA/AML compliance program to ensure you are aware that some ITINs previously obtained may have expired or may be expiring in the near future. • There are many, many more rules and specificity around each of the concepts briefly examined here. Be sure to dig deeper into any of the concepts and regula- tions referred to in this article, tying some important aspects together. • Visit the IRS’ ITIN information page at https://www. irs.gov/individuals/ individual-taxpayer-identifica - tion-number for more important details. Patti Joyner Blenden is president and founder of Financial Solutions, Inc. and provides community financial institutions solutions for the ever-increasing need for cost-effective regulatory risk management. Patti provides in-house training, litigation support and compliance policy and procedure development. Additionally, Ms. Blenden is also the lead instructor for VACB’s Compliance Forum program. In this ca- pacity, she assists VACB’s member banks with their bank’s compliance program through quarterly meetings, webinars and direct interaction with Forum members. members include the tax filer, spouse and any dependents claimed on their tax return. IRS W-9 and W-8 Forms IRS Form W-9 is used to certify to financial institutions and other IRS information reporters that the accountholder’s TIN is correct, if the customer is an exempt payee or exempt from federal backup withholding, and if the customer is a US citizen or US resident. Note that the FATCA exemption code on the most recent version of Form W-9 applies to “persons submitting Form W-9 for accounts maintained outside of the United States.” Therefore, since accounts held at US-based financial institutions are maintained within the United States, customers can leave the FATCA exemption code box blank. If your individual or entity customer is not a US citizen or US resident, the customer should instead complete Form W-8 BEN or W-8 BENE. There are two types of W-8 forms for individuals and entities. • Form W-8BEN - This version of the certification form is for individuals claiming a reduced rate of tax withholding under a tax treaty with the US Rates generally ranging from 0% to 25%. This form requests personal identification details, notation of the country of residence to claim treaty benefits, and an accuracy attestation with a signature. Entities (non-individuals) should not use Form W-8BEN. • Form W-8BEN-E - This version is for entities (non- individuals) claiming a reduced rate of tax withhold- ing under a tax treaty with the US Rates generally ranging from 0% to 25%. Compliant TIN Processes It remains important for financial institutions to obtain unexpired individual taxpayer identification numbers as part of the institution’s CIP process. I highly recommend that you incorporate the IRS ITIN instructions and its latest Fact Sheet into your CIP and account opening procedures. The expira- tion of unused and older ITINs could increase the level of TIN mismatch alerts your institution receives related to long-term customers that have failed to renew ITINs. As a risk manager, it is our job to link together different requirements from different areas into a functionally effective program. This is a perfect example of when we must carefully integrate different regula- tions from different sources (BSA vs. IRS rules) into the same line function, such as in account opening or 1099-INT prepara- tion at year-end. ADVERTISER’S INDEX Accountants | CPA Firms Elliott Davis Decosimo 10 Yount, Hyde & Barbour 3 Auction The Counts 13 Financial Services Coastal 15 IT CoNetrix 2 Risk Management Travelers 5