Income Tax Treaty Interpretation and Practice for Tax Professionals: Claiming and Reporting Tax Treaty Positions for Individuals

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, October 27, 2015

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide tax advisers, professionals and preparers with a solid overview and explanation of key income tax treaty provisions needed to determine whether their individual clients may take treaty-based return positions. The speakers will enable advisers and preparers to complete IRS Form 8833 Treaty-Based Return Position Disclosure, IRS Form 8802 Application for U.S. Residency Certification and Form W-8BEN Certificate of Foreign Status and Beneficial Owner.

Description

The United States has in force income tax treaties with over 60 countries. The treaties are intended to eliminate or reduce double income taxation. Benefits are available to nonresident aliens (and, to a limited extent, to U.S. citizens living abroad) with respect to U.S. Federal income taxes and to U.S. citizens and residents with respect to foreign country income taxes. Tax advisers working with nonresident aliens with U.S. investments or business activities and U.S. individuals with foreign source income need to know the procedures for claiming and reporting treaty-based return positions.

While each income tax treaty has its own specific terms and requirements, common themes and terminology are found in all U.S. income tax treaties. Under most income tax treaties, U.S. taxpayers may claim exemption from source country taxation for personal services income. Other provisions include reduction or exemption of withholding taxes on interest and dividends.

A foreign person claiming a tax benefit under a U.S. income tax treaty may need to report the position on IRS Form 8833. Failure to file Form 8833 with the IRS may result in a $1,000 penalty for each year an individual fails to disclose his or her treaty position. The disclosure must include specific information about the treaty, including the article of the treaty that applies and the Internal Revenue Code section changed by the claimed treaty position.

The panel will provide comprehensive guidance on how to read and interpret key income tax treaty provisions, report treaty-based positions on Form 8833, obtain U.S. resident certification (Form 8802) to claim reduction or exemption from foreign income taxation under a treaty and complete Forms W-8BEN and W-8BEN-E to establish exemption from U.S. withholding taxes.

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Outline

  1. Basic structure of income tax treaties
  2. Common features of tax treaties
  3. Persons who can benefit from an income tax treaty
  4. Application of the “savings clause” to U.S. citizens
  5. Personal services income
  6. Interest and dividends
  7. Compliance and forms

Benefits

The panel will discuss these and other critical issues:

  • Purposes of income tax treaties
  • Persons who can claim benefits
  • Common residency provisions, and tie breakers for dual residents
  • Savings clauses applicable to U.S. citizens
  • Exemptions for personal services income
  • Treatment of interest and dividends
  • How to complete Forms 8833, 8802 and W-8BEN with examples

Faculty

Dougherty, Alison
Alison N. Dougherty, J.D., LL.M.
Senior Tax Manager
Aronson

Ms. Dougherty specializes in corporate tax, partnership tax, international tax and real estate tax. She has expertise...  |  Read More

Norman, William
William K. Norman, J.D., LL.M. (Taxation)

Partner
Ord & Norman

Mr. Norman practices as a tax lawyer. He limits his practice to international tax planning and compliance for high net...  |  Read More

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