Notice 2011-71

APPENDIX
U.S. INCOME TAX TREATIES SATISFYING THE REQUIREMENTS OF SECTION 1(h)(11)(C)(i)(II)
Australia
Austria
Bangladesh
Bulgaria
Barbados
Belgium
Canada
China
Cyprus
Czech Republic
Denmark
Egypt
Estonia
Finland
France

Germany
Greece
Hungary
Iceland
India
Indonesia
Ireland
Israel
Italy
Jamaica
Japan
Kazakhstan
Korea
Latvia
Lithuania

Documentation Requirements
Under Section 6050W for
U.S. Payors Making Payment
Outside the United States to
an Offshore Account
Notice 2011–71
PURPOSE
This notice provides interim guidance to payment settlement entities (as
defined in §1.6050W–1(a)(4)(i)) (PSEs)
that are United States payors or United
States middlemen (each as defined in
§1.6049–5(c)(5)) (U.S. payors) regarding
the circumstances under which such a PSE
must obtain, review, and maintain documentation to establish that a participating
payee is a foreign person for purposes of
section 6050W. The Treasury Department
and the Internal Revenue Service (IRS)
intend to amend the regulations under
section 6050W to reflect the guidance
provided in this notice. PSEs may rely on
the interim guidance in this notice until
the regulations are amended.
BACKGROUND
Section 6050W was added by section
3091 of the Housing Assistance Tax Act
of 2008, Div. C of Pub. L. No. 110–289,
122 Stat. 2653 (the Act) and requires information returns to be made by certain payors with respect to payments made in settlement of payment card transactions and

2011–37 I.R.B.

Luxembourg
Malta
Mexico
Morocco
Netherlands
New Zealand
Norway
Pakistan
Philippines
Poland
Portugal
Romania
Russian Federation
Slovak Republic
Slovenia

third party payment network transactions.
Section 6050W(d)(1)(B) provides that, except as provided by the Secretary in regulations or other guidance, the term participating payee does not include any person
with a foreign address. The final regulations prescribe the circumstances in which
a PSE is required to report payments made
to a participating payee that has a foreign
address. Specifically, the final regulations
provide that a PSE that is not a U.S. payor
is not required to report payments made
to a participating payee that does not have
a U.S. address as long as the PSE neither knows nor has reason to know that
the payee is a United States person (U.S.
person). If the participating payee has any
U.S. address, such a PSE may treat the participating payee as a foreign person only
if the PSE has in its files documentation
upon which the PSE may rely to treat the
payment as made to a foreign person in accordance with §1.1441–1(e)(1)(ii).
The final regulations also provide that
a PSE that is a U.S. payor is not required
to report payments to payees with a foreign address as long as, prior to payment,
the payee has provided the payor with
documentation upon which the payor
may rely to treat the payment as made
to a foreign person in accordance with
§1.1441–1(e)(1)(ii).
In addition, the final regulations provide a presumption under which a PSE that
is a U.S. payor making a payment outside the United States (within the meaning
of §1.6049–5(e)) to an offshore account
(as defined in §1.6049–5(c)(1)) need not
report payments to a participating payee

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South Africa
Spain
Sri Lanka
Sweden
Switzerland
Thailand
Trinidad and Tobago
Tunisia
Turkey
Ukraine
United Kingdom
Venezuela

with only a foreign address if the name
of the participating payee indicates that it
is a foreign per se corporation listed in
§301.7701–2(b)(8)(i) (a foreign per se corporation) and the PSE neither knows nor
has reason to know that the participating
payee is a U.S. person. The final regulations also provide a grace period after account opening to collect documentation by applying the grace period rules
of §1.6049–5(d)(2)(ii) if the participating
payee has only a foreign address.
The final regulations apply to returns
for calendar years beginning after December 31, 2010. The final regulations also
provide a transition rule, which provides
that for payments made pursuant to contractual obligations entered into before
January 1, 2011, a PSE that is a U.S. payor
is not required to report payments made
to a participating payee with a foreign
address as long as the U.S. payor neither
knows nor has reason to know that the
payee is a U.S. person. For this purpose,
a renewal of such a contractual obligation
will not result in a new contractual obligation unless there is a material modification
of the contractual obligation.
DISCUSSION
Treasury and the IRS have received
comments citing administrative burdens
associated with implementing the final
regulations and requesting that, in light
of those administrative burdens, the final regulations be amended so that PSEs
that are U.S. payors operating outside the
United States would be required to collect

September 12, 2011

documentation to determine the U.S. or
non-U.S. status of a participating payee
only if certain indicia of U.S. status are
present.
In response to these comments, the
Treasury Department and the IRS intend
to amend the regulations under section
6050W to provide that a PSE that is a
U.S. payor will only be required to make
the return of information required under
§1.6050W–1(a)(1) with respect to a payment made outside the United States to
an offshore account if any of the following applies: (i) there is a U.S. address
associated with the participating payee
(whether a residence address or correspondence address); (ii) the PSE has standing
instructions to direct the payment to a
bank account maintained in the United
States; (iii) the participating payee submits for payment in U.S. dollars; or (iv)
the PSE knows or has reason to know
that the participating payee is a U.S. person. A PSE will not be required to make
the return of information required under
§1.6050W–1(a)(1) with respect to a payment made outside the United States to
an offshore account in the circumstances
described in the preceding sentence if the
PSE obtains from the participating payee
a Form W–8 or documentary evidence
establishing the payee’s non-U.S. status
and the PSE does not know that the payee
is a U.S. person. For this purpose, Forms
W–8 (or the substitute forms described
below) and documentary evidence: (i)
must be collected by the PSE by the later
of January 1, 2012, or the date that is 90
days after the date on which the PSE enters
into the contractual obligations with the
participating payee; and (ii) in the case of
a Form W–8 (or substitute form described
below), may be relied upon only when
the requirements of §1.1441–7(b)(5)(i)(A)
or (B), and (ii), are satisfied, or, in the
case of documentary evidence, may be
relied upon only when the requirements
of §1.1441–7(b)(7) and –7(b)(8)(ii) and
(iii) are satisfied. In the case of a payment to a foreign payee of income that is
effectively connected with the conduct of
a trade or business in the United States,
the appropriate withholding certificate is
a Form W–8ECI. For all other payments,
the appropriate withholding certificate is a
Form W–8BEN.
The special rule in the final regulations
for a participating payee that has a name

September 12, 2011

that indicates it is a foreign per se corporation will be retained. That is, a PSE that is
a U.S. payor will not be required to make
the return of information required under
§1.6050W–1(a)(1) with respect to a payment made outside the United States to an
offshore account to a participating payee
with only a foreign address if the name of
the participating payee indicates that it is
an entity listed as a per se corporation under §301.7701–2(b)(8)(i) unless the PSE
knows or has reason to know that the payee
is a U.S. person.
Treasury and the IRS also intend to
amend the regulations to clarify that a PSE
that is not a U.S. payor, and that has reason
to know, but not actual knowledge, that a
participating payee is a U.S. person, will
not be required to make the return of information required under §1.6050W–1(a)(1)
if the PSE obtains from the payee a Form
W–8 that satisfies the requirements of
§1.1441–7(b)(5)(i)(A) or (B), and (ii),
or documentary evidence that satisfies
the requirements of §1.1441–7(b)(7) and
–7(b)(8)(ii) and (iii).
Treasury and the IRS also intend to
modify the regulations to allow a PSE to
accept a substitute form in lieu of a Form
W–8BEN in order for a participating payee
to certify its non-U.S. status. Such substitute form will be acceptable provided
that it contains the payee’s name, country
of incorporation (when applicable), type
of entity, residence and mailing address
(if different from residence address), the
certification of the payee’s non-U.S. status made under penalties of perjury and,
in the case of a participating payee that
is an entity, the capacity of the individual providing the certification of behalf
of the payee. In lieu of the certification
and penalties-of-perjury statement contained on the Form W–8BEN, a substitute
form may contain the following statement:
“Under penalties of perjury, I declare that
the payee providing this certification is not
a United States person (i.e., a citizen or
resident of the United States as determined
for U.S. federal tax purposes, a corporation or partnership created or organized in
the United States or under the law of the
United States or of any State, any estate
that would be subject to U.S. federal income tax on income from sources without
the United States which is not effectively
connected with the conduct of a trade or
business within the United States, or any

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trust if a court within the United States is
able to exercise primary supervision over
the administration of the trust and one or
more United States persons have the authority to control all substantial decisions
of the trust), that the income to which
this certification relates is not effectively
connected with the conduct of a trade or
business in the United States, and that the
undersigned has examined the information on this form and to the best of my
knowledge and belief it is true, correct,
and complete. Furthermore, I authorize
this form to be provided to any person that
has control, receipt, or custody of the payment to which I am entitled or any person
that can disburse or make the payments to
which I am entitled.”
Treasury and the IRS have also received
comments questioning whether, for purposes of determining whether the requirements of §1.1441–1(e)(1)(ii) are satisfied,
a PSE may rely on documentary evidence
that is more than three years old. Section
1.1441–1(e)(1)(ii)(A)(2) provides that, if a
payment is made outside the United States
to an offshore account, the withholding
agent can rely on documentary evidence
described in §1.1441–6(c)(3) or (4), or
§1.6049–5(c)(1). Section 1.6049–5(c)(1)
provides that a payor may rely on documentary evidence sufficient to establish
the identity of the payee and the status of
that person as a foreign person (including,
but not limited to, documentary evidence
described in §1.1441–6(c)(3) or (4)). Section 1.6049–5(c)(1) does not require that,
at the time of collection, the documentary
evidence be less than three years old. Under §1.1441–1(e)(4)(ii)(A) (cross-referenced by §1.6049–5(c)(2)), documentary
evidence described in §1.6049–5(c)(1) remains valid until the earlier of the last day
of the third calendar year following the
year in which the documentary evidence
is provided to the withholding agent or
the day that a change in circumstances
occurs that makes any information on the
documentary evidence incorrect.
Until the amendments to the final regulations described in this notice are published, PSEs may rely on the guidance provided in this notice.
DRAFTING INFORMATION
The principal author of this notice is
Danielle Nishida of the Office of Associate

2011–37 I.R.B.

Chief Counsel (International). For further
information regarding this notice, please
contact John Sweeney at (202) 622–3840
(not a toll-free call).

Use this Revenue Procedure to prepare Tax Year 2011 and prior year information returns for submission to Internal Revenue Service
(IRS) using electronic filing.
Caution to filers:
Please read this publication carefully. Persons or businesses required to file information returns electronically may be
subject to penalties for failure to file or include correct information if the instructions in this Revenue Procedure are
not followed.

IMPORTANT NOTES:
The IRS internet connection for filing information returns electronically is http://fire.irs.gov. The Filing Information
Returns Electronically (FIRE) system will be down from 6 p.m. ET Dec. 16, 2011, through Jan. 03, 2012 for yearly
updates. In addition, the FIRE system may be down every Wednesday from 2:00 a.m. to 5:00 a.m. ET for programming
updates. The FIRE system will not be available for submissions during these times.
The FIRE system does not provide fill-in forms for filing information returns.

The Form 4419 is subject to review before the approval to transmit electronically is granted and may require additional
documentation at the request of the IRS. If a determination is made concerning the validity of the documents transmitted
electronically, IRS has the authority to revoke the Transmitter Control Code (TCC) and terminate the release of the files.

Rev. Proc. 2011–40
TABLE OF CONTENTS

Part A. General
SEC. 1. PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
SEC. 2. NATURE OF CHANGES—CURRENT YEAR (TAX YEAR 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
SEC. 3. WHERE TO FILE AND HOW TO CONTACT THE IRS, INFORMATION RETURNS BRANCH (IRB) . . . . . . . . . . . . . . . . . . 239
SEC. 4. FILING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
SEC. 5. VENDOR LIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
SEC. 6. FORM 4419, APPLICATION FOR FILING INFORMATION RETURNS ELECTRONICALLY
(FIRE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
SEC. 7. RETENTION REQUIREMENTS AND DUE DATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242
SEC. 8. CORRECTED RETURNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243
SEC. 9. EFFECT ON PAPER RETURNS AND STATEMENTS TO RECIPIENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247
SEC. 10. COMBINED FEDERAL/STATE FILING PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247
SEC. 11. PENALTIES ASSOCIATED WITH INFORMATION RETURNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249
SEC. 12. STATE ABBREVIATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249

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September 12, 2011