| Pub. 686, Certification for Reduced Tax Rates in Tax Treaty Countries |
2005 Tax Year |
Publication 686 - Main Contents
Eligibility for Benefits Under Tax Treaties
The United States has income tax treaties with many countries. Generally, treaty benefits are available only to residents
of the United States. In
addition, to be eligible for benefits, a U.S. resident must be the beneficial owner of the payment. In the case of an entity
such as a corporation
that is a U.S. resident, it must meet the requirements of a limitation on benefits article, if any, in a treaty.
The United States cannot certify that a limitation on benefits article has been met or that an individual or other entity
is the beneficial owner
of an item of income. If asked by the foreign withholding agent, the individual or other entity must document that these requirements
have been met.
Many U.S. treaty partners require that the U.S. Government certify that the person claiming the benefits is a resident of
the United States. The
United States provides this residency certification on a computer-generated letter from the Internal Revenue Service (IRS).
This letter is Form 6166,
Certification of United States Residency.
You should examine the specific treaty articles to find out if any tax credit, tax exemption, reduced rate of tax, or other
treaty benefit or
safeguard applies.
Publication 901, U.S. Tax Treaties, gives a quick reference to tax treaty provisions between the United States and tax treaty
countries.
In general, under an income tax treaty, an individual or other entity is a resident of the United States if the individual
or other entity is
subject to U.S. tax by reason of its residence, citizenship, place of incorporation, or other similar criteria. U.S. residents
are subject to tax in
the United States on their worldwide income. An entity is considered subject to tax on its worldwide income even if it is
an entity that is
statutorily exempt from tax, such as a pension fund or charity. Similarly, individuals are considered subject to tax even
if their income is less than
the amount that would require that they file an income tax return. An entity is not subject to tax, however, if the entity
is a partnership, grantor
trust, or other fiscally transparent entity. In such instances, the partner or owner of such entity may be entitled to certification
based on the
status of the partner or owner.
In general, residency certification is granted only when the IRS can verify that the individual or entity claiming residence
has, for the year for
which certification is requested, either:
-
Filed an appropriate return, for example, a Form 1120 for a domestic corporation, or
-
In the case of a year for which a return is not yet due, filed a return for the most recent year for which a return was due.
Procedures for Certification
The United States will only certify that, for the certification year (the calendar year for which certification is requested),
you or the entity
was a resident for purposes of U.S. taxation or, in the case of a fiscally transparent entity, that the entity, when required,
filed an information
return and its partners, members, or other owners filed income tax returns as residents of the United States.
Certification forms.
Most treaty countries that require certification provide special forms for that purpose. These forms contain questions
that you must answer
followed by a statement to be completed by the country of residence certifying that you or the entity is a resident of that
country.
The IRS generally does not certify U.S. residency by using forms from other countries. The IRS requires that you submit
a completed Form 8802,
which is used to determine eligibility for certification.
If, after processing the Form 8802, the IRS determines that you or the entity is eligible for U.S. residency certification,
you will receive Form
6166, a computer-generated letter. This letter is the certification. It is on stationery bearing the U.S. Treasury Department
letterhead, the U.S.
Government watermark, and the copied signature of the Director, Customer Account Services (the Director), Philadelphia Accounts
Management Service
Center.
You can send Form 6166 to the foreign country to claim treaty benefits. Along with Form 6166, you should enclose the
completed foreign country's
certification form, if any.
If you are applying to the United Kingdom or Spain for treaty benefits, see the special procedures in the Form 8802 instructions.
Sending certification to a third party.
If you request that Form 6166 be mailed to a third party (an appointee), you must provide written authorization for
the IRS to release the
certification to the third party. If the certification is for a partnership, disregarded entity, S corporation (including
a QSSS), simple trust,
grantor trust, or common trust fund, each partner/shareholder/owner/participant/beneficiary must also provide such written
authorization.
Form 8821, Taxpayer Information Authorization, is used to authorize disclosure of taxpayer information to a designee
of the taxpayer.
Form 8821 cannot be used to authorize a third party to sign Form 8802 on your behalf.
Lines 3b and 3c of Form 8802 can, in certain circumstances, be used in place of Form 8821 to appoint a third party
to receive and inspect Form
6166.
Form 8802 does not authorize the third party to represent you before the IRS. If you are interested in having a third
party represent you before
the IRS, you must complete Form 2848, Power of Attorney and Declaration of Representative. Form 8802 applicants should note
that only those
individuals who are recognized to practice before the IRS can be authorized to represent the applicant. The only individuals
who can be recognized
representatives are the following.
-
Attorneys.
-
Certified public accountants.
-
Enrolled agents.
-
Enrolled actuaries (who have limited authority to practice before the IRS).
-
Other individuals (based on a relationship or special status with the taxpayer).
For more information, see Publication 947, Practice Before the IRS and Power of Attorney.
When to seek competent authority assistance.
If the request for certification is denied and you believe that you are entitled to treaty benefits under a specific
treaty article, you can
request assistance from the U.S. competent authority using the procedures described in Revenue Procedure 2002–52. A request
for competent
authority assistance regarding a residency issue will be accepted only if it is established that the issue requires consultation
with the foreign
competent authority to ensure consistent treatment by the United States and the applicable treaty partner.
The U.S. competent authority does not make unilateral determinations with respect to residency. Residency determinations
are made by mutual
agreement between the two competent authorities.
The U.S. competent authority cannot consider requests involving countries with which the United States does not have
a tax treaty.
Your request for competent authority assistance should be addressed to:
Internal Revenue Service
Director, International
SE:LM:IN:T:1
1111 Constitution Avenue, NW
Washington, DC 20224.
Additional information on requesting competent authority assistance is found in Revenue Procedure 2002-52, C.B. 242.
You can find Revenue Procedure
2002-52 on page 242 of Internal Revenue Bulletin 2002-31 at www.irs.gov/pub/irs-irbs/irb02-31.pdf.
General Application Procedures
To apply for U.S. residency certification, you must complete and sign Form 8802. You can apply for certification for the
current and any prior
calendar year. Only certain individuals have the authority to sign Form 8802. Generally, these individuals may authorize
a representative to sign
the Form 8802 on their behalf; they must use Form 2848 to do this. Custodians of accounts cannot be representatives and cannot
be authorized to sign
Form 8802 unless they are recognized to practice before the IRS. See Table 1 for a list of those who have authority to sign
Form 8802.
Table 1. Who Has Authority To Sign Form 8802
| IF the applicant is... |
THEN the individual with authority to sign Form 8802 is... |
| an individual |
the individual. |
| a married couple |
both the husband and the wife. |
| a partnership |
any partner or partners duly authorized to act for the partnership (general partner or tax matters
partner). The partner must certify that he or she has such authority.
|
| an S Corporation |
any corporate officer, for example, president, vice president, treasurer, chief accounting officer, etc., duly
authorized by the corporation to bind the corporation in accordance with applicable state law.
|
| a trust, common trust fund, grantor trust or simple trust |
the fiduciary (trustee, executor, administrator, receiver, or guardian). |
| an estate |
the personal representative (executor, executrix, administrator, administratrix, or anyone who is in charge of
the property of the decedent).
|
| a corporation |
any corporate officer, for example, president, vice-president, treasurer, chief accounting officer, etc., duly
authorized by the corporation to bind the corporation in accordance with applicable state law.
|
| an employee benefit plan or trust |
any organization officer, for example, president, vice-president, treasurer, chief accounting officer, etc.
duly authorized by the plan or trust to bind the plan or trust in accordance with applicable state law.
|
| an exempt organization |
any organization officer, for example, president, vice-president, treasurer, chief accounting officer, etc.,
duly authorized by the organization to bind the organization in accordance with applicable state law.
|
| a partnership under an IRC 761(a) election |
any partner or partners duly authorized to act for the partnership. The partner must certify that he or she
has such authority.
|
| a financial asset securitization investment trust (FASIT)
|
any corporate officer, for example, president, vice-president, treasurer, chief accounting officer, etc., duly
authorized by the owner corporation to bind the owner corporation in accordance with applicable state law.
|
| a governmental organization |
an officer of the governmental organization with authority in the course of his or her official duties to bind
the organization.
|
You must send the Form 8802 and all required statements and documentation to:
Internal Revenue Service
Philadelphia Accounts Management Center
U.S. Residency Certification Request
P.O. Box 16347
Philadelphia, PA 19114-0447
U.S.A.
You can also fax your request to the Philadelphia Service Center at 215-516-1035 or 215-516-3412. These are not toll-free
numbers.
Certification requests are generally processed within 30 days from the date received. When this is not possible, you should
receive notification of
the delay. If you do not receive either the certification, a notification of the delay, or a denial of certification within
30 days from the time the
request was mailed or faxed to the IRS, contact the certification unit at 215-516-7135. This is not a toll-free number.
Certification of U.S. residency.
The United States is certifying that, for the certification year, the applicant was a U.S. resident for purposes of
U.S. taxation. In the case of a
fiscally transparent entity, the United States is certifying that the entity filed any required information returns and its
partners, members, or
other owners filed income tax returns as residents of the United States. In general, residency certification is granted only
when the IRS can verify
that the applicant has, for the certification year, either:
-
Filed an appropriate return, or
-
In the case of a year for which a return is not yet due, filed a return for the most recent year for which a return was due.
If the applicant was not required to file a U.S. return for the tax periods on which certification will be based, other evidence
of U.S.
residency may be required. For more information, see the instructions for Form 8802, line 5.
Penalties of Perjury Statements
If the certification request is for the current year and/or the prior year, and a return is not yet due or is not required,
you may be required to
submit a penalties of perjury statement with Form 8802. You can enter the statement in the space provided under line 11 of
Form 8802 or attach the
statement to the form.
Penalties of perjury statements submitted independently of Form 8802 must have a valid signature. See Table 1.
Requests for current year certification.
If you are requesting certification for the current year, and the required return for the current year is not due
and has not been filed, you must
include a penalties of perjury statement that attests to the applicant's current residency status.
Table 2 lists the various statements that must be made under penalties of perjury when Form 8802 is submitted for
the current year.
If the prior year return has not been filed or a return was not required, the penalties of perjury statement must
also address your residency
status in the prior year. For example, if the current year is 2004, the penalties of perjury statement must include the following:
[insert applicant's name and TIN] was a U.S. resident for 2003 and will continue to be throughout the current year.
Note.
This statement is required of all applicants in this situation. In some instances, the applicant will not have been
a resident for the prior year
and therefore will only attest to residency status in the current year.
Foreign partnership not required to file Form 1065.
Generally, foreign partnerships are not required to file Form 1065, U.S. Return of Partnership Income, if they do
not have gross income that is
effectively connected to the conduct of a trade or business within the United States or do not have income derived from sources
within the United
States.
However, foreign partnerships that have U.S. partners can apply for residency certification for their U.S. partners.
Applications must include the
following.
-
The name and taxpayer identification number (TIN) of any partner for which certification is requested.
-
The type of U.S. return filed by any partner for which certification is requested.
-
Authorization (for example, Form 8821) from all partners authorizing the requestor to receive their individual tax information.
-
Authorization from the partnership, unless the requestor is a partner in the partnership.
-
If certification is requested for the current year, all partners must provide a penalties of perjury statement. See Table
2.
The foreign partnership is also required to submit a statement signed under penalties of perjury that the partnership
is not required to file Form
1065 under Regulation section 1.6031(a)-1(b).
When a partnership or pass-through entity is listed as a partner in the foreign partnership, the applicant must also
provide a list of those
partners, shareholders, participants, etc. and written authorization from those individuals explicitly allowing the third
party requestor to receive
the partner's tax information.
Disregarded entity (DRE).
When the certification is for a DRE that is newly formed, was established before 2001, or was established by default
(no Form 8832, Entity
Classification Election, was filed), the following statement must be provided under penalties of perjury:
FASIT.
When the certification is for a FASIT that is not required to file a U.S. tax return, the following statement must
be provided by the corporate
owner of the FASIT.
Spain.
Applicants from Spain must include a statement, in addition to the applicable statement from Table 2, that the applicant
does not have a permanent
address in Spain.
Table 2. Current Year Penalties of Perjury Statements
| IF the applicant is... |
THEN the Form 8802 penalties of perjury statement must include... |
| an individual |
a statement from the individual stating:
[insert name of individual][insert TIN] is a U.S. resident and will continue to be throughout the current tax year.
|
| a partnership |
• a statement from each individual partner for which certification is requested stating:
[insert name of partner][insert TIN] is a U.S. resident and will continue to be throughout the current tax year, and
|
| |
• a statement from a general partner stating:
[insert name of partnership][insert EIN] has filed its required return and the entity classification has not changed since the return was
filed.
|
| an S corporation |
• a statement from each individual shareholder for which certification is requested stating:
[insert name of shareholder][insert TIN] is a U.S. resident and will continue to be throughout the current tax year, and
|
| |
• a statement from an officer of the corporation with the authority to legally bind the corporation
stating:
[insert name of S corporation][insert EIN] has filed its required return and the entity classification has not changed since the return was filed.
|
| a common trust fund, domestic nongrantor trust, or grantor trust |
• a statement from each individual participant/beneficiary/owner stating:
[insert name][insert TIN] is a U.S. resident and will continue to be throughout the current tax year, and
• a statement from the trustee stating:
|
| |
[insert name of trust][insert EIN] has filed its required return and the entity classification has not changed since the return was filed.
Note: When the participant, beneficiary, or owner, is other than an individual, use the statement that corresponds to the type
of
entity.
|
| a trust |
a statement from the trustee stating:
[insert name of trust][insert EIN] is a U.S. resident and will continue to be throughout the current tax year.
|
| a corporation |
a statement from an officer of the corporation with the authority to legally bind the corporation
stating:
[insert name of corporation][insert EIN] is a U.S. resident and will continue to be throughout the current tax year.
|
| an exempt organization |
a statement from an officer of the organization with authority to legally bind the organization stating:
[insert name of organization][insert EIN] is a U.S. resident and will continue to be throughout the current tax year.
|
| an estate |
a statement from the personal representative stating:
[insert name of estate][insert EIN] is a U.S. resident and will continue to be throughout the current tax year.
|
| an employee benefit plan/trust |
a statement from an officer of the plan/trust with authority to legally bind the plan/trust stating:
[insert name of plan/trust][insert EIN] is a U.S. resident and will continue to be throughout the current tax year.
|
| a partnership under an IRC section 761(a) election |
• a statement from each partner for which certification is requested stating:
[insert name of partner][insert EIN] is a U.S. resident and will continue to be throughout the current tax year, and
• a statement from a general partner stating:
a. The partnership has made an election pursuant to IRC section 761(a). As a result, it is not required
to file Form 1065, U.S. Partnership Return of Income, on an annual basis and all its partners report
their respective shares of income, gain, loss, deductions and credits on their tax returns as
required.
b. The partnership's entity classification has not changed since the filing of the partners' returns.
|
| a partnership under Regulation section 1.6031(a)-1(b) |
an additional statement from a general partner stating:
[insert name of partnership][insert EIN] is not required to file Form 1065, U.S. Return of Partnership Income, under Regulation section 1.6031(a)-1(b)
and the entity classification has not changed since the filing of the partners' returns.
|
| a FASIT |
a statement from an officer of the corporation with the authority to legally bind the corporation
stating:
a.
[insert name of corporation][insert EIN] is the corporate owner of
[insert
name of FASIT], which is treated as a FASIT under IRC section 860H, and as such, the
[insert
name of corporation] reports all of
[insert name of FASIT] income, gain, loss, deductions,
and credits on
[insert name of corporate owner]'s Form 1120, U.S. Corporate Income Tax
Return.
b. The corporation is a U.S. resident and will continue to be throughout the current tax year.
|
You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information
from the IRS in several
ways. By selecting the method that is best for you, you will have quick and easy access to tax help.
Contacting your Taxpayer Advocate.
If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate.
The Taxpayer Advocate independently represents your interests and concerns within the IRS by protecting your rights
and resolving problems that
have not been fixed through normal channels. While Taxpayer Advocates cannot change the tax law or make a technical tax decision,
they can clear up
problems that resulted from previous contacts and ensure that your case is given a complete and impartial review.
To contact your Taxpayer Advocate:
-
Call the Taxpayer Advocate toll free at
1-877-777-4778.
-
Call, write, or fax the Taxpayer Advocate office in your area.
-
Call 1-800-829-4059 if you are a
TTY/TDD user.
-
Visit the web site at www.irs.gov/advocate.
For more information, see Publication 1546, The Taxpayer Advocate Service.
Free tax services.
To find out what services are available, get Publication 910, Guide to Free Tax Services. It contains a list of free
tax publications and an index
of tax topics. It also describes other free tax information services, including tax education and assistance programs and
a list of TeleTax topics.
Internet. You can access the IRS web site 24 hours a day, 7 days a week at www.irs.gov to:
-
E-file. Access commercial tax preparation and e-file services available for free to eligible taxpayers.
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Check the amount of advance child tax credit payments you received in 2003.
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Check the status of your 2003 refund. Click on “Where's My Refund” and then on “Go Get My Refund Status.” Be sure to wait at least
6 weeks from the date you filed your return (3 weeks if you filed electronically) and have your 2003 tax return available
because you will need to
know your filing status and the exact whole dollar amount of your refund.
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Download forms, instructions, and publications.
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Order IRS products on-line.
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See answers to frequently asked tax questions.
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Search publications on-line by topic or keyword.
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Figure your withholding allowances using our Form W-4 calculator.
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Send us comments or request help by e-mail.
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Sign up to receive local and national tax news by email.
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Get information on starting and operating a small business.
You can also reach us using File Transfer Protocol at ftp.irs.gov.
Fax. You can get over 100 of the most requested forms and instructions 24 hours a day, 7 days a week, by fax. Just call 703-368-9694
from your fax machine. Follow the directions from the prompts. When you order forms, enter the catalog number for the form
you need. The items you
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For help with transmission problems, call 703-487-4608.
Long-distance charges may apply.
Phone. Many services are available by phone.
-
Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and publications
and
prior-year forms and instructions. You should receive your order within 10 days.
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Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
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Solving problems. You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers.
An employee can
explain IRS letters, request adjustments to your account, or help you set up a payment plan. Call your local Taxpayer Assistance
Center for an
appointment. To find the number, go to www.irs.gov or look in the phone book under “United States Government, Internal Revenue
Service.”
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TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax or account questions or to order
forms and
publications.
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TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics.
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Refund information. If you would like to check the status of your 2003 refund, call 1-800-829-4477 for automated refund information
and
follow the recorded instructions or call 1-800-829-1954. Be sure to wait at least 6 weeks from the date you filed your return
(3 weeks if you filed
electronically) and have your 2003 tax return available because you will need to know your filing status and the exact whole
dollar amount of your
refund.
Evaluating the quality of our telephone services. To ensure that IRS representatives give accurate, courteous, and professional answers,
we use several methods to evaluate the quality of our telephone services. One method is for a second IRS representative to
sometimes listen in on or
record telephone calls. Another is to ask some callers to complete a short survey at the end of the call.
Walk-in. Many products and services are available on a walk-in basis.
-
Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications.
Some
IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply
stores have a collection of
products available to print from a CD-ROM or photocopy from reproducible proofs. Also, some IRS offices and libraries have
the Internal Revenue Code,
regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.
-
Services. You can walk in to your local Taxpayer Assistance Center every business day to ask tax questions or get help with
a tax problem.
An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. You can set up
an appointment by calling
your local Center and, at the prompt, leaving a message requesting Everyday Tax Solutions help. A representative will call
you back within 2 business
days to schedule an in-person appointment at your convenience. To find the number, go to www.irs.gov or look in the phone book under
“United States Government, Internal Revenue Service.”
Mail. You can send your order for forms, instructions, and publications to the Distribution Center nearest to you and receive a
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Western part of U.S.:
Western Area Distribution Center
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Central part of U.S.:
Central Area Distribution Center
P.O. Box 8903
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-
Eastern part of U.S. and foreign addresses:
Eastern Area Distribution Center
P.O. Box 85074
Richmond, VA 23261-5074
CD-ROM for tax products. You can order IRS Publication 1796, Federal Tax Products on CD-ROM, and obtain:
-
Current-year forms, instructions, and publications.
-
Prior-year forms and instructions.
-
Frequently requested tax forms that may be filled in electronically, printed out for submission, and saved for recordkeeping.
-
Internal Revenue Bulletins.
Buy the CD-ROM from National Technical Information Service (NTIS) on the Internet at www.irs.gov/cdorders for $22 (no handling fee) or
call 1-877-233-6767 toll free to buy the CD-ROM for $22 (plus a $5 handling fee). The first release is available in early
January and the final
release is available in late February.
CD-ROM for small businesses. IRS Publication 3207, Small Business Resource Guide, is a must for every small business owner or any
taxpayer about to start a business. This handy, interactive CD contains all the business tax forms, instructions and publications
needed to
successfully manage a business. In addition, the CD provides an abundance of other helpful information, such as how to prepare
a business plan,
finding financing for your business, and much more. The design of the CD makes finding information easy and quick and incorporates
file formats and
browsers that can be run on virtually any desktop or laptop computer.
It is available in early April. You can get a free copy by calling 1-800-829-3676 or by visiting the web site at www.irs.gov/smallbiz.
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