Instructions For Forms 8804, 8805, And 8813

the withholding certificate to determine

of section 1461 through section 1463, to

Determining If a Partner Is

that the partner is not subject to

have been required to withhold such tax.

a Foreign Person

withholding. A partnership may not rely on

Effectively Connected

a withholding certificate if it knows or has

A partnership must determine if any

reason to know that any information

partner is a foreign person subject to

Taxable Income (ECTI)

provided on the withholding certificate is

section 1446. A foreign person is any

incorrect or unreliable, and based on that

person that is not a U.S. person within the

Definition

information the partnership should pay

meaning of section 7701(a)(30). As such,

more section 1446 withholding tax. Under

“Effectively connected taxable income” is

a foreign person includes a nonresident

those circumstances, the certificate is not

the excess of the gross income of the

alien individual, foreign corporation,

partnership that is effectively connected

valid.

foreign partnership, foreign trust or estate,

under section 864(c), or treated as

The partnership will not be subject to

or a foreign organization described in

effectively connected with the conduct of

penalties for its failure to pay the section

section 501(c).

a U.S. trade or business, over the

1446 withholding tax prior to the date that

A partnership may determine a

allowable deductions that are connected

it knows or has reason to know that the

partner’s foreign or nonforeign status by

to such income. See Pub. 519, U.S. Tax

certificate is not valid. However, the

relying on a W-8 form (for example, Form

Guide for Aliens, for detailed instructions

partnership is fully liable for section 1446

W-8BEN), Form W-9, an acceptable

regarding the computation of effectively

withholding tax for the year, as well as

substitute form, or by other means. See

connected taxable income. For purposes

penalties and interest, starting with the

Form of certification and Use of Means

of these instructions, figure this income

installment period or Form 8804 filing

Other Than Certification below. Also, see

with the following statutory adjustments:

period during which it knows or has

Regulations section 1.1446-1(c) for

1. Section 703(a)(1) does not apply.

reason to know that the certificate is not

additional information.

2. The partnership is allowed a

valid. See Regulations section

Certification of Nonforeign

deduction for depletion of oil and gas

1.1446-1(c)(2)(iii).

wells, but the amount of the deduction

Status

Requirements for certificates to be

must be determined without regard to

valid. Generally, the validity of a Form

In general, a partnership may determine

sections 613 and 613A.

W-9 is determined under section 3406

that a partner is not a foreign person by

3. The partnership may not take into

and Regulations section 31.3406(h)-3(e).

obtaining a Form W-9 from the partner. A

account items of income, gain, loss, or

A Form W-8 is only valid if:

partnership that has obtained this

•

deduction allocable to any partner that is

Its validity period has not expired,

certification may rely on it to establish the

•

not a foreign partner.

The partner submitting the form has

nonforeign status of a partner. See Effect

signed it under penalties of perjury, and

of certification below.

•

See Regulations section 1.1446-2 for

It contains all the required information.

Form of certification. Generally, a

additional adjustments that may be

See Regulations section

partnership may determine a partner’s

required.

1.1446-1(c)(2)(iv) for more details.

foreign or nonforeign status by obtaining

A partnership’s ECTI includes

Change in circumstances. A partner

one of the following withholding

partnership income subject to a partner’s

must provide a new withholding certificate

certificates from the partner.

•

election under section 871(d) or 882(d)

when there is a change in circumstances.

Form W-8BEN, Certificate of Foreign

(election to treat real property income as

The principles of Regulations section

Status of Beneficial Owner for United

income connected with a U.S. business).

1.1441-1(e)(4)(ii)(D) shall apply when a

States Tax Withholding.

•

It also includes any partnership income

change in circumstances has occurred

W-8ECI, Certificate of Foreign Person’s

treated as effectively connected with the

(including situations where the status of a

Claim That Income is Effectively

conduct of a U.S. trade or business under

U.S. person changes) that requires a

Connected With the Conduct of a Trade

section 897 (disposition of investment in

partner to provide a new withholding

or Business in the United States.

•

U.S. real property), and other items of

certificate.

W-8EXP, Certificate of Foreign

partnership income treated as effectively

Government or Other Foreign

How long to keep the certifications. A

connected under other provisions of the

Organization for United States Tax

partnership or nominee who has

Internal Revenue Code, regardless of

Withholding.

responsibility for paying section 1446

•

whether those amounts are taxable to the

W-8IMY, Certificate of Foreign

withholding tax must retain each

partner.

Intermediary, Foreign Flow-Through

withholding certificate, statement, and

Entity, or Certain U.S. Branches for

See Regulations section 1.1446-2 for

other information received from its direct

United States Tax Withholding.

additional information for computing

and indirect partners for as long as it may

•

Form W-9, Request for Taxpayer

ECTI.

be relevant to the determination of the

Identification Number and Certification.

withholding agent’s section 1446 tax

•

Amount Allocable to Foreign

An acceptable substitute form (as

liability under section 1461 and the

Partners

described in Regulations section

regulations thereunder.

1.1446-1(c)(5)).

The amount of a partnership’s ECTI for

•

Use of Means Other Than

A statement required from a domestic

the partnership’s tax year allocable to a

Certification

grantor trust (as described in Regulations

foreign partner under section 704 equals

section 1.1446-1(c)(2)(ii)(E)) with the

A partnership is not required to obtain a

(a) the foreign partner’s distributive share

necessary documentation required for the

Form W-9. It may rely on other means to

of effectively connected gross income of

trust and the grantor.

learn the nonforeign status of the partner.

the partnership for the partnership’s tax

Effect of certification. Generally, a

But if the partnership relies on other

year that is properly allocable to the

partnership that has obtained a

means and erroneously determines that

partner under section 704, minus (b) the

withholding certificate (for example, a

the partner was not a foreign person, the

foreign partner’s distributive share of

Form W-8 or W-9) according to the rules

partnership will be held liable for payment

deductions of the partnership for that year

in these instructions may rely on the

of the tax, any applicable penalties, and

that are connected with that income under

certification to determine whether the

interest. A partnership is not required to

section 873 or section 882(c)(1) and that

partner is a foreign or nonforeign partner

rely on other means to determine the

are properly allocable to the partner under

for purposes of computing section 1446

nonforeign status of a partner and may

section 704. This income must be

tax, and if such partner is a foreign

demand a Form W-9. If a certification is

computed by taking into account any

partner, to determine whether or not such

not provided, the partnership may

adjustments to the basis of the

partner is a corporation for U.S. tax

withhold tax under section 1446 of the

partnership property described in section

purposes. The partnership may also use

Code and will be considered for purposes

743 according to the partnership’s

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Instructions for Forms 8804, 8805, and 8813

Instructions For Forms 8804, 8805, And 8813 - 2007 Page 2

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