Instructions For Form 1099-K - 2018 (Page 2 of 5) in pdf

1.6049-5(c)(5) as a U.S. payer or U.S. middleman is not

This exception only applies if the PSE is a U.S. payer

required to file Form 1099-K for payments to a

making a payment to an account maintained outside the

participating payee with a foreign address as long as,

United States by the PSE, or, if the PSE does not maintain

prior to payment, the PSE has documentation on which

an account for the payee, to another financial institution

the PSE may rely to treat the payment as made to a

maintaining the account outside the United States. To

foreign person according to Regulations section

apply this exception, the PSE must also reasonably

1.1441-1(e)(1)(ii) (substituting “payer” for the term

determine that the participating payee is doing business

“withholding agent” and without regard to the limitations to

outside the United States based on all the information

amounts subject to withholding requirements of chapter 3

obtained or reviewed in connection with the establishment

of the Code and its regulations).

or maintenance of the contractual relationship with the

participating payee (including information required to be

A PSE must file Form 1099-K for payments made

obtained or reviewed under procedures required to be

outside the United States to an offshore account if any of

established under and compliant with 31 CFR §

the following apply.

1020.220). However, a PSE must file Form 1099-K for

There is a U.S. residential or correspondence address

payments made to an offshore account if any of the

associated with the participating payee.

following apply.

The PSE has standing instructions to direct the

There is a U.S. residential or correspondence address

payment to a bank account maintained in the United

associated with the participating payee.

States.

The PSE has standing instructions to direct the

The participating payee submits for payment in U.S.

payment to a bank account maintained in the United

dollars.

States.

The PSE knows or has reason to know that the

The participating payee submits for payments in U.S.

participating payee is a U.S. person.

dollars.

A PSE is not required to file Form 1099-K for payments

The PSE knows or has reason to know that the

made outside the United States to an offshore account in

participating payee is a U.S. person.

the circumstances described in the preceding paragraph if

A PSE that obtains a valid Form W-8 or documentary

the PSE does not know that the payee is a U.S. person

evidence establishing the payee's non-U.S. status and

and the PSE obtains from the payee a Form W-8BEN,

does not know the payee is a U.S. person is not required

Certificate of Foreign Status of Beneficial Owner for

to file Form 1099-K even if any of the circumstances

United States Tax Withholding and Reporting

described in the preceding paragraph are present. For

(Individuals); or Form W-8ECI, Certificate of Foreign

more information on this exception, see Notice 2012-2,

Person’s Claim That Income Is Effectively Connected

available at IRS.gov/irb/2012-45_IRB#NOT-2012-2.

With the Conduct of a Trade or Business in the United

Exception for payments by U.S. payers to foreign

States; or documentary evidence establishing the payee’s

payees prior to 2011. For payments under contractual

non-U.S. status; or a suitable substitute form as described

obligations entered into before January 1, 2011, a PSE

in Notice 2011-71, available at

IRS.gov/irb/

that is a U.S. payer or U.S. middleman is not required to

2011-37_IRB#NOT-2011-71. The W-8 forms (or the

file a Form 1099-K for a payment to a participating payee

suitable substitutes) must be collected by the PSE no later

with a foreign address as long as the payer does not know

than 90 days after the date on which the PSE enters into

or have reason to know that the participating payee is a

the contractual obligations with the participating payee.

U.S. person.

The W-8 forms (or suitable substitutes) and documentary

evidence may be relied upon only when the requirements

A foreign address means any address that is not within

described in Notice 2011-71 are satisfied.

the United States (the States and the District of

Columbia).

A PSE does not have to file Form 1099-K for payments

made outside the United States (within the meaning of

A renewal of a contractual obligation will not result

Regulations section 1.6049-5(e)) to an offshore account

in a new contractual obligation unless there is a

(as described in Notice 2012-2) of a participating payee

material modification to the contractual obligation.

CAUTION

with only a foreign address if the name of the participating

payee indicates that it is a per se corporation under

Exception for payments made by non-U.S. payers

Regulations section 301.7701-2(b)(8)(i) and the PSE does

or middlemen to foreign payees. A PSE that is not

not know or have reason to know that the participating

described as a U.S. payer or U.S. middleman in

payee is a U.S. person.

Regulations section 1.6049-5(c)(5) is not required to file a

A PSE may apply the grace period rules under

Form 1099-K for payment to a participating payee that

Regulations section 1.6049-5(d)(2)(ii) for payments to a

does not have a U.S. address as long as the PSE does

participating payee with only a foreign address without

not know or have reason to know that the participating

regard to whether the amounts paid are described in

payee is a U.S. person. If the participating payee has any

Regulations section 1.1441-6(c)(2) or are reportable

U.S. address, the PSE may treat the participating payee

under Code sections 6042, 6045, 6049, or 6050N.

as a foreign person only if the PSE has documentation on

Exception for payments made by U.S. payers or

which the PSE may rely to treat the payment as made to a

middlemen to accounts maintained outside the

foreign person according to Regulations section

United States after 2010. A PSE is also not required to

1.1441-1(e)(1)(ii).

file Form 1099-K in certain circumstances for payments

A PSE that is a non-U.S. payer that has reason to know

made to an account maintained outside the United States.

but not actual knowledge that a participating payee is a

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Instructions for Form 1099-K (2018)

Instructions For Form 1099-K - 2018 Page 2

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