Schedule M

Last week, Kimberly Schoenbacher, the Acting Director of Field Operations for the LB&I Foreign Payments Practice (“FPP”), sent a message to taxpayers who may be noncompliant with Chapter 3 and FATCA withholding and reporting: the IRS is actively honing in on Form 1042 nonfilers, Form 1042 failures, and Forms 1042 and 1042-S that do not reconcile. Schoenbacher remarked at the International Tax Withholding and Information Reporting Conference in New York that the IRS has sent letters to thousands of taxpayers across the country regarding compliance failures related to Forms 1042 (Annual Withholding Tax Return for U.S. Source Income of Foreign Persons) and 1042-S (Foreign Person’s U.S. Source Income Subject to Withholding). The letters were issued under the Form 1042/1042-S compliance campaign announced by LB&I in 2018. The campaign seeks to address withholding, deposit, and reporting noncompliance on the part of withholding agents making payments of U.S.-source income to foreign persons.
Continue Reading IRS Warns Withholding Agents to Consider FPP Correction Program to Avoid Penalties