NOTICE FROM THE TAX DEPARTMENT REGARDING MISSING ITIN/SSN

Effective January 1, 2003 the University will grant a tax treaty benefit for honoraria and independent personal services only if the international payee has a valid social security number (SSN) or individual taxpayer identification number (ITIN). The University will no longer recognize a tax treaty benefit if the payee provides a copy of Form W-7, Application for IRS Individual Taxpayer Identification Number, filed with the Internal Revenue Service (IRS) in lieu of an ITIN or SSN.

Although the IRS accepts an application for an ITIN (i.e., a copy of Form W-7) in lieu of an ITIN or SSN for tax treaty benefits, the IRS does require that the University obtain and report the ITIN or SSN on year end tax reporting forms (i.e., Form 1042-S). If the University fails to report an ITIN or SSN on a year end tax form, the IRS may disallow the tax treaty benefit for the international payee and assess the University for the additional 30% tax on the related payment.

Because of the difficulty in obtaining ITINs from international payees after the individuals have been paid, the University will discontinue the practice of recognizing tax treaty benefits without an ITIN or SSN.

Refund of Tax Withholding

The University will refund tax withheld on a payment made to an international payee once a valid ITIN or SSN is reported to the University Tax Department provided:

· The ITIN or SSN is reported in the same calendar year as the payment;

· A complete and valid Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, is attached to the original check request; and

· A copy of Form W-7 submitted to the IRS by the international payee is attached to the Form 8233 and original check request.

If the international payee does not receive a refund of tax withheld from the University, he or she may be able to claim a refund at the time he or she files a U.S. individual tax return.

Procedure to Obtain an ITIN

To obtain an ITIN, the individual must complete IRS Form W-7 and submit it to the IRS Philadelphia Service Center along with required documentation. If an individual requires assistance in completing Form W-7, the IRS can be contacted by calling (800)829-1040 (toll free, for calls within the U.S.) or (215)516-4846. In addition, assistance is available at the following U.S. consular offices: Berlin, Germany; London, England; Mexico City, Mexico; Paris, France; Rome, Italy; Santiago, Chile; Singapore; Tokyo, Japan.

Please contact the University Tax Office at (203) 432-5597 or email daysi.cardona@yale.edu if you have any questions or required additional information.

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