Form W-9 Revision Adds New Reporting on Flow-through Entities to Taxpayer Identification Requests

The IRS on July 26 released a draft 2023 revision of Form W-9, “Request for Taxpayer Identification Number and Certification,” that includes a new reporting line for flowthrough entities like partnerships and trusts.

Individuals or entities that are required to file certain information returns with the IRS use Form W-9 to request the taxpayer identification number (TIN) from U.S. persons and resident aliens for the required reporting. Taxpayers that do not reply to W-9 requests with their correct TIN may be subject to backup withholding.

The draft 2023 revised form adds a new line 3b checkbox relating to flowthrough entities. Line 3 of the current form (2018 revision) asks respondents to check a box to indicate their federal tax classification as an individual, C corporation, partnership, etc. The revised form breaks off a new line 3b, adding an additional checkbox for entities that select “partnership” or “trust/estate” on line 3a (current line 3) and that are providing the Form W-9 to a partnership, trust, or estate. The form instructs these entities to check the box in line 3b if they have any foreign partners, owners, or beneficiaries.

The IRS explains that the change is intended to give flow-through entities information regarding indirect foreign partners, owners, or beneficiaries for purposes of complying with relevant reporting requirements. This includes requirements for partnerships with indirect foreign partners to complete Form 1065 Schedules K-2 and K-3.

The instructions to the draft Form W-9 clarify that for purposes of the checkbox in line 3b, partnership includes a limited liability company classified as a partnership for U.S. federal tax purposes. They further state that respondents must check the line 3b box if they receive a Form W-8 (or documentary evidence) from any partner, owner, or beneficiary establishing foreign status or if they receive a Form W-9 from any partner, owner, or beneficiary that has checked the box on line 3b.

The draft Form W-9 has a revision date of October 2023. Once finalized, withholding agents are generally required to accept the current version Form W-9.

Meet ATA’s international tax expert, Jim Duncan, CPA.


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