Letter from IRS regarding 1446 tax withholding for foreign partners

Juan F. Jaramillo on

We have a club with 3 non-us persons and the IRS sent us a
letter regarding a possible tax penalty. We filed the forms
prepared by Bivio but it seems that we needed additional
forms. How we should go about this since only had a minimal
income from some dividends that total just over $100 for all
three partners without the deductions of our yearly expenses
(with this it is more like $60.00 in total). What should we
do?

iras1 on

You need to carefully review all of the instructions for Form 1065, paying particular attention to the questions on Schedule B regarding non-US taxpayers. They will direct you to other forms that you may need to complete.

You might want to consult a tax professional for assistance and you may need to force any non-US investors to withdraw from your club if you're not willing to do all that the IRS requires with regard to withholding taxes.

Ira Smilovitz

In a message dated 05/18/09 19:54:53 Eastern Daylight Time, amossiou@bivio.com writes:

We have a club with 3 non-us persons and the IRS sent us a
letter regarding a possible tax penalty. We filed the forms
prepared by Bivio but it seems that we needed additional
forms. How we should go about this since only had a minimal
income from some dividends that total just over $100 for all
three partners without the deductions of our yearly expenses
(with this it is more like $60.00 in total). What should we
do?

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