US Treasury Issues Guidance On Information Reporting Of Dividends

by Mike Godfrey, Tax-News.com, Washington

26 October 2004

The US Treasury Department and the Internal Revenue Service (IRS) on Friday issued guidance regarding the information reporting of dividends from foreign corporations that are paid to individuals and that may be eligible for reduced rates of tax.

Notice 2004-71 aims to provide guidance for taxpayers required to prepare form 1099-DIV and other information reporting with respect to dividends from foreign corporations, and for individuals receiving such forms.

Form 1099-DIV includes a separate box identifying the amount of dividends eligible for reduced rates of tax. A dividend paid by a foreign corporation is eligible for the reduced rates if it satisfies the special rules applicable to foreign dividends.

Last year, the Treasury Department and the IRS provided simplified procedures for 2003 information reporting of foreign dividends on Form 1099-DIV, and the notice issued on Friday extends those simplified procedures to apply to 2004 information reporting.

The Treasury further revealed that it intends shortly to issue detailed guidance regarding information reporting procedures to be applied for future years. The guidance will be issued in the form of proposals in order to allow interested parties to comment.

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