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#204159 - 06/24/04 08:02 PM aliens and social security numbers
HubbaBubba Offline
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Posts: 311
What is the correct "law" out there? If a non-resident alien comes in to open an interest bearing account, but does not have a social security number, can we open the account for him? He is also working, but his employer stated that they do not require a social security number.

This is what we did - we opened a non-interest bearing account for him and had him fill out the w-8ben form.

Are we correct. Please help - we need guidance since we do not deal with this situation often enough!

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General Discussion
#204160 - 06/24/04 08:46 PM Re: aliens and social security numbers
OkieOps Offline
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OkieOps
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OK
That is what we do. You can actually open an interest bearing account also, just make sure to always fill out and have the customer sign the W8-Ben.

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#204161 - 06/24/04 09:09 PM Re: aliens and social security numbers
HubbaBubba Offline
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How do you report the interest earned at the end of the year?

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#204162 - 06/24/04 10:07 PM Re: aliens and social security numbers
OkieOps Offline
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OK
To be honest with you, I'm not in that area. I believe it has to do with the coding on the account stating exempt.

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#204163 - 06/26/04 12:46 AM Re: aliens and social security numbers
Fraudman CFCI Offline
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First of all, for a non-res alien to be employed, they must have status that allows them to work here. Go to the DHS wewb site and look at the types of visas issued and compare this to the visa in the passport of your customer. Sounds like your customer's employer may have some problems as well as your customer, and maybe even your bank.

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#204164 - 07/19/04 06:17 PM Re: aliens and social security numbers
Awesome Gardener Offline
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I am not sure how to answer the question, but I have one of my own. Recently, we had a U.S. resident (so they say) open an account at our bank but they have no SSN or ITIN. If they are a U.S. resident with permanent residence listed as the U.S. on the W-8BEN then shouldn't they have some sort of TIN? Also, shouldn't they have a Resident Alien or Non-Resident Alien card? Please help!

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#204165 - 07/19/04 07:27 PM Re: aliens and social security numbers
HappyGilmore Offline
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Pulling people out of the ditc...
All foriegn born citizens who become US citizens are issued a social security number when they take the oath. Prior to that, if a green card holder and employed, they wuld need to have either a TIN or SS#. How did your bank open an account with either of these?
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#204166 - 07/19/04 09:04 PM Re: aliens and social security numbers
Snowqueen Offline
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dreaming of a warm beach......
We have some Amish people living in our area and they are not required to have a social security number. They have been born in the U.S. but because of their religion they are exempt from having a ss# or filing taxes. Go figure!!!

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#204167 - 07/19/04 09:11 PM Re: aliens and social security numbers
Princess Romeo Offline

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However, if the Amish person wants to open a bank account or loan, he/she will need to get a Social Security Number. CIP did not exempt the Amish.
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#204168 - 07/19/04 09:59 PM Re: aliens and social security numbers
Tisa Offline
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Quote:

permanent residence listed as the U.S. on the W-8BEN




If you check the instructions for the W-8BEN, the "Permanent Address" is supposed to be the country they claim as a permanent residence for the purposes of paying taxes. (Don't remember the exact wording, but it's somewhere around there.) If they're listing the US as the country where they pay taxes, guess what -- they need a SSN or TIN. And they're not a "non-resident" alien.
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#204169 - 07/19/04 10:01 PM Re: aliens and social security numbers
Tisa Offline
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Quote:

How do you report the interest earned at the end of the year?




If the customer (and all other owners of the account) qualifiy as Non-Resident Aliens and file valid Forms W-8BEN, they are exempt from information return reporting. That means you don't file 1099's on them. Unless their permanent residence is in Canada, then you file 1042-S every year.
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#204170 - 07/20/04 01:04 PM Re: aliens and social security numbers
Awesome Gardener Offline
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We opened a savings account for this customer and had them sign a W-8BEN form with no TIN supplied since they are a foreign person. However, when this form came back to our main office for review it stated their permanent address as the United States. We have questioned our branch office that opened this account as to why we accepted the form filled out this way. I really was just curious if anyone else had run into this problem? It makes no sense to me and I agree that we need to get a TIN from this customer.
What exactly is the difference between a non-resident alien and a resident alien? Do you necessarily need a W-8BEN for both instances?

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#204171 - 07/20/04 01:22 PM Re: aliens and social security numbers
BeachGirl Offline
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Posts: 206
Myrtle Beach, SC
Here is what I have in our P&P guidance for our Personal Banking Officers:

Resident Alien: Not a U.S. citizen, must hold a valid resident alien (green card) OR meet the substantial presence test (see below for explanation of the substantial presence test). May have a U.S. tax identification number (ITIN) or a Social Security Number (SSN). If they present you with an ITIN, use as you would a SSN.
A W-9 is required for all resident aliens. (Our signature card is a substitute W-9).
Document the type of document, country issued and expiration date in VIP Sales.

Substantial presence test: You are considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the U.S. on at least:
1) 31 days during the current year, and
2) 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
a) All the days you were present in the current year, and
b) 1/3 of the days you were present last year, and
c) 1/6 of the days you were present in the year before last.

Non-Resident Alien: not a U.S. Citizen; does not have a permanent residence in the U.S.; does not hold a green card or pass the substantial presence test. Should have one of the other immigration documents listed below:
An unexpired foreign passport with I-551 Stamp,
I-94 Departure Record issued by US Immigration,
Alien Registration Receipt Card I-151 - also known as a green card,
Temporary Resident Card I-688
Employment Authorization Card I-688A & I-688B
Unexpired Re-Entry Permit I-327
Unexpired Refugee Travel Document I-571
Unexpired visas F, J, M, or Q

A non-resident alien could have either an SSN or an ITIN. An ITIN may be issued by the IRS for tax purposes only. The presence of an ITIN has no bearing on immigrant status. If the customer has an ITIN, use in place of the SSN.
Must complete a form W8-BEN.
Document the type of document, country of issue and expiration date.
Send W8-BEN and attachments to Deposit Servicing, signature card and attachments to Imaging.
Verify the expiration date on the documentation provided. If the expiration date has passed, do not open the account. If they cannot provide you with this documentation, do not open the account.

Hopes this helps you. If you want the entire document that this came from, PM me and I'll send it to you.
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#204172 - 07/20/04 01:22 PM Re: aliens and social security numbers
CloudShape Offline
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It is possible that the person filing out the W-8BEN misread the instructions and listed their current address instead of their permanent address. We also ran into this recently - we contacted the branch and told them they needed to get the customer to complete the W-8BEN with his permanent address (he had the country correctly identified in Part II).

On the subject of resident aliens, if you read the instructions at the top of the W-8BEN, it states that if the individual is a US person, including a resident alien, they must sign the W-9. The reasoning behind a resident alien signing a W-9 (as near as I can figure) is that a resident alien should have a SSN or an ITIN. If they are living in the US, then they are either a) working and their employer needs the SSN or ITIN as well, or b) a dependent and the person claiming them as a dependent on their 1040 also needs a SSN or ITIN. So either way, if they are a resident alien, they should have a SSN or ITIN.

Also on the subject of non-resident aliens - the documentation gets a little trickier on joint accounts. If all owners on an account claim to be non-resident aliens, you need W-8BENs on all the owners. If even one owner is a US person (citizen, resident alien, etc.), that person's SSN or ITIN is used on the account and that person signs the W-9. Then you are no longer required to get W-8BENs on any other non-resident alien joint owners (unless you want to for your records).
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#204173 - 07/20/04 05:44 PM Re: aliens and social security numbers
Tisa Offline
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Tisa
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Quote:

Substantial presence test: You are considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the U.S. on at least:
1) 31 days during the current year, and
2) 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
a) All the days you were present in the current year, and
b) 1/3 of the days you were present last year, and
c) 1/6 of the days you were present in the year before last.




As always, there's an exception to this... (keeps the lawyers in business!)

If the individual claims a closer tie to the foreign country, they may still claim non-resident alien status even though they've been in the US for more than the prescribed number of days.

The wording from IRS Publ 519 (Aliens Guide) is: Can you show for ____ (tax year) you have a tax home in a foreign country and have a closer connection to that country than to the United States? The "closer connection" is what's not defined and up for debate...

Page 5 of the Aliens Guide has a good flow-chart to help determine if one is a Non-Resident Alien or not. We usually let the customer decide, and then make them provide the documentation to back it up.

Incidentally, with the CIP requirements now, even if the primary signer has a ss# (that we'll use for IRS reporting), we make NRA joint signers complete a W-8BEN to prove why they don't have a SS# or ITIN. Makes things a bit tricky, as the forms expire after 3+ years, and we'll have to stay on top of them to make sure they get renewed. We'll figure that out when we get there...
_________________________
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#204174 - 07/23/04 06:40 PM Re: aliens and social security numbers
Anonymous
Unregistered

With all these forms, etc., is it any wonder we can't figure out who should/should not be here, who can legally work here and who the *&**%*^*^ terrorists are?

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#204175 - 07/25/04 02:00 PM Re: aliens and social security numbers
Truffle Royale Offline

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Posts: 17,359
Is it just me or does anyone else find it absolutely amazing that the U.S. government can track a cow born in Canada almost three years ago, right to the stall where she sleeps in the State of Washington, and determine exactly what that cow ate. They can also track her calves right to their stalls, and tell you what kind of feed they ate.

But they are unable to locate 11 million illegal aliens wandering around in their country, including people that are trying to blow up important structures in the U.S.

My solution is to give every illegal alien a cow as soon as they enter the country.

Author unknown

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#204176 - 07/25/04 09:19 PM Re: aliens and social security numbers
Bear Collector, CRCM Offline
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Posts: 1,830
District of Columbia

Very funny, bjp!
Actually, one of our Systems people went to a tax seminar in Florida about a month ago. She brought back information from the IRS that states that if anyone completes a W-8 indicating that the address of permanent residence is different from the address of current residence, that we must obtain a written statement from the individual explaining why. We are currently trying to find out from the IRS if the statement has to be "written" or if we can create a form letter that can be completed by the individual. The problem we see is that a written statement in Chinese or Arabic or German is not going to do us much good, anyway!
BC
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#204177 - 07/26/04 04:58 AM Re: aliens and social security numbers
TrueBlueBanker Offline
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Joined: Jun 2004
Posts: 737
Midlands SC
THis is very simple...if you do not recognize the planet the alien is from do not open an account.

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#204178 - 07/27/04 05:30 PM Re: aliens and social security numbers
Tisa Offline
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Tisa
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Posts: 938
Do you know the way to ...
Quote:

if anyone completes a W-8 indicating that the address of permanent residence is different from the address of current residence, that we must obtain a written statement from the individual explaining why.




It's been in place since Jan 1, 2002, so you may want to go back through all your W-8's received since then... It's listed in IRS Publ 515 on page 12, middle column, starting last 2 paragraphs at the bottom.

We have a number of people who use a friend or relative's address in the US because the mail system "stinks" in their country. The friend or relative boxes up their mail periodically and sends it FedEx - which apparently is much more reliable. So we just need to get that in writing.

We've got a form letter of sorts, but it's really just "I'm a Non-Resident Alien using a US mailing address because:________" with lines for them to write their reasons, then sign and date.
_________________________
Just a lowly 1st Year Law Student ("1L"), so don't take anything I say seriously!

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#204179 - 07/28/04 11:11 PM Re: aliens and social security numbers
Banker Boy Offline
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Banker Boy
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Posts: 69
Florida
Quote:


Very funny, bjp!
Actually, one of our Systems people went to a tax seminar in Florida about a month ago. She brought back information from the IRS that states that if anyone completes a W-8 indicating that the address of permanent residence is different from the address of current residence, that we must obtain a written statement from the individual explaining why. We are currently trying to find out from the IRS if the statement has to be "written" or if we can create a form letter that can be completed by the individual. The problem we see is that a written statement in Chinese or Arabic or German is not going to do us much good, anyway!
BC




We have an "Attachment A" to our W-8's that asks this question and lists a number of possible choices such as the US address is a secondary home, they do not want to rely on a non-US postal service, etc. The client signs and dates the form and we keep it attached to the W-8.

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#204180 - 07/29/04 02:55 PM Re: aliens and social security numbers
Anonymous
Unregistered

We are in big trouble if we were supposed to be getting a written statement every time a person opened an account with a W-8BEN and filled out the form with a current address different from their permanent address. We have opened hundreds (a thousand?) of accounts with just the matricula and a signed W-8BEN. Yikes!
Since we all know 99% are illegal aliens, I'm not sure what they would be writing for their reason for why the two addresses are different. I'm concerned our employees (30% speak Spanish) will start prompting them write reasons like "the mail system stinks in my country, I'm here for better mail service....oh please).

They would really like to write the truth "I'm here to make some halfway decent dough that I can send back home to my poor family, and by the way I like it here better than at home!"

Signed,

Between a rock and a hard place.....not sure what to do........

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#204181 - 08/06/04 04:19 PM Re: aliens and social security numbers
Anonymous
Unregistered

Very scary. This is just one compliance issue our front line staff must wrestle with on a daily basis. Our procedures include much of the info listed in the P&P guidance, but even if the staff has a clear understanding, the language barrier often frustrates the situation. (I will never understand why the IRS had to step in with ITINs, which apply to both nonresident & resident aliens.) Knowing what to do is only half the battle. And, although you can refuse to open accounts if you don't feel comfortable with the information or documentation provided - be careful not to target anyone.

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