I am trying to decide what to require my bank to do. We don't have any policies or procedures on this yet, and before I write them, I'd like to know what you all are doing.

We have a handful of non-resident aliens (NRA's) in our customer base, but not all have interest-bearing accounts. By law, we only need a W8 if the NRA opens an interest account, but are you all requiring a W8 even if the NRA is opening a non-interest account? The only benefit I see here is you already have the W8 on file if the NRA decides to open an interest account later.

Please take my poll and if you have any, give me your comments/thoughts.

Thanks!

I changed our policy a couple of years ago te require a W8 for both interest bearing and non-interest bearing accounts. It has nade it mutch easier for the new accounts people. They could never seem to remember whether it was needed for interest bearing or non-interest bearing accounts. As a result we often did not have a W8 when we needed one.

They ave done much better since we changed and they get a W8 from all NRA's.

Almost the same here for us. It was easier on our CSRs to just require it everytime than making different rules that they had to remember. The more they have to remember the more room there is for error. And I always sell it to the CSR, explaining that I don't want to make their job more complicated so I am keeping it as simple as I can for them, their jobs are so complicated as it is and there is so much to remember.

We always feel that its a good idea to cover your assets (CYA) as far as certifications go whether NRA, Resident, or Citizen. We always obtain either a W9 or a W8-BEN.

Ditto.

The W-8ben have to be up-dated every 3 years. Does that include the W-8ben's that have a tax ID number listed on the form?

We get W8s for all non-residents as a way to keep up with customer due diligence. Plus, like everyone else, it does make it easier for the CSRs. But, like Kira said if they have an ITIN, it gets complicated! If the NRA supplies an ITIN, they are permanently exempt unless the bank becomes aware of a change in status (i.e. address change).

We are now monitoring for address changes on NRA customers with ITINs causing the W8 to expire the same year so they will get the renewal notice.

Also, I can see it coming, that eventually banks are going to have to monitor for the "substantial presence test" and are going to have to take action if they believe that a "non-resident alien" no longer qualifies to be treated as a "non-resident alien". I see many banks continue to obtain W-8's from individuals that have been in the states for years.

You will be 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 United States on at least:

31 days during the current year, and

183 days during the 3-year period that includes the current year

and the 2 years immediately before that, counting:

All the days you were present in the current year, and

1/3 of the days you were present in the first year before the current year, and

1/6 of the days you were present in the second year before the current year.

Agreed. It can get out of hand if you let it. We decided not to go down that road until the IRS actually did an audit or our examiner felt we needed to take a closer look. IRS audits on W-8s are not common and examiners are only looking to see if we are complying with the basics of W-8 rules--get them or withhold. .

Could someone share to what extent you are going when opening an account for a non-resident alien? Do you have any procedures for non-resident aliens who open an account? What document do you require?

e.g. Passport, green card, I-94 card, visa card,

We have some that are classified as non-resident aliens, but have a local address, NO social security number (we are tracking for W-8BEN), and have had an account since 1999. At what point are we required to get a social security number? Does it matter to us if they have a local address, but state they a non-resident aliens?

if the nra provides a US address either on the w8 or in their accoutn information (in your cif system), you must get proof of their foreign status which also shows a foreign address as well as a written statement from the nra indicating the reason they are providing a us address (student, visiting family, doign research, etc). this comes directly from irs rules (irs regulation sections 1.6049-5(c)(3) and 1.1441-7(b)(3)-(5), also see irs publication 515).

Lsmith,
We thought about that, and decided our heads hurt a lot over something no bank we are friendly with has ever been audited for. We are still trying to hammer out P & P with bank operations, but we will never go down the substantial presence test road with our long term NRAs unless an examiner or someone from customer due diligence raises the red flag.

We will accept the Matricula Consular Card when accompanied by a primary source of ID like a driver's license or passport with valid Visa/I-94.

"we will never go down the substantial presence test road with our long term NRAs unless an examiner or someone from customer due diligence raises the red flag."

You won't have to wait long. From the BSA/AML Examination Manual:

Page 257 - NRA Overview:

For definitional purposes, an NRA is a non-U.S. citizen who: (i) is not a lawful permanent resident of the United States during the calendar year and who does not meet the substantial presence test, or (ii) has not been issued an alien registration receipt card, also known as a green card.

Page 260 - Exam Procedures:

For W-8 accounts, verify that appropriate forms have been completed and updated, as necessary. Review transaction activity and identify patterns that indicate U.S. resident status or indicate other unusual and suspicious activity.

I have already run into examiners that are taking this examination procedure seriously and it is not pretty.

I have been to the woodshed with this issue with the examiners. My recommendation to all BOLers is Do Not Get W-8BENs When They Are Not Needed (i.e, non-interest-bearing accounts). You are asking for trouble and potentially a big debate/big stress with the examiners at some future exam- depends if the examiner has this issue on their radar screen (see substantial presence test discussion above). Or, another way to approach it is, Do Not open an interest bearing account without a TIN (thus no requirement for a W-8BEN). We haven't opened an account that requires a W-8BEN in almost a year. If you can't produce a TIN (and you are a non-U.S. person) your only option is a non-interest bearing DDA.

Good luck.