Answer by Randy Carey: What do they need a SSN or ITIN for? Upon proper identification, you cut them a cashier's check.
Answer by Ken Golliher: If the accrued interest paid after the DOD did not exeed $10 per beneficiary you would not have a responsibility to file a 1099INT. If if did, you would impose backup withholding on the entire amount. In order to have the amount withheld returned to them the beneficiaries would have to file a U.S. return.
Answer by Randy Carey: Could they not just give you a W-8BEN? You don't have to have a SSN/ITIN to complete one of those and avoid backup withholding..
Answer by Ken Golliher: That would work.
First published on BankersOnline.com 3/11/13