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US citizen 1st As Acct Holder for 1099 Purposes

I need to know what law pertains to placing a US citizen first as an account holder for 1099 purposes when they have a jointly held account with a non-resident alien who does not have a tax identification number? Can someone point me in the direction of any law that states this?

by Ken Golliher: There is no "law" that says whose name goes first in an account title. It's only an issue on interest bearing accounts for individuals where the account must be supported by either a W8-BEN or a W-9 or their equivalents.

If there are multiple owners on the account:
*all of whom are U.S. persons, you only need a W-9 from the person on whose name/TIN combination you are reporting,
If there are multiple owners on the account:
*all of whom are non U.S. persons, you need a W8-BEN from each of them.
If there are multiple owners on the account, some U.S. persons and some non U.S. persons:
*you are to treat the account as if it belonged to one of the U.S. persons, obtain his W-9 and report on his name/SSN combination.

Whenever you are reporting on the name/SSN combination of a U.S. person you put that individual's name first in the account title in a practical attempt to maximize the IRS' chance to connect the information return to the individual's income tax return.

If your bank can choose the line in the account title used for information reporting and you choose the line with the name of the U.S. person, then whose name is first in the account title is irrelevant. If your bank uses the optional "name control field" for information reporting, then you use the first 4 characters of the U.S. person's surname as the name control and whose name is first in the account title is irrelevant.

Treating the "mixed" ownership account as a non U.S. person's account would create a great "tax shelter" for the U.S. person.


by John Burnett: If you check out page 4 of the full W-9 form and look at the table there, you will see that the IRS wants the individual with an SSN to be reported with his/her SSN on any 1099, in the case of a joint account between a U.S person with an SSN and a non-U.S. person without an SSN. For many if not most banks, that means for an interest-bearing account, the U.S. person will be listed first.

First published on 01/29/2017

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