[ANGERMANN]

I have a German girlfriend, whose deceased husband was a US citizen. She receives monthly checks from his life insurance policy. Starting in January she was deducted 30% because she didn't have an ITIN number. There is a fully staffed IRS office in Frankfurt, Germany. Do you know whether they can issue her an ITIN number?
Thanks for your help,
Sue

[JudyKayTee]

The form is available on line - ITIN Number - Individual Taxpayer Identification Number

[AtlantaTaxExpert]

Sue:

The insurance company is withholding the 30% for income taxes, but they are NOT doing it because your friend lacks an ITIN.

They are doing it because your friend failed to complete a Form W-8BEN and send the completed (and signed) Form W-8BEN citing the appropriate article in the Germany-U.S. Tax Treaty that tells the insurance company that the payments are NOT subject to U.S. income taxes. The insurance company is required to maintain the Form W-8BEN on file and show it to the IRS on request to justify WHY they are not withholding 30% of the payment. Without the Form W-8BEN, the insurance compnay, by law, MUST withhold 30% of each monthly payment.

If she sends them a properly-completed Form W-8BEN, she may get the withheld taxes back and NOT have to file a tax return (and apply for an ITIN) next year to get her money back from the IRS. It depends on HOW LONG the withholding have been done.

If she needs professional help completing the Form W-8BEN, I can help her with that for a small fee. Have her contact me at [email protected] or [email protected].

If she needs to file Form 1040NR with Form W-7 to get an ITIN and request a refund of the withheld 30%, I can help her with that as well.

[ANGERMANN]

Thank you so much for your help.

[ANGERMANN]

The taxes have been withheld since January of this year. After a couple of inquiries John Hancock sent her a W-7 and W-8 with the following instructions.

Enclosed please find a new W8BEN form to be completed. This form must be completed in its ENTIRETY, as well as line 6 must be correctly completed every 3 years, in order to be eligible for the foreign tax exemption. Under IRS regulations, if this information is not correct the foreign tax rate is 30%.
If you do not have a valid Social Security Number or ITIN, you must apply for one with the IRS using form W-7. The completed W-7 form must be sent directly to the IRS for processing. Once you have been assigned an ITIN number you can complete the W-8BEN and return it to our office.

My friend has tried to get an appointment with the Frankfurt tax office, but as yet has not been able to get through to them.
My friend lives on a fixed income, and I sincerely appreciate your help in this matter.

Sue

[AtlantaTaxExpert]

Send me an email and I will quote a fee.