10-31-2023 03:14 AM
Urgent assistance required: An employee has Form 8233 to claim Tax Treaty Withholding Exemption as the employee resides permanently abroad and works online only (not a USA citizen nor resident).
Step by step instructions are required to add this employee to Toast Payroll. Support have suggested setting up employee as a 1099 Contractor, how would this be set up in Toast Payroll?
(Any advice will be much appreciated)
Also, if Toast Payroll is a Withholding Agent, they would have the responsibility of:
Part IVhttps://www.irs.gov/pub/irs-pdf/i8233.pdf
Withholding Agent's
Responsibilities
When the nonresident alien individual
gives you Form 8233, review it to see if
you are satisfied that the exemption from
withholding is warranted. If you are
satisfied, based on the facts presented,
complete and sign the certification in Part
IV.
You will need three copies of the
completed Form 8233. Each copy of Form
8233 must include any attachments
submitted by the nonresident alien
individual. Give one copy of the completed
Form 8233 to the nonresident alien
individual. Keep a copy for your records.
Within 5 days of your acceptance, forward
one copy to:
Department of the Treasury
Internal Revenue Service
Philadelphia, PA 19255-0725
You can also fax Form 8233 to
877-824-9781 or 267-466-1365.
You are limited to 100 pages at
one time.
The exemption from withholding is
effective for payments made retroactive to
the date of the first payment covered by
Form 8233, even though you must wait at
least 10 days after you have properly
mailed Form 8233 to the IRS to see
whether the IRS has any objections to the
Form 8233.
You must not accept Form 8233, and
you must withhold, if either of the following
applies.
• You know, or have reason to know, that
any of the facts or statements on Form
8233 may be false.
• You know, or have reason to know, that
the nonresident alien's eligibility for the
exemption from withholding cannot be
readily determined (for example, you know
the nonresident alien has a fixed base or
permanent establishment in the United
States).
If you accept Form 8233 and later find
that either of the situations described
above applies, you must promptly notify
the IRS (by writing to the address provided
earlier) and you must begin withholding on
any amounts not yet paid. Also, if you are
notified by the IRS that the nonresident
alien's eligibility for the exemption from
withholding is in doubt or that the
nonresident alien is not eligible for
exemption from withholding, you must
begin withholding immediately. See
Regulations section 1.1441-4(b)(2)(iii) for
examples illustrating these rules.
If you submit an incorrect Form 8233,
the IRS will notify you that the form
submitted is not acceptable and that you
must begin withholding immediately.
Examples of incorrect Forms 8233
include:
• Any Form 8233 that claims a tax treaty
benefit that does not exist or is obviously
false, and
• Any Form 8233 that has not been
completed in sufficient detail to allow
determination of the correctness of the tax
treaty benefit or exemption claimed.
If the IRS rejects Form 8233, you
should notify the individual who submitted
it and allow the individual to submit a
revised form if the individual still believes
he or she is entitled to the exemption.
Signature
You or your authorized agent must sign
and date Form 8233. See Regulations
section 1.1441-7(c) for information about
authorized agents.