Regulatory Updates

IRS Posts 2022 Instructions for Form 1042-S

The IRS has posted the 2022 tax year detailed Instructions for Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding. Form 1042-S is commonly used when potentially taxable distributions are made to non-U.S. citizens from certain accounts, including IRAs. Unlike distributions paid to U.S. citizens within the U.S., non-citizens generally cannot waive tax withholding. But, by providing the payor organization with Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individual), foreign recipients can generally avoid otherwise-mandatory 30 percent withholding.

By doing so, they may instead have withholding applied at a rate determined by a tax treaty—if there is one—between their home country and the U.S. Withholding and related information about the recipient is then reported to the IRS on Form 1042-S.

The 2022 instructions will be reviewed for any changes of significance from the 2021 version. Findings will be shared as appropriate.

Regulatory Updates

Proposed Enhanced Disclosures About ESG Investment Practices

Proposed Enhanced Disclosures About ESG Investment Practices

The SEC has issued a proposed rule that would add reporting requirements for registered investment advisors, registered investment companies, certain advisers that are exempt from registration, and business development companies.