Rev. Rul. 65-86

Advice has been requested whether an alien individual employed by a foreign government at its consulate in the United States is required to obtain and furnish an identifying number to a bank located in the United States making payment to the alien of interest on his savings account therein, upon request by the bank that he furnish the number.

Section 6109(a)(3) of the Internal Revenue Code of 1954 provides that `Any person required * * * to make a return, statement, or other document with respect to another person shall request from such other person, and shall include in any such return, statement, or other document, such identifying number as may be prescribed for securing proper identification of such other person.' Section 6109(a)(2) of the Code provides that `Any person with respect to whom a return, statement or other document is required * * * to be made by another person shall furnish to such other person such identifying number as may be prescribed for securing his proper identification.

Example (5) of section 1.6109-1(b)(2) of the Income Tax Regulations under section 6109 of the Code makes it clear that for the purposes of that section, the term `person' includes a corporation. It follows that if a bank or other organization making a payment of interest to an individual is required to make a return, statement, or other document with respect to the individual to whom the payment is made, it must request, and that individual must furnish, an identifying number, unless some other section of the Code or regulations prescribes otherwise.

Section 6049 of the Code provides, in general, for the filing of information returns (on Forms 1096, U.S. Annual Information Return, and 1099, U.S. Information Return for Calendar Year) by the payers of interest, such as banks, making interest payments aggregating $10 or more to any other person during the calendar year. The term `interest' as used in section 6049 of the Code, however, does not include payments subject to the withholding of tax under section 1441 of the Code. See section 1.6049-2(b)(3) of the regulations. Therefore, no Form 1096 or Form 1099 need be filed with respect to interest payments subject to withholding of tax under section 1441 of the Code.

Withholding of tax is required under section 1441 of the Code from payments of interest made by a bank to a nonresident alien if the payee is engaged in trade or business in the United States. Under the provisions of section 1461 of the Code every bank required to deduct and withhold any tax under section 1441 of the Code must file information returns (on Forms 1042, U.S. Annual Return of Income Tax to be Paid at Source, and 1042S, U.S. Annual Information Statement of Income Paid to Nonresident Aliens, etc.) with respect to the tax withheld. Thus, section 6049 of the Code requires the filing of returns with respect to alien residents of the United States and section 1461 of the Code requires the filing of returns with respect to nonresident aliens.

Section 1.6109-1(d) of the regulations provides, in effect, that the requirement of obtaining an identifying number in accordance with section 6109 of the Code does not apply to nonresident aliens not engaged in trade or business within the United States.

However, under the provisions of section 871(c) of the Code, the term `engaged in trade or business within the United States' includes the performance of personal services within the United States at any time within the taxable year. Consequently, since an employee of a foreign government who is an alien performing services within the United States is considered to be engaged in trade or business within the United States, he is required, by the provisions of section 6109 of the Code, to obtain and furnish an identifying number to a bank located in the United States making payment to the alien of interest on his savings account therein, upon request by the bank that he furnish the number.