Yesterday, March 21, 2009, the I.R.S. finally published Form 8804, Annual Return for Partnership Withholding Tax (Section 1446). Form 8804 is used by partnerships with U.S. effectively connected income that is allocable to foreign partners. Although the 2008 form is now completed, the instructions to this year’s form have not yet been released.
It is remarkable that the I.R.S. is still publishing forms for the 2008 year that are due April 15, 2009. If a tax preparer uses software to complete Form 8804, he/she must now wait until the software provider updates its software to include the new form. Presumably, updating the form should not take much time, given that there were no law changes this year related to the form and it is virtually identical to last year’s form. Of course, this brings up the question as to why it took the I.R.S. so long to change the “2007” at the top of the form to “2008.”
On March 18, 2009, the I.R.S. also updated Form 8805, Foreign Partner’s Information Statement of Section 1446 Withholding Tax. Form 8805 is filed separately for each foreign partner, and if taxes have been withheld, the foreign partner must attach a copy of the Form 8805 to their U.S. income tax return to claim credit for the taxes paid on their behalf.
It is possible to extend the filing date for Forms 8804 and 8805. However, it is astounding that the I.R.S. has delayed the publishing of these forms until less than one month before their due date.