At Inversoft, I’ve been working on getting our tax exemption for various European countries. This process requires a valid 8802 be submitted to the IRS. In return, the IRS will ship you out a shiny new form 6616 that you can snail mail across the Atlantic to the country of your choice. Yes, feel the sarcasm. This process is unbelievably dated, horrific, slow, lame, tree-killing, etc.
After talking to a number of accountants, some knowledgable and many not, I finally have the form filled out correctly and I’m about to drop it in the mail. Since this process is SOOOO painful, I figured I would give other S-Corp owners a heads up to hopefully save their sanity and a bunch of time.
Here’s exactly how to fill out form 8802:
- Put your full legal company name at the top under Applicant Name
- Put your S-Corp’s FEIN under Applicant’s U.S. taxpayer identification number
- Leave Line 1 blank
- Put in your company address on Line 2. I put in the exact same address on my S-Corp’s tax return since we haven’t moved this year. I don’t know if this is required, but might as well error on the safe side.
- Put in your company address on Line 3a
- Put in your name (that is you the shareholder/CEO) in Line 3b
- Checkmark Line 4f since you are an S-Corp
- Checkmark 1120s under the Yes. heading of Line 5
- Leave Line 6 blank
- Write 2018 on Line 7
- Put the last year and month you filed a tax return for on Line 8. This is the fiscal year end. So, in my case, the last year and month (fiscal year end) I filed was December 2017, so I put in 201712 and it MUST be in this format.
- Checkmark Income Tax on Line 9
- Write this exact text in two (2) separate lines on Line 10
<Shareholder name> <Shareholder SSN> is a U.S. resident and will continue to be throughout the current tax year.
<S-Corp name> <S-Corp FEIN> has filed its required return and the entity classification has not changed since the return was filed.
- Sign, date, add your phone number, name and title to the bottom
- Put your S-Corp name at to the top of the worksheet with your FEIN
- Put the current calendar year on the worksheet (still at the top section)
- Line 11 (on the worksheet) pick the country (or countries) you need and ask for 5 forms each
- Make sure you put in the correct total on Line 12
That’s all you need for form 8802. However, since you are filling this out for an S-Corp and according to tax law and treaties, S-Corp’s can’t claim exemptions or be identified as a corporation, you need to fill out a form 8821 also. The 8821 form is an authorization made by the shareholder in an S-Corp that is certifying that the form 8802 is correct. This is part of the perjury statement.
Filling out the form 8821 is also a nightmare and the instructions suck, so here are the steps for that form as well:
- Put your personal information (since you are the shareholder) on Line 1 (i.e. I put Brian Pontarelli here with my home address) including your SSN and phone number
- Leave Line 2 blank
- Don’t checkmark the checkbox on Line 3
- Write Income on Line 3a
- Write 1040 on Line 3b
- Write 2016, 2017, 2018, 2019, 2020 on Line 3c (or whatever years you need)
- Write Form 8802 on Line 3d
- Leave Line 4 blank
- Checkmark Line 5a
- Leave Line 6 blank
- Sign, date, print your name and put your title as CEO (or whatever it is)
NOTE: I’ve heard that form 8821 might not be necessary if there is only one shareholder and they are filing form 8802. I haven’t confirmed this, but if you are worried about it, just send in a 8821 regardless.
Also, I HIGHLY advise against faxing these forms in. I faxed them in and they were rejected by the IRS because the fax was illegible. Likely, their fax machine sucked or mine did. Regardless, save yourself the headache and mail them in. Or better yet, send them UPS, Fedex or USPS certified.
That should be it. I’m sending mine off next week, so if they aren’t accepted, I’ll update this post with any fixes I made.