Simplified CWA FAQs
Frequently Asked Questions about IRS Simplified Central Withholding Agreements
1. How do I apply? Where do I begin?
The first step for a designated withholding agent is to carefully review the entire list of instructions listed in form 13930-A, starting on page 4. Next, as per page 4 of the form, complete the CWA application form, declaration page, and provide a typed letter with the requested information and attachments. File Form 13930-A and accompanying documents electronically with the advance withholding payment via Pay.gov (enter the term “Form 13930- A” in the search box). The designated withholding agent must submit the completed application through Pay.gov when making the advance withholding payment. Before submitting Form 13930-A, be sure the designated withholding agent has: • established a Pay.gov account. • created a single PDF file that contains all Form 13930-A submission attachments and the required documents specified in the instructions. • notified their financial institution and put a filter on their corporate account authorizing ACH payments from Withholding Tax (entry name) 2009290004 (company ID).
2. Who can be a Designated Withholding Agent (DWA)?
A withholding agent can be a U.S. or foreign person that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding. A withholding agent may be an individual, corporation, partnership, trust, association, or any other entity, including any foreign intermediary, foreign partnership, or U.S. branch of certain foreign banks and insurance companies. The DWA must be an independent third party unrelated to the NRAAE, or entities owned by the NRAAE. The IRS interprets "an independent third party unrelated to the NRAAE" to mean any entity in which the artist does not have an ownership interest, however small. Additionally, the withholding agent must:
- Have a U.S. bank account and EIN and make any required payments through Pay.gov.
- Sign and comply with CWA terms
- Withhold and pay withholding tax required by CWA.
3. The form 13930-A link on the IRS website does not work. What should I do?
In case of difficulty accessing the 13930-A from the IRS website within your web browser, try first downloading the PDF – if the link directs you to a page that reads “Please wait…” with a message that your PDF viewer may not be able to display the document, go ahead and download that PDF as is, then open it from your desktop and the form should appear. You can also access a non-fillable version of the form here.
4. Can I apply for a CWA even though I do not have a U.S. social security number (SSN), or individual taxpayer identification number (ITIN)?
Yes. You can submit the CWA without an SSN or ITIN by marking “to be applied for” in the form. The SSN can be applied for in the U.S. while on tour. If this is not feasible, an SSN or ITIN can also be applied for in conjunction with tax returns filed in the year following the CWA.
5. While applying for the CWA, I submitted past tax returns to the IRS. Is this sufficient?
Not entirely. The IRS requires that the past tax returns not only be filed, but that they are also posted by the IRS. The latter can take some time. It is therefore advisable to submit the tax returns of past years well in advance of applying for the simplified CWA.
6. Can I file past tax returns if I don't have a U.S. social security number (SSN) or individual taxpayer identification number (ITIN)?
No. Before filing past tax returns, the NRAEE must file for and be assigned an ITIN or SSN. This adds to the length of the process of filing past tax returns.
7. Why is Form 2848, or Form 8821, required? Which form should my Designated Withholding Agent representative (Section 4) use?
Only an authorized representative may apply on behalf of the NRAAE. To prevent unauthorized disclosures, the IRS requires a Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization, to be fully executed,
The IRS may accept Form 2848 from an attorney, CPA, or enrolled agent. The authorization should cover, at a minimum, a CWA for the current year, Income Tax Form 1040NR for the present and two prior years, as well as any Form 1042-S in the taxpayer’s name for any year in question.
The IRS will also accept a Form 8821 from anyone else designated to receive tax return information. Form 8821 authorizes any individual, corporation, firm, organization, or partnership designated to inspect and/ or receive confidential information from the IRS for the type of tax and the years or periods listed on Form 8821.
8. If my representative uses Form 8821, must they have a PTIN Number, or a CAF number?
No, unless you have received a PTIN or CAF in the past.
A CAF number is a unique nine-digit identification number and is assigned the first time you file a third party authorization with IRS. A letter is sent to you informing you of your assigned CAF number. Use your assigned CAF number on all future authorizations.
A PTIN must be obtained by all enrolled agents, as well as all tax return preparers who are compensated for preparing, or assisting in the preparation of, all or substantially all of any U.S. federal tax return, claim for refund, or other tax form submitted to the IRS except the forms specifically excluded by the IRS.
9. What if I have $9,000 in total income, but $2700 is paid to the producers for performer-related expense. 10% x $9,000, or 10% x $6,700?
You need to report the gross earnings of $9,000 to the IRS. The Simplified CWA does not take expenses into account.
10. Can the IRS be contacted to answer questions?
Yes. E-mail inquiries regarding CWAs may be sent to the IRS directly at CWA.Program@irs.gov. More information about CWAs is available at the IRS website.
*Special thanks to Elizabeth Moller, counsel/legal fellow at Tamizdat, for this Simplified CWA content and FAQ.