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End of Course 2 Quiz

Operational: Practical Implementation End of Course 2 Quiz

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123

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Review
Answered
Correct
Incorrect

Question 1 of 123

1. Question
What does the acronym FDAP mean for purposes of chapter 3?
- Incorrect. FDAP refers to certain types of payments under chapter 3.
- Correct. The rules under chapter 3 apply specifically to U.S. source fixed, determinable annual, or periodical income, paid to non-U.S. persons. We also refer to this as U.S. source FDAP income or an amount subject to chapter 3 withholding.
- Incorrect. FDAP refers to certain types of payments under chapter 3.
- Incorrect. Only one of the answers tells us what the acronym for FDAP means for purposes of chapter 3.
Correct

Incorrect
Question 2 of 123

2. Question
Which of the following is not a fact about banks?
- Banks can be organized inside or outside of the United States
- Banks can have branches.
- Banks are heavily regulated by local governments.
- Banks only have indirect account holders
Correct

Incorrect
Question 3 of 123

3. Question
True or False. Banks and brokers make similar types of payments.
- True.
- False.
Correct

Incorrect
Question 4 of 123

4. Question
What types of income might a mutual fund have to report to its investors?
- Dividends
- Interest
- Capital Gains
- All of the above
Correct

Incorrect
Question 5 of 123

5. Question
True or False: In this example, Investor 2 is an indirect investor.
- True.
- False.
Correct

Incorrect
Question 6 of 123

6. Question
Which organization is a nonfinancial services organization?
- A brokerage firm
- A bank
- An investment house
- A shipping company
Correct

Incorrect
Question 7 of 123

7. Question
What is one of the questions we need to think about when we are identifying the payee or beneficial owner?
- Is the payee or beneficial owner a U.S. or non U.S. person?
- Does the payee or beneficial owner live on a farm?
- How fast does the payee or beneficial owner run?
- If the payee or beneficial owner is an entity, does it have an office in a skyscraper?
Correct

Incorrect
Question 8 of 123

8. Question
How do we source personal services income?
- Based on whether the person paying for the services is a U.S. person.
- Based on whether the person paying for the services is a bank.
- Based on whether the services were performed as expected.
- Based on where the services were performed.
Correct

Incorrect
Question 9 of 123

9. Question
True or False. U.S. law treats U.S. persons and non-U.S. persons differently for U.S. tax purposes.
- True.
- False.
Correct

Incorrect
Question 10 of 123

10. Question
What is the name of the test that helps determine whether a person is a U.S. person?
- Yellow card test.
- Green card test.
- The industry test.
- The eligibility test
Correct

Incorrect
Question 11 of 123

11. Question
Select the correct calculation for determining the substantial presence test for the year 2025.
- Add all of the days present in the United States in 2025, 1/3 of the days present in the United States in 2024, and 1/6 of the days present in the United States in 2023.
- Multiply all of the days in 2025 by 1/3 of the days in 2023, and none of the days in 2020.
- Add all of the days present in the United States in 2025 with 1/3 of the days present in the United States in 2024, and subtract 1/6 of the days present in the United States in 2023.
- Divide all of the days present in the United States in 2025 by 3, all of the days present in the United States in 2024 by 6, and add them together.
Correct

Incorrect
Question 12 of 123

12. Question
What is an example of when backup withholding may apply to a payment?
- When a U.S. person has not provided a taxpayer identification number or TIN in the manner required.
- When a payment is for nonemployee compensation.
- When a payee is a director
- When a payee provides a reliable Form W-8 and certifies that he or she is a non-U.S. person
Correct

Incorrect
Question 13 of 123

13. Question
True or False: Rental payments are sourced based on where the rental property is located.
- Correct. This is a true statement. Rental payments are sourced based on where the rental property is located.
- Incorrect. The statement is not false. Generally, rental payments are sourced based on where the rental property is located.
Correct

Incorrect
Question 14 of 123

14. Question
A disregarded entity that is eligible for treaty benefits in a jurisdiction outside of the United States, where it is treated as a regarded entity, should complete which form?
- Form W-9
- Form W-8BEN-E
- Form 1099
- None of the above.
Correct

Incorrect
Question 15 of 123

15. Question
True or False. Banks, brokers, and insurance companies likely are impacted by chapter 4 and the Common Reporting Standard or the CRS.
- True.
- False.
Correct

Incorrect
Question 16 of 123

16. Question
Which is a type of non-U.S. person?
- A corporation organized in the United States that is not a branch.
- A resident of the Netherlands who lives for 6 months of each year in the United States.
- A corporation organized in the United Kingdom that is not a branch.
- None of the above.
Correct

Incorrect
Question 17 of 123

17. Question
Which of the following is not a type of U.S. taxpayer identification number?
- Employer Identification Number or EIN
- Title 26
- Social Security Number or SSN
- Individual Taxpayer Identification Number or ITIN
Correct

Incorrect
Question 18 of 123

18. Question
True or False. Withholding agents and payors do not need to cross reference the information on Form W-9 with their books and records.
- True.
- False.
Correct

Incorrect
Question 19 of 123

19. Question
Which of the following is one of the U.S. federal tax classifications available on Line 3 of the Form W-9?
- Non-U.S. Person
- Intermediary
- FATCA Compliant
- Corporation
Correct

Incorrect
Question 20 of 123

20. Question
When must a withholding agent or payor apply presumption rules?
- It does not apply these rules ever.
- At formation when it elects a U.S. federal tax classification.
- When it makes a U.S. reportable payment to certain persons that do not provide a reliable Form W-9 at or by the time of payment
- When it enters into an agreement with another country.
Correct

Incorrect
Question 21 of 123

21. Question
True or False. Withholding agents and payors do not need to cross reference the information on Form W-9 with their books and records.
- True.
- False.
Correct

Incorrect
Question 22 of 123

22. Question
Why do non-U.S. individuals or humans provide a Form W-8BEN to a withholding agent?
- To establish their non-U.S. status for purposes of chapter 3
- To establish their U.S. status for purposes of chapter 61
- Non U.S. individuals or humans do not provide a Form W-8BEN.
- To establish their U.S. status for purposes of chapter 4.
Correct

Incorrect
Question 23 of 123

23. Question
Which of the following would be required on a Form W-8BEN?
- A mailing address, where an individual or human does not have a separate mailing address.
- An FTIN, where the individual or human resides in a country that does not issue a TIN.
- A treaty claim in Part II, where the individual or human is not making a treaty claim.
- A name on Line 1, identifying the beneficial owner.
Correct

Incorrect
Question 24 of 123

24. Question
For purposes of Form W-8BEN, what is a ‘change in circumstances?’
- A change in circumstances is when a beneficial owner changes his or her mind about an investment.
- A change in circumstances is when the IRS publishes a new revision of Form W-8BEN.
- A change in circumstances is not relevant for purposes of analyzing a Form W-8BEN.
- A change in circumstances is the type of change that impacts the certification of the individual on Form W-8BEN.
Correct

Incorrect
Question 25 of 123

25. Question
If a person includes a U.S. mailing address on Form W-8BEN, then what would it also have to provide to a withholding agent to cure the U.S. mailing address?
- Additional documentation in the form of a passport or government issued identification.
- Nothing. There is no need to cure a U.S. mailing address on Form W-8BEN.
- Another Form W-8BEN with the same information.
- Additional documentation in the form of Articles of incorporation.
Correct

Incorrect
Question 26 of 123

26. Question
Which of the following is not a reason that a non-U.S. individual would use a Form W-8BEN?
- For an individual or human to establish that he or she is not a U.S. person.
- For the non-U.S. individual to claim that he or she is the beneficial owner of the income for which he or she is providing this form.
- For non-U.S. individuals who are resident in treaty countries to request a lower rate of withholding pursuant to an Income Tax Treaty between his or her residence country and the United States.
- For entities to establish that they are not U.S. persons.
Correct

Incorrect
Question 27 of 123

27. Question
Generally, how many chapter 4 status types should a beneficial owner check on Line 5 of Form W-8BEN-E?
- As many as necessary
- One, and only one
- One, but two if both seem to make sense
- Two
Correct

Incorrect
Question 28 of 123

28. Question
Form W-8BEN-E is for ___________ to certify status as a non-U.S. persons that are beneficial owners of certain income.
- Individuals or humans
- Exempt entities
- U.S. persons
- Certain entities
Correct

Incorrect
Question 29 of 123

29. Question
On Form W-8BEN-E, there is a line for LOB provisions. What does LOB mean?
- Line of Business
- Limitation on Benefits
- Link of Beneficial Owner
- None of the above
Correct

Incorrect
Question 30 of 123

30. Question
Where is the best place to find the most recent revision of Form W-8BEN-E?
- On the IRS.gov website
- Online search engine.
- At the library
- All of the above.
Correct

Incorrect
Question 31 of 123

31. Question
What type of additional documentation would be appropriate to substantiate a treaty claim on Form W-8BEN-E when a person resides in a treaty country but uses a mailing address in a different country?
- No documentation would be able to substantiate this treaty claim.
- A passport
- A recent utility bill, bank statement, or tax statement that was mailed to the entity at the address in the treaty country or a letter explaining this discrepancy.
- Articles of Incorporation
Correct

Incorrect
Question 32 of 123

32. Question
Upon completing a Form W-8BEN-E, where should the beneficial owner send it?
- To the IRS
- To the Treasury Department
- To the payor, withholding agent, or person who requested the Form W-8BEN-E.
- To the President of the United States
Correct

Incorrect
Question 33 of 123

33. Question
Certification of which status consumes most of the pages and parts on Form W-8BEN-E?
- Chapter 3 Status
- U.S. Status
- Chapter 4 Status
- Treaty Status
Correct

Incorrect
Question 34 of 123

34. Question
What types of Nonfinancial Foreign Entities or NFFEs are able to certify s tatus as such and as a beneficial owner on Form W-8BEN-E?
- Active NFFE
- Passive NFFE
- Direct Reporting NFFE
- All of the above.
Correct

Incorrect
Question 35 of 123

35. Question
What makes Form W-8ECI unlike Forms W-8BEN and BEN-E?
- Unlike Forms W-8BEN and BEN-E, both individuals and entities can use the ECI to certify status.
- Unlike Forms W-8BEN and BEN-E, only corporations can use Form W-8ECI.
- Unlike Forms W-8BEN and BEN-E, U.S. persons complete Form W-8ECI.
- There is no difference between Forms W-8BEN, BEN-E, and ECI.
Correct

Incorrect
Question 36 of 123

36. Question
Which beneficial owners will have to sign Forms W-8ECI?
- Individuals
- Entities
- Signatures are not required
- A and B
Correct

Incorrect
Question 37 of 123

37. Question
On a Form W-8ECI, is a beneficial owner required to enter information regarding items of income that are effectively connected with the conduct of a trade or business in the United States?
- Yes.
- No
- Sometimes
- Only if the beneficial owner is a corporation.
Correct

Incorrect
Question 38 of 123

38. Question
Is a beneficial owner required to enter information regarding items of income that are effectively connected with the conduct of a trade or business in the United States?
- Yes.
- No.
- Sometimes.
- Only if the beneficial owner is a corporation.
Correct

Incorrect
Question 39 of 123

39. Question
Why would exempt entities provide a Form W-8EXP to a withholding agent?
- To establish that it is not a U.S. person.
- To establish that it is the beneficial owner of the income.
- To claim a reduced rate of, or exemption from withholding as an exempt entity.
- All of the above.
Correct

Incorrect
Question 40 of 123

40. Question
What is the full title of Form W-8EXP?
- Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding and Reporting
- Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States.
- Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting – Entities
- Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual
Correct

Incorrect
Question 41 of 123

41. Question
Which of the following is not a certification that an entity will sign under penalty of perjury on Form W-8EXP?
- The organization is the beneficial owner of the income and other payments to which the Form W-8EXP relates.
- The beneficial owner is not a U.S. person.
- The beneficial owner is a U.S. person
- For a beneficial owner that is a central bank of issue wholly owned by a non-U.S. sovereign, the beneficial owner is not engaged in commercial activities within the United States.
Correct

Incorrect
Question 42 of 123

42. Question
Generally, are governments of a possession of the United States generally exempt from U.S. federal income tax and withholding?
- Yes, generally they are exempt from withholding under section 115(2) of the code.
- No, generally they are not exempt from U.S. federal income tax and withholding.
- Yes, all government entities are exempt from everything in general.
- None of the above.
Correct

Incorrect
Question 43 of 123

43. Question
Which of the following is not an International Organization?
- The North Atlantic Treaty Organization (NATO)
- The United Nations (UN)
- The Salvation Army
- The World Health Organization (WHO)
Correct

Incorrect
Question 44 of 123

44. Question
Which of the following is found on Forms W-8EXP, W-8BEN-E, and W-8BEN?
- Permanent Residence Address
- Qualification Statement for Chapter 4 Purposes
- Claim of Tax Treaty Benefits
- Qualified Intermediary Certifications
Correct

Incorrect
Question 45 of 123

45. Question
Where would an entity find the full title on Form W-8EXP?
- Top center of the first page
- Under Part IV on the last page
- Typed vertically down the sides of each page
- In the response to the line used for entity classification
Correct

Incorrect
Question 46 of 123

46. Question
Which of the following is not a checkbox for type of entity on Form W-8EXP?
- International Organization
- Foreign Private Foundation
- Foreign Government
- Partnerships
Correct

Incorrect
Question 47 of 123

47. Question
Which of the following is not a Part on Form W-8IMY?
- Certification
- Qualified Intermediary
- Treaty benefits
- Identification of Entity
Correct

Incorrect
Question 48 of 123

48. Question
What type of TIN will an QI have to provide on Form W-8IMY?
- QI-EIN
- QI-Number
- WT-EIN
- EIN
Correct

Incorrect
Question 49 of 123

49. Question
When an intermediary signs Form W-8IMY under penalties of perjury, does the withholding statement also become part of the signature under penalties or perjury?
- No.
- Only if the intermediary approves of this process.
- Yes.
- None of the above
Correct

Incorrect
Question 50 of 123

50. Question
Which of the following is a ‘good’ FFI?
- Participating FFI
- Model 1 FFI
- Model 2 FFI
- All of the above
Correct

Incorrect
Question 51 of 123

51. Question
By signing Form W-8IMY the authorized representative, officer, or agent also agrees to provide a new form within how many days following a change in circumstances (unless no future payments will be made to the intermediary or flow-through entity by the withholding agent and the requestor does not need an updated form for chapter 4 purposes)?
- There is no requirement to do this.
- 1 year
- 30 days
- A reasonable amount of time.
Correct

Incorrect
Question 52 of 123

52. Question
What does IMY mean in the form title Form W-8IMY?
- International
- Intermediary
- Identifying
- Immediate
Correct

Incorrect
Question 53 of 123

53. Question
What is the full title of Form W-8IMY?
- Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States.
- Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting – Entities
- Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual
- Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting
Correct

Incorrect
Question 54 of 123

54. Question
Why do intermediaries and flow-through entities provide Forms W-8 to withholding agents and payors?
- To document themselves as intermediaries and flow-through entities for purposes of chapter 3 and to provide a chapter 4 status.
- To document themselves as the ultimate beneficial owner of the income.
- To document themselves as exempt entities.
- To document themselves as non-U.S. individuals and beneficial owners of the income.
Correct

Incorrect
Question 55 of 123

55. Question
Which of the following are treated as recipients and do not have to provide underlying beneficial owner withholding certificates or other information relevant for purposes of completing U.S. information reporting and withholding obligations?
- Qualified Intermediaries
- Nonwithholding Foreign Partnerships
- Nonwithholding Foreign Trusts
- Nonqualified Intermediaries
Correct

Incorrect
Question 56 of 123

56. Question
Which of the following is an example of persons that would use Form 8233.
- Non-U.S. entities claiming a reduced rate of withholding pursuant to a treaty article for certain interest or dividends.
- Non-U.S. individuals or humans claiming a reduced rate of withholding pursuant to a treaty article for certain personal services income.
- Non-U.S. individuals or humans claiming a reduced rate of withholding pursuant to a treaty article for certain interest or dividends.
- All of the above
Correct

Incorrect
Question 57 of 123

57. Question
Generally, what causes personal services income to be treated as U.S. source income?
- Performing those services inside of the United States.
- Performing those services outside of the United States
- Performing services both inside and outside of the United States.
- None of the above.
Correct

Incorrect
Question 58 of 123

58. Question
To which of the following will the beneficial owner of Form 8233 certify when he or she signs the form?
- That he or she is the beneficial owner of all the income to which the form relates.
- That the he or she is not a U.S. person.
- That he or she is a resident of the treaty country listed on Form 8233 within the meaning of the income tax treaty between the United Sates and that country, or was a resident of that country listed at the time of, or immediately prior to, entry into the United States as required by the treaty.
- All of the above
Correct

Incorrect
Question 59 of 123

59. Question
What are some examples of personal dependent services that would be considred detailed enough to provide the reviewer with enough information to understand the nature of the dependent personal services?
- "Part time library assistant"
- "Teaching at ABC University"
- "Neurosurgical residency at ABC Hospital"
- All of the above
Correct

Incorrect
Question 60 of 123

60. Question
For which of the following must individuals or humans complete a separate Form 8233?
- Individuals must complete a separate Form 8233 for each tax year
- Individuals must complete a separate Form 8233 for each withholding agent
- Individuals must complete a separate Form 8233 for each type of income
- All of the above
Correct

Incorrect
Question 61 of 123

61. Question
In very general terms, what is the definition of withholding?
- Reporting on Form 1099
- Chapter 61
- The transfer of something in exchange for something else
- When an amount is held back or taken from a payment and remitted to the IRS as payment for a tax liability.
Correct

Incorrect
Question 62 of 123

62. Question
Generally, to which types of income does backup withholding apply under section 3406?
- Interest
- Dividends
- Rents
- All of the above
Correct

Incorrect
Question 63 of 123

63. Question
Which of the following would require a payor to backup withhold on reportable payments to a payee?
- The IRS notifies the payor that the TIN furnished by the payee is incorrect.
- The IRS notifies the payor that the TIN furnished by the payor on its own behalf is incorrect.
- The IRS notifies the payor that the payment should be in USD
- None of the above
Correct

Incorrect
Question 64 of 123

64. Question
Which of the following explains when an amount is considered to be paid for purposes of applying backup withholding?
- When an amount is posted to an account, even if it is not yet made available to the payee.
- When an amount is posted to an account, even if it is not yet credited to the payee.
- When the amount is credited to the account of the payee or it Is made available to the payee.
- When the payee receives an account statement in the mail, even though the amount is not yet made available to or credited to the payee.
Correct

Incorrect
Question 65 of 123

65. Question
Which of the following statements is true about a withholding agent?
- A withholding agent is still a withholding agent even if it does not have anything to withhold under chapter 3
- If a withholding agent does not have anything to withhold under chapter 3, then it is not a withholidng agent.
- There can be only one withholding agent for a single payment.
- If there are more than one withholding agent for one single payment, then each withholding agent must withhold the full tax three times.
Correct

Incorrect
Question 66 of 123

66. Question
Which of the following are NOT types of FDAP income.
- Pensions and annuities
- Rents
- Publication rights, royalties, and sales commissions
- None of the above
Correct

Incorrect
Question 67 of 123

67. Question
So long as a lower rate of withholding does not apply, generally, what is the chapter 3 withholding rate?
- 0 percent
- 20 percent
- 30 percent
- 40 percent
Correct

Incorrect
Question 68 of 123

68. Question
Which of the following reduced rates of withholding are available under chapter 4?
- Portfolio interest exemption
- Bank deposit interest exemption
- Treaty rates
- None of the above
Correct

Incorrect
Question 69 of 123

69. Question
Which of the following describes a business day?
- Monday, Wednesday, and Friday of each week
- Any working day from 9am until 5pm EST
- Monday, Tuesday, Wednesday, Thursday, Friday, so long as none of those days are a legal holiday in the District of Columbia.
- Every day of the week.
Correct

Incorrect
Question 70 of 123

70. Question
Which of the following can be traits of a withholding agent?
- U.S. or non-U.S. person
- A person with control, receipt, custody, disposal, or payment of an amount subject to chapter 3 withholding.
- A and B
- Neither A nor B
Correct

Incorrect
Question 71 of 123

71. Question
Which of the following are types of information reporting penalties?
- Failure to name a designated withholding agent
- Failure to make a deposit on time
- Failure to sign a Form W-8 under penalty of perjury
- Failure to hire a CPA
Correct

Incorrect
Question 72 of 123

72. Question
Form 1099 reporting is governed generally by which chapter in the Internal Revenue Code
- Chapter 3
- Chapter 4
- Chapter 61
- None of the above
Correct

Incorrect
Question 73 of 123

73. Question
How many types of income can a payor or withholding agent report on one single Form 1042-S?
- 1
- 2
- 3
- 4
Correct

Incorrect
Question 74 of 123

74. Question
Which of the following does not describe the term U.S. payor?
- A U.S. payor is a U.S. person, of course. We have learned that a U.S. person is a U.S. citizen or resident, a U.S. partnership, a U.S. corporation, a U.S. estate, and any U.S. trust.
- A U.S. payor is also a government of the United States or the government of any State or political subdivision of each.
- A U.S. payor is also a controlled non-U.S. corporation. What is that? A controlled non-U.S. or foreign corporation is sometimes referred to as a CFC. This means the non-U.S. corporation is more than 50 percent owned by U.S. persons – whether that be by way of a total combined voting power of all the classes of the corporation entitled to vote or the total value of the stock in the corporation.
- None of the above
Correct

Incorrect
Question 75 of 123

75. Question
Which of the following details are required are Form 1099?
- Name of payee or recipient
- TIN
- Address of payee or recipient
- All of the above
Correct

Incorrect
Question 76 of 123

76. Question
Which of the following is a tax return that is filed with the IRS only?
- Form 1099-K
- Form 1099-INT
- Form 1042
- Form 1042-S
Correct

Incorrect
Question 77 of 123

77. Question
Which of the following is a way for payors to abate IRS filing penalties?
- Send an apology to the IRS
- Demonstrate that the error was an inconsequential error
- Deny that it happened
- Send an apology to the recipients
Correct

Incorrect
Question 78 of 123

78. Question
Which of the following is not a type of FFI?
- Participating FFI
- Model 1 FFI
- Model 3 FFI
- Nonparticipating FFI
Correct

Incorrect
Question 79 of 123

79. Question
The Common Reporting Standard, or the CRS, is governed by what rules?
- Rules set forth by chapter 4 of the IRC or the FATCA rules
- Rules set forth by chapter 3 of the IRC or the nonresident alien withholding and reporting rules.
- Rules set forth by chapter 61 of the IRC
- Rules set forth by the Organization for Economic Cooperation and Development., or the OECD.
Correct

Incorrect
Question 80 of 123

80. Question
Forms 1099 generally include two addresses from which of the following persons?
- Payor
- Payee or recipient
- The IRS
- Payors and payees or recipients
Correct

Incorrect
Question 81 of 123

81. Question
What is the threshold for reporting rents on Form 1099-MISC?
- $0
- $10
- $600
- $999
Correct

Incorrect
Question 82 of 123

82. Question
What would a payor enter in the Other Income box on Form 1099?
- Any other income that is not reportable in any other box on the form.
- Any interest that is not reportable in any other box on the form.
- Any dividend that is not reportable in any other box on the form.
- Any income from the sale of goods that is not reportable in any other box on the form.
Correct

Incorrect
Question 83 of 123

83. Question
Why would payors use the boxes on Form 1099-DIV related to State reporting?
- When they participate in the Combined Federal/State Filing Program.
- When the payor resides in a certain state.
- When they make payments to individuals residing in certain States.
- Payors would never use these boxes.
Correct

Incorrect
Question 84 of 123

84. Question
Which of the following is not a situation where a withholding agent would have to file Form 1042?
- Where a withholding agents is required to file Forms 1042-S for purposes of either chapter 3 or 4, regardless of whether or not tax was withheld or required to be withheld from those payments.
- Where a withholding agent must file Forms 1042 to report a recipient tax withheld by its withholding agent.
- Where a withholding agent pays gross investment income to a non-U.S. private foundation that is subject to tax under section 4948(a).
- None of the above
Correct

Incorrect
Question 85 of 123

85. Question
What would you expect to see at the top left of Form 1042?
- The signature line
- The amount of taxes paid
- The calendar year to which the form relates
- The name of the form
Correct

Incorrect
Question 86 of 123

86. Question
Does a withholding agent have to enter its chapter 3 status code on Form 1042?
- Yes, it is mandatory
- Yes, but only in certain circumstances
- No, never
- There is no chapter 3 status code section on Form 1042
Correct

Incorrect
Question 87 of 123

87. Question
What does a withholding agent enter in the Record of Federal Tax Liability section on Form 1042?
- Its own name and address
- The tax liability for the period in which the income was paid or distributed regardless of whether the liability is under chapter 3 or chapter 4.
- The tax liability for the period in which the income was paid or distributed but only for chapter 3 purposes and not for chapter 4.
- The tax liability for the period in which the income was paid or distributed but only for chapter 4 purposes and not for chapter 3.
Correct

Incorrect
Question 88 of 123

88. Question
What is an escrow with respect to Form 1042 reporting?
- When the withholding agent withholds an amount, but was not required to deposit with the IRS just yet.
- When the withholding agent puts a deposit on commercial real estate.
- When the withholding agent decides not do deposit any taxes during the year
- None of the above
Correct

Incorrect
Question 89 of 123

89. Question
Form 1042 is an aggregate report that includes the information from all of which forms it issued for a calendar year?
- Forms W-8EXP
- Forms W-9
- Forms 1042-S
- Forms 1099
Correct

Incorrect
Question 90 of 123

90. Question
What does the reconciliation section of Form 1042 require?
- The reconciliation is between the 50 percent of the income reportable under chapter 4 and paid by the withholding agent during the year and 50 percent of the total amount of U.S. source FDAP income reported on all Forms 1042-S filed by the withholding agent for the calendar year.
- The reconciliation is between the number of Forms 1099 issued for the calendar year and the number of Forms 1042-S issued for the calendar year.
- The reconciliation is between the income reportable under chapter 4 and paid by the withholding agent during the year and the total amount of U.S. source FDAP income reported on all Forms 1042-S filed by the withholding agent for the calendar year.
- None of the above
Correct

Incorrect
Question 91 of 123

91. Question
For purposes of Form 1042 filings, all deposit payments must be made in what currency?
- Any currency
- Any North American Currency
- The currency of the country where the withholding agent has the most account holders
- U.S. or C.A. Dollars
- U.S. Dollars
Correct

Incorrect
Question 92 of 123

92. Question
What happens when a withholding agent makes a late payment of tax?
- The IRS may issue a penalty
- The IRS may charge interest
- Both A and B
- Neither A nor B
Correct

Incorrect
Question 93 of 123

93. Question
Which of the following types of income must be reported on Form 1042-S?
- Interest
- Dividends
- Royalties
- All of the above
Correct

Incorrect
Question 94 of 123

94. Question
Which of the following types of income is not reportable on Form 1042-S?
- Annuities
- Pension distributions
- Deferred Income
- Wagers placed in blackjack
Correct

Incorrect
Question 95 of 123

95. Question
When reporting on Form 1042-S, what type of withholding may apply?
- Chapter 3 only
- Chapter 4 only
- Both Chapter 3 and Chapter 4 at the same time
- Chapter 3 or Chapter 4, but not both at the same time
Correct

Incorrect
Question 96 of 123

96. Question
Which of the following correctly describes the format of an Income Code on Form 1042-S?
- Two digits
- Two letters
- One digit
- One digit and one letter
Correct

Incorrect
Question 97 of 123

97. Question
On Form 1042-S, which currency should the withholding agent use to report Gross Amount of income paid during the calendar year?
- USD
- It does not matter
- Any North American Currency
- The currency of the country in which it has the most account holders.
Correct

Incorrect
Question 98 of 123

98. Question
What are the only allowable chapter 4 withholding rates on Form 1042-S?
- 00.00 (0 percent) and 30.00 (30 percent)
- 30.00 (30 percent) and 50.00 (50 percent)
- 00.00 (0 percent) and 10.00 (10 percent)
- 00.00 (0 percent) and 15.00 (15 percent)
Correct

Incorrect
Question 99 of 123

99. Question
Which of the following is not an available Chapter 4 Exemption on Form 1042-S?
- Grandfathered Obligation
- Excluded Nonfinancial Payment
- Exempt Under Treaty
- ECI
Correct

Incorrect
Question 100 of 123

100. Question
Which Country Codes would a withholding agent use to complete Forms 1042-S?
- Lists prepared by the withholding agent
- Lists provided by the SEC
- Lists provided by the OECD
- Lists provided by the IRS
Correct

Incorrect
Question 101 of 123

101. Question
On Form 1042-S, what does LOB stand for?
- Lower Overall Benefits
- Limiting Overall Benefits
- Limitations on Benefits
- Limitations on Beneficiaries
Correct

Incorrect
Question 102 of 123

102. Question
Which of the following is not treated as a recipient for purposes of Form 1042-S?
- Withholding Foreign Trust or WT
- Withholding Foreign Partnership or WP
- Nonqualified Intermediary or NQI
- Qualified Intermediary or QI
Correct

Incorrect
Question 103 of 123

103. Question
What is Form 1042-T?
- It is the Form 1042-S for Transportation Income Only
- It is the corresponding tax return for Form 1042-S that includes the aggregate withholding information for the withholding agent
- Transmittal of Forms 1042-S
- Form 1042-T is not an IRS approved Form
Correct

Incorrect
Question 104 of 123

104. Question
If a withholding agent discovers a mistake on a Form 1042-S, when would it correct that mistake?
- During the next calendar year reporting
- 90 days following the discovery
- Immediately or as soon as possible
- Correction would not be required if it was a mistake
Correct

Incorrect
Question 105 of 123

105. Question
Which of the following is a penalty related to Form 1042-S reporting?
- Failure to furnish correct Forms 1042-S to recipients
- Incorrect substitute Form 1042-S
- Intentional disregard
- All of the above
Correct

Incorrect
Question 106 of 123

106. Question
Which two IRS Publication are helpful in providing guidance on Form 1042-S reporting?
- Publication 515 and 550
- Publications 15-A and 1179
- Publications 515 and 1179
- Publications 526 and 515
Correct

Incorrect
Question 107 of 123

107. Question
In the Chapter 3 Exemption Code Box, if there is no exemption available, what code with the withholding agent enter and what amount should reflect as the chapter 3 withholding rate?
- Chapter 3 Exemption Code 01 (ECI) Chapter 3 Withholding Rate: 30.00 (30 percent)
- Chapter 3 Exemption Code: 00 (No Exemption) Chapter 3 Withholding Rate: 00.00 (0 percent)
- Chapter 3 Exemption Code: 00 (No Exemption) Chapter 3 Withholding Rate: 30.00 (30 percent)
- Chapter 3 Exemption Code: 07 (Withholding Partnership) Chapter 3 Withholding Rate: 30.00 (30 percent)
Correct

Incorrect
Question 108 of 123

108. Question
Which of the following is a withholding agent required to enter on Form 1042-S?
- Withholding Agent Name
- Withholding Agent Address
- Both A and B
- Neither are required
Correct

Incorrect
Question 109 of 123

109. Question
Certain countries or jurisdictions that agree to be compliant with chapter 4 entered into what type of agreement with the United States?
- IGA
- OECD
- CRS
- NEC
Correct

Incorrect
Question 110 of 123

110. Question
Where would an FFI report withholding on Form 8966?
- In the Identification of Filer section
- In the Account Holder or Payee Identification section
- In the Financial Information section
- Form 8966 does not report withholding
Correct

Incorrect
Question 111 of 123

111. Question
Form 8966 has five parts. Which parts do filers have to complete?
- All five parts
- Only the parts that apply to the filer
- Only the Identification of the Filer Section
- Only the Financial Information Section
Correct

Incorrect
Question 112 of 123

112. Question
Which of the following are examples of filer category codes on Form 8966?
- Filer Code 04 is for Reporting Model 2 FFIs.
- Filer Code 02 is for Registered Deemed Compliant FFIs
- Filer Code 03 is for Limited Branches, Limited FFIs, and related entities or branches.
- All of the above
Correct

Incorrect
Question 113 of 123

113. Question
Which of the following is not required on Form 8966 for an account holder or payee?
- Name and address of account holder or payee
- TIN of account holder or payee
- Whether the account holder or payee is an QI
- Whether the account holder or payee is an entity or individual
Correct

Incorrect
Question 114 of 123

114. Question
Which of the following ways to file Form 8966 is allowable for a financial institution?
- On paper
- Hand delivery
- Electronically
- All of the above
Correct

Incorrect
Question 115 of 123

115. Question
On Form 8966, a valid currency code is in what format?
- 3 digits
- 2 digits
- 3 letters
- 2 letters
Correct

Incorrect
Question 116 of 123

116. Question
On Form 8966, for which of the following may a Participating FFI do pooled reporting?
- Recalcitrant account holders
- Non-consenting U.S. accounts
- Both A and B
- Neither A nor B
Correct

Incorrect
Question 117 of 123

117. Question
Filers that submit paper Forms 8966 must assign a unique identifying number to each Form 8966 that they file. The identifying number must be exactly how many digits or numbers and generally filers begin with which number?
- 3 digits beginning with 001
- 3 digits beginning with 000
- 2 digits beginning with 01
- None of the above
Correct

Incorrect
Question 118 of 123

118. Question
Where do financial institutions in a Model 1 IGA country file their Forms 8966 or XML files?
- With their own tax authorities
- Directly with the IRS
- With the OECD
- All of the above
Correct

Incorrect
Question 119 of 123

119. Question
What does XML stand for and what is it?
- Extensible Markup Language is a programming language that defines a set of rules for encoding documents in a way that both humans and machines can read.
- Extensible Markup Language is a system that the IRS developed for accepting all reports electronically.
- Xtra Mindkeeping Language is a programming language that defines a set of rules for encoding documents in a way that both humans and machines can read.
- None of the above
Correct

Incorrect
Question 120 of 123

120. Question
Which IRS Publication provides guidance on the FATCA XML Schema and IDES?
- Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
- Publication 509, Tax Calendars
- Publication 1187, Specifications for Electronic Filing of Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding
- Publication 5124, the FATCA XML Schema User Guide
Correct

Incorrect
Question 121 of 123

121. Question
Which of the following is not one of the four DocType indicators we might see on a FATCA XML file?
- FATCA1, which indicates new data or new records sent to the IRS that have not been previously processed or voided.
- FATCA2, which indicates corrected data or corrected records transmitted again after the sender received a record level notification from IDES that required a resubmission.
- FATCA3, which indicates void data, or that previously filed records must be voided.
- CRS1, which indicates new data or new records sent to the OECD that have not been previously processed or voided.
Correct

Incorrect
Question 122 of 123

122. Question
On a FATCA XML file, AddressFree will allow the filer to enter an address in an open text box with no restrictions. AddressFix will require the information to be parsed by field into street, building identifier, suite identifier, floor identifier, district name, postal code, city, and country. What might the AddressFree might include:
- 1234 Pine Drive Suite 3D Nowhere, Massachusetts 02025 United States of America
- 1234 as the building identifier Pine Drive as the street Suite 3D as the Suite Identifier 02025 as the Postal Code Nowhere as the City USA as the Country
- Both A and B
- Neither A nor B
Correct

Incorrect
Question 123 of 123

123. Question
On a FATCA XML file, what classification would be included in the OrganizationParty_Type field?
- An individual or human
- An entity
- An exempt organization
- The IRS
Correct

Incorrect

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