a-01-91.pdf

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# Part IV - Items of General Interest

The Internal Revenue Service Will Permit Electronic Submission of Forms W-9
by Certain Intermediaries.

# Announcement 2001 - 91

## Background

In Announcement 98-27, 1998-1 C.B. 865, the Internal Revenue Service (the
"Service") announced that it will allow payers to establish a system to electronically
receive Form W-9, "Request for Taxpayer Identification Number and Certification" from
payees. The "Instructions for the Requester of Form W-9" were revised to describe a
proper electronic system.

The Service will also allow a payer with an electronic system to electronically
receive a Form W-9 from an investment advisor or introducing broker authorized to
transmit that form as the payee's agent. To receive a Form W-9 from an investment
advisor or introducing broker, a payer's electronic system must meet the requirements
described below. The Service will revise the instructions to Form W-9 to reflect the
provisions of this announcement.

## Definitions

For purposes of this announcement, the term "payer" means a person required to
file an information return for payments described in §§ 3406(b)(2) and (3) of the
Internal Revenue Code. The term "payee" means the person required to submit Form
W-9 to the payer. The term "investment advisor" means a corporation, partnership or
individual registered with the Securities and Exchange Commission ("SEC") under the
Investment Advisers Act of 1940. The term "introducing broker" means a broker-dealer
that is regulated by the SEC and the National Association of Securities Dealers, Inc.,
and that is not a payer.

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## Reliance

A payer receiving a Form W-9 from an investment advisor or introducing broker
authorized to transmit the Form W-9 to the payer may rely on it as if the form had been
received directly from the payee, for purposes of filing information returns and
determining the payer's backup withholding obligations under § 3406. The advisor or
broker must represent in writing (which may include electronic means) to the payer that
the payee authorized the advisor or broker to transmit the Form W-9 to the payer.

The Form W-9 received from the investment advisor or introducing broker may be
either the original paper Form W-9 or an electronic version (including a facsimile). An
electronic version must be received by the payer through a system that meets the
requirements described below. This announcement does not apply to situations in
which a broker acts as a payee's agent with respect to "readily tradable instruments"
pursuant to the special rule in § 31.3406(h)-3(d) of the Employment Tax Regulations.
Therefore, in the case of readily tradable instruments, the payer may rely on a
taxpayer identification number provided by the broker (including by electronic means)
unless certification is required and the broker notifies the payer that the number was
not certified.

### Electronic System Requirements

(1) In general. The electronic system must ensure that the information
received by the payer is the information sent by the investment advisor or introducing
broker. The system must document all occasions of user access that result in the
submission. In addition, the design and operation of the electronic system, including
access procedures, must make it reasonably certain that the person accessing the
system and submitting the Form W-9 is the investment advisor or introducing broker.

(2) Same information as paper Form W-9. The electronic submission must
provide the payer with exactly the same information as the paper Form W-9.

(3) Signature requirements and perjury statement. The electronic

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submission must be signed with the payee's electronic signature, but only in situations
where Form W-9 and its instructions require a signature by the payee.

(A) Electronic signature. In addition to identifying the payee to whom the
Form W-9 relates, the electronic signature must authenticate and verify the
submission. For this purpose, the terms "authenticate" and "verify" have the same
meanings as they do when applied to a written signature on a paper Form W-9. An
electronic signature can be in any form that satisfies the foregoing requirements. The
electronic signature must be the final entry in the submission.

(B) Perjury statement. The electronic signature on Form W-9 must be under
penalties of perjury. The perjury statement must contain the language that appears on
the paper Form W-9. The electronic system must inform the payee that, by
signing, the payee makes the declaration contained in the perjury statement. The
perjury statement must immediately precede the electronic signature.

(4) Copies of electronic Forms W-9. Upon request by the Service, the payer must
supply a hard copy of the electronic Form W-9 and a statement that, to the best of the
payer's knowledge, the electronic Form W-9 was submitted by the investment advisor
or introducing broker acting as the payee's agent. The hard copy of the electronic
Form W-9 must provide exactly the same information as, but need not be a facsimile
of, the paper Form W-9.

(5) Effective date. This announcement applies to Forms W-9 submitted to payers
by payees through investment advisors or introducing brokers on or after
September 4, 2001.

For further information regarding this announcement, contact Nathan Rosen of the
Office of the Associate Chief Counsel (Procedure & Administration), Administrative
Provisions and Judicial Practice Division, at (202) 622-4910 (not a toll-free call).