The IRS has posted a January 2011 version of Form 13930, Application for Central Withholding Agreement, on its website.
Code Sec. 1441(a) requires withholding to be deducted at a 30% rate on the gross amount of interest, dividends, rent, salaries, wages, compensation, remuneration, and emoluments that nonresident alien (NRA) individuals receive from sources within the United States. However, under a central withholding agreement (CWA), withholding is computed on estimated net income, rather than gross income, and at graduated tax rates afforded to U.S. resident aliens and U.S. citizens, rather than at a 30% tax rate. The IRS will consider entering into a CWA with a nonresident entertainer or athlete if all of the requirements in Rev Proc 89-47, 1989-2 CB 598, are met.
An authorized representative may apply for a CWA on a nonresident entertainer's or athlete's behalf. The IRS accepts Form 2848, Power of Attorney and Declaration of Representative, and Form 8821, Tax Information Authorization. Requests for a CWA must be submitted at least 45 days before the tour begins, or the event occurs, to give the IRS enough time to evaluate the application.
The form instructions note that the agreement is only effective for the tour or events covered in the CWA, and the payments stipulated in the CWA. The agreement must be signed by all parties to the CWA (i.e., the NRA, withholding agent, and the IRS) before it becomes effective. The CWA program requires withholding agents to be enrolled in the Electronic Federal Tax Payment System (EFTPS) and requires deposits to be made through EFTPS. The withholding agent must withhold and pay withholding tax according to the terms of the CWA. The withholding agent must be an independent third party who is unrelated to the NRA, or entities owned by the NRA.
Form changes. The mailing address for the form has changed. Form 13930 should now be mailed to: Central Withholding Agreement Program, Internal Revenue Service, 3651 S. I H 35, Stop 4302 AUSC, Austin, TX 78741. The form had previously been filed in Las Vegas. There are no other changes to the form. The form was last revised in July 2009.