CUNA Comment Letter
Request for Taxpayer Identification Number and Certification
January 5, 2001
The Honorable Charles O. Rossotti
Internal Revenue Service
1111 Constitution Avenue, N.W.
Washington, D.C. 20224
Dear Commissioner Rossotti:
I am writing on behalf of our members -- approximately 90% of the nation's 10,500 state and federal credit unions -- to urge you to suspend immediately mandatory compliance with a change that the Service has just made to form W-9, "Request for Taxpayer Identification Number and Certification."
The IRS issued a new W-9 form on or about December 15, 2000 with an effective date of January 1, 2001, without notice or a transition period. It is operationally impossible for credit unions to comply with the change on such short notice.
The pre-2001 W-9 form required the account owner to certify that the Taxpayer Identification Number (TIN) is correct and that the account owner is not subject to backup withholding. The 2001 W-9 form requires an additional certification -- that the account owner is a U.S. person, which includes resident aliens. Many credit unions have, since TIN certification was mandated in 1983, incorporated the required certification language into their membership account agreements, as permitted under the substitute W-9 rules. More than two weeks in lead time is needed to modify, print, and distribute revised account agreements for new members.
I wish to call your attention to the fact that after information reporting rules were published in May 2000, a major national forms provider to credit unions and banks contacted the IRS on several occasions to find out if the W-9 form would be changed. The company was informed that the form would not be changed. Moreover, we are aware that in September the Service announced a public comment period on a number of IRS forms, but the W-9 form was not among them. If we had been given an opportunity to comment, we would have strenuously objected to a form being released at year-end that must be used starting January 1, 2001.
CUNA urges the IRS to postpone the effective date of this change to no earlier than July 1, 2001. This will give credit unions and the many other financial institutions subject to TIN certification the opportunity to use up some of their existing stock of forms and to make an orderly transition to this new regulatory requirement. We see no practical impact on the implementation of the U.S. tax laws by allowing a six-month -- or even a one-year -- delay in the effective date.
If you have any questions or seek further information about the burden the Service's change in certification language has created, please contact either Kathleen Thompson, CUNA's Senior Vice President for Compliance or Lilliane Butzky, our Federal Compliance Counsel in CUNA's Washington office.
Daniel A. Mica
President & CEO
cc: Stuart L. Brown, Chief Counsel