As previously announced, the Internal Revenue Service will soon begin charging user fees for the residency certification letters commonly used to avoid foreign value added taxes.
The fee will be applied to Form 8802, "Application for U.S. Residency Certification," for all applications postmarked after Oct. 2.
The form is actually used to request Form 6166, a letter that the applicant may use as proof of their status as a resident of the United States to claim benefits under an income tax treaty, or an exemption from a foreign country's value added tax.
A single Form 8802 can be used to request multiple Forms 6166. The initial user fee of $35 covers a single Form 8802 requesting up to 20 letters for a single taxpayer identification number. From there, for each additional $5 supplied with the Form 8802, an additional 20 letters can be requested, regardless of the country for which certification is requested or the tax period to which the certification applies.
Accordingly, the following fee schedule applies based on the number of Forms 6166 requested per Form 8802:
- One to 20 letters -- $35
- 21 to 40 letters -- $40
- 41 to 60 letters -- $45
- 61 to 80 letters -- $50
The user fee was enacted after the Office of Management and Budget instructed federal agencies to charge fees reflecting the full cost of goods or services that "convey special benefits to recipients beyond those accruing to the general public."
