U.S. Taxation of Artists from Abroad

The Taxation on International Artists Task Force was formed in June 2007 and is dedicated to improving opportunities for international cultural exchange. U.S.-based organizations should be informed about compliance with Internal Revenue Service (IRS) and Social Security Administration (SSA) requirements, as they pertain to the engagement of foreign guest artists.

We are working to urge the Internal Revenue Service and Social Security Administration to support international cultural exchange by easing the burdensome tax requirements foreign guest artists engaged by or on behalf of nonprofit arts organizations.

These are issues that have been brought to our attention:

· IRS requirements for withholding for foreign guest artists are complicated, unclear, and subject to inconsistent interpretation by the IRS.

· Many nonprofit arts organizations must withhold a full 30% from compensation for foreign guest artists, as it is often difficult or impossible to access existing forms of exemption from withholding.

· To comply with tax requirements, individuals are required to obtain a Social Security Number (SSN), which is increasingly difficult and often impossible for foreign guest artists visiting the United States for only a brief period of time.

· Without an SSN, artists can not avail themselves of the exemptions from withholding available via tax treaties. The IRS Form 8233 – the application for individual exemption from withholding – requires a U.S. tax identification number.

· Entering into a Central Withholding Agreement (CWA is usually not an option for visiting guest artists.) The nature of scheduling, booking, and confirming highly sought-after artists, guest soloists and performing groups- usually on a case-by-case basis - makes it extremely difficult arrange a tax agreement in advance. CWAs and mini-CWAs are currently available only to individuals and are not available for groups of artists.

· The IRS does not have a reliable and accessible process in place for recognizing the nonprofit status of foreign arts groups. Currently, IRS requires a letter from a U.S.-based attorney, stating that the foreign entity would be eligible for 501(c)(3) status in the U.S. It is often impossible to obtain such a letter.

· Foreign guest artists performing with nonprofit arts organizations are subject to the same tax burden as large, for-profit foreign stadium acts. For foreign artists earning modest compensation, this tax burden may prevent them from accepting a U.S. engagement.

More information can be found here.