In Response to the IRS Making 1042 Audits a Tier 1 Issue, CTI Releases MD3 Version 2.0

BOSTON, MA--(Marketwire - January 5, 2009) - Compliance Technologies International, LLP ("CTI") announces the release of MD3 ("Mandatory Document Due Diligence") version 2.0, its popular Tax Form Validation Software tool. MD3 enables U.S. Withholding Agents and Qualified Intermediaries to systemically validate tax withholding certificate Forms W-8, W-9 and KYC documentation in accordance with the mandatory due diligence rules provided in the Internal Revenue Code § 1441 regulations.

MD3 version 2.0 reduces the validation time and simplifies the user's experience for validating Forms W-8, W-9 and KYC documentation and delivers a thorough web-based tax document review compliant with the IRS regulation. MD3 version 2.0 has the logic to validate all the following:

--  Off-shore accounts: Forms W-8, W-9, and Know Your Customer
    documentation;
--  U.S. or on-shore accounts: Forms W-8, W-9, and U.S. exempt recipients;
    and
--  Vendor Payments: Forms W-8, W-9, and 8233.
    

MD3 archives validation results and form expiration dates that can be used for re-solicitations, retrievals for use in tax and management reports, as well as IRS audits.

Here are a few of the new features of MD3 version 2.0:

Validation of Treaty Claim (Form W-8BEN)

MD3 now offers separate validation question based on whether the Form W-8BEN is being used to validate only foreign status, or foreign status and a valid treaty claim. With an upgraded profile page that asks for the treaty country used on Line 9a, MD3 saves time by eliminating questions related to treaty claims if a valid treaty country is not entered into the profile screen. New logic also enhances the ability of MD3 to validate documentary evidence necessary to cure a treaty claim, which is different than that used to cure a U.S. address alone.

Additional Documentation

New logic enhances the ability of MD3 to validate additional documentary evidence necessary to cure a U.S. address, which is as essential to the validity of the Forms as the validation of the tax form itself.

New Help Resources and Tutorials

Help features, tutorials and hints allow easy access to important compliance information. Several tutorials provide information regarding: what constitutes acceptable documentary evidence; what is an acceptable capacity of the person signing the form; what are the criteria for substitute Forms W-8 and W-9; and how to validate intermediary accounts.

About CTI

CTI's MD3 validation tool has been used in multi-national corporations and seven of the ten largest financial institutions in the world since 1998. CTI has a strong team of highly specialized and experienced international and domestic tax professionals, including: lawyers, accountants, software engineers and operation experts. CTI's team is a leader in cutting edge global tax technology; consulting and outsourcing services specializing in information return reporting and tax withholding. Years of practice have contributed to their long standing and solid relationships with worldwide financial institutions, multi-national corporations, tax authorities and governments.