You must get an IP PIN to file your current or prior year returns in 2015 if: 1  You received a CP01A Notice with your new IP PIN and you lost it, or. 2  You had an IP PIN in a prior tax year and you didnât receive a new one this year, or.
Royalty Payment to a Nonresident Alien. A royalty is income derived from the use of the taxpayer's property. A royalty payment must relate to the use of a valuable right. According to the IRS, tax must be withheld on the payment of royalties from sources in the United States.
How Royalties Work. Generally, royalties work by a licensor/inventor contracting with a licensee to allow the licensee to manufacture or sell a patented product in exchange for royalties. Usual and customary royalties are around 5% of net sales of the licensee to be paid to the licensor.