My mother, opened an account with T. Rowe Price in December of 1999 and purchased $3,000 in shares of the T. Rowe Price Total Equity Market Index Mutual Fund.in March of 1999, she purchased an addition $2,500 in shares of the Total Equity Market Index Fund.
As a Malaysian citizen, she is required to file a W-8 plus proof of foreign residence every year to maintain a foreign exempt tax status with T. Rowe Price. This year was no exception and she filed a W-8BEN form and photocopies of her Malaysian passport in January.
In March she submitted a redemption order for all the shares in the mutual fund. At the time, the amount was $5,535.95. Of that, she only received a check for $3,985.88. The remaining $1,550.07 was withheld by T. Rowe Price.
We called T. Rowe Price customer service a number of times. First, they claimed that the amount was withheld because there was no social security number on the account. When we explained that the account holder is a foreign citizen, they claimed that no W-8BEN form had been filed. That too was proven untrue when they checked their records. Then they claimed that no proof of foreign citizenship was submitted. And that too was shown to be untrue when they did indeed have photocopies of my mother's Malaysian passport.
In our latest call to Jason Beran, a customer service representative at their Colorado Springs office, he said that the money that was withheld had already been sent to the IRS and so they cannot correct the excess withholding.
This contradicts what the IRS states, which is that the withholding agent may refund excess withholding at any time before the end of the year.in addition, he said that my mother may file a 1040NR next year to get the money back and again, that is false as the 1040NR requires a Taxpayer Identification Number, which she does not have nor is required to obtain as an individual with foreign exempt status.
In order to resolve my complaint, T. Rowe Price should correct the excess withholding and send a check for the amount withheld.
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