Tax forms
Thread poster: TB CommuniCAT

TB CommuniCAT  Identity Verified
Canada
Local time: 21:34
Member (2014)
English to French
May 15, 2014

Hello,

I have a potential US client who is asking me to sign the following forms:

W-8BEN : Certificate of foreign status of beneficial owner of United States tax withholding
W-9 : Request for taxpayer, identification number and certification

Just wondering if anyone had signed these forms before and what are your thoughts?

Thank you!


 

Kevin Fulton  Identity Verified
United States
Local time: 21:34
German to English
W-9 not applicable May 15, 2014

The W-9 form is for either US citizens, or those residing in the US with Social Security numbers subject to US income taxes.

W-8BEN is for other persons doing business with a US company. It's a standard form that non-US persons living outside the US fill out indicating that they're not subject to US tax.

Neither forms go beyond the entity requesting them. They're used in the event of an audit by the Internal Revenue Service to verify that the company is observing the regulations pertaining to tax reporting/withholding, etc.

No big deal. Fill out the form.


 

TB CommuniCAT  Identity Verified
Canada
Local time: 21:34
Member (2014)
English to French
TOPIC STARTER
Tax forms May 15, 2014

Thanks Kevin!

Can you also let me know whether these forms are usually required by most US companies or does it depend on the company?


 

Kevin Fulton  Identity Verified
United States
Local time: 21:34
German to English
All companies require these May 15, 2014

As far as I know, this is a federal requirement. I don't think I've ever worked for an agency or even an outsourcing colleague who didn't ask for a W-9. Some require it up front, most ask when you've taken your first assignment.
The agency needs this information to issue a reporting statement (1099) if during the year you've made more than $600 Good agencies won't wait until you've made $600.


 

Patrick Porter
United States
Local time: 21:34
Spanish to English
+ ...
Fill out the W-8BEN, but... May 15, 2014

Kevin Fulton wrote:
No big deal. Fill out the form.


I agree. It's best to just fill out the form. It seems like a lot of agencies are asking for it.

However, the form does not appear to be applicable to translators performing personal services outside the United States. According to the W-8BEN instructions, it is only applicable to income to a non-U.S. taxpayer that is "subject to withholding" under I.R.C. Sec 1441.

Section 1441 says that income is only subject to withholding "to the extent that any of such items constitutes gross income from sources within the United States". Income from personal services performed outside the United States is generally not considered U.S.-sourced (I.R.C. Sec. 861(3)). So it would seem that the form is unnecessary for most non-U.S. translators performing their work outside the country.

To the best of my knowledge, agencies should not be withholding anything from payments for services performed outside the United States, whether the payee has completed a W-8BEN or not. The form relates to amounts subject to withholding, such as interest, royalties, dividends, etc. from U.S. sources. From the payee's perspective, it also gives the chance to claim treaty benefits, which may reduce or even eliminate any applicable withholding in some cases.

As mentioned by others (in this post and previous ones on the same topic) U.S.-based agencies seem to ask for the form a lot. So, it's probably best to just fill it out and send it in to make them happy. I can't think of why they would ask for it. They probably just think there is a form for everything. Perhaps it is an easy way for them to document your address, etc. outside the United States, but they would generally already have this info documented anyway. Or maybe there's some other good reason I'm not aware of?

Conversely, they would definitely need a W-9 from a U.S. taxpayer to claim the amounts paid as part of their costs.

In any event, as a lawyer licensed in a U.S. state, I am obliged to say that this reply is not intended to be legal advice or a legal opinion to the original poster or to anyone reading this page. It is merely information based on my general knowledge. For specific legal and tax advice it is best to contact an attorney or accountant. But you probably already knew that.

[Edited at 2014-05-15 21:15 GMT]


 

TB CommuniCAT  Identity Verified
Canada
Local time: 21:34
Member (2014)
English to French
TOPIC STARTER
Thank you May 15, 2014

Thank you everyone for your responses!

 

Łukasz Gos-Furmankiewicz  Identity Verified
Poland
Local time: 03:34
English to Polish
+ ...
... May 17, 2014

Yes, the IRS thinks it has universal jurisdiction just as long as any money leaves American hands. It's a miracle that you don't have to file W8 and get an EIN/ITIN/whatever if you have a grocery shop in Europe and an American buys bread from you.

Plus, the filling in and filing instruction is rocket science. I'm finalizing a Ph.D. degree in law this year, and I can't understand the thing.

I may be on the no-fly list already because I've dropped the IRS an e-mail telling them what I think about that.

[Edited at 2014-05-17 16:20 GMT]

[Edited at 2014-05-17 16:21 GMT]


 


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