For purposes of these FAQs, a Tax Document refers to one of the following IRS-issued forms:
- Form W-9, Request for Taxpayer Identification Number and Certification
- Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
- Form W-8BEN-E, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities)
- W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting
Note: The IRS has also issued additional tax documents (i.e. Form W-8EXP, W-8ECI) , that are currently not supported by TaxBit.
General FAQs
Q: What is a Form W-9?
A Form W-9 is completed by US residents or citizens and is used to establish an individual and entity’s US tax status, as well as collect and confirm the tax identification number (TIN), either Social Security Number (SSN) or Employer Identification Number (EIN). The information provided on a Form W-9 is commonly used to complete, and file a Form 1099.
For US tax purposes, the definition of a US person includes:
- A citizen or resident of the United States
- A domestic partnership
- A domestic corporation
- Any estate other than a foreign estate
- Any trust if:
- A court within the United States is able to exercise primary supervision over the administration of the trust, and
- One or more United States persons have the authority to control all substantial decisions of the trust
- Any other person that is not a foreign person.
An individual may be considered a US resident for tax purposes if they meet the Substantial Presence Test for a calendar year.
Q: What is a Form W-8?
The W-8 (Series) Forms are completed by non-US residents, and are commonly used to establish an individual or entity’s Non-US status, and provide other related information, if applicable. The different types of Forms W-8 are completed based on the type of end customer providing the form, and sometimes the type of income being received. For example, Individuals will always fill out a Form W-8BEN, while corporations will likely fill out a Form W-8BEN-E, and entities acting as intermediaries or flow-throughs will complete a Form W-8IMY.
A Form W-8 is collected to facilitate reporting related to certain payments of US Fixed, Determinable, Annual & Periodic (FDAP) income on Forms 1042-S.
Q: Why is a Tax Document collected?
In general, a Tax Document is collected for purposes of identifying whether an end customer is a US Person, and assists in determining whether an end customer should receive certain year-end information return (i.e., Forms 1099, 1042-s, etc.).
For clarity, Taxbit assists with the collection of Tax Documents at the request of platforms. An end customer should contact the platform that is requesting a Tax Document with any questions regarding why a Tax Document is being requested.
Remediation FAQs
Q: What is Tax Document Remediation?
When a Tax Document (primarily Form W-8BEN, W-8BEN-E, or W-8IMY) is submitted by an end customer, it is the responsibility of the collector to review the information provided on the Tax Document, in tandem with certain other information on file for the end customer, to determine whether the Tax Document is acceptable, and can be relied upon for the purposes in which it is being collected.
Q: Why is Form W-8 remediation necessary?
To the extent a Tax Document provided by an end customer is not acceptable, it is typically best practice to remediate the Tax Document, as soon as possible, before relying upon it for purposes of completing year-end reporting. It is also important to understand any withholding obligations that could arise due to the status of the customer’s tax documentation. You should contact your tax advisor for further information on your obligations to report and withhold.
A Tax Document can be deemed not acceptable for a variety of reasons, but in general, it is because the form has not been completed properly, or the information provided on the form is either inconsistent, or conflicts with other information on file for the end customer.
For example, a Form W-8BEN provided by an individual should not include a post office Box / care-of address, and should instead include a direct, physical address. However, one of the most common reasons a Form W-8 must be remediated is because of the existence of US Indicia.
Q: When is Form W-8 remediation necessary?
Remediation is generally necessary in the following situations:
- The Form W-8 is invalid due to facial errors
- The Form W-8 contains US Indicia
- The Form W-8 contains in-care/of or P.O. Box information
- The Form W-8 has expired
Q: What is US Indicia?
The term US indicia has the meaning set forth in 1.1471-4(c)(5)(iv)(B) when applied to an individual and as set forth in 1.1471-3(e)(4)(v)(A) when applied to an entity.
With respect to an individual, it includes —
- Designation of the account holder as a US citizen or resident
- A US place of birth
- A current US residence address or US mailing address (including a US post office box)
- A current US telephone number (regardless of whether such number is the only telephone number associated with the account holder)
- Standing instructions to pay amounts from the account to an account maintained in the US
- A current power of attorney or signatory authority granted to a person with a US address
- An “in-care-of” address or a “hold mail” address that is the sole address the FFI has identified for the account holder
When used with respect to an entity, it includes —
- Classification of an account holder as a US resident in the withholding agent's customer files
- A current US residence address or US mailing address
- With respect to an offshore obligation, standing instructions to pay amounts to a US address or an account maintained in the US
- A current telephone number for the entity in the United States, but no telephone number for the entity outside of the United States
- A current telephone number for the entity in the United States in addition to a telephone number for the entity outside of the United States
- A power of attorney or signatory authority granted to a person with a US address
- An “in-care-of” address or “hold mail” address that is the sole address provided for the entity
Q: How do I Remediate a Form W-8BEN, W-8BEN-E, & W-8IMY?
In general, there are two potential remediation actions that can be taken to resolve documentation issues on a Form W-8.
1. Submit a New Form W-8
Certain issues noted may be resolved by the resubmission of an updated tax document. For example, the inclusion of a post-office box address as a permanent address on a Form W-8BEN may be resolved by the resubmission of a Form W-8BEN with a direct, physical permanent address.
Once an updated tax document is submitted, the new form should be reviewed to determine whether any previously identified issues on a Tax Document have been resolved.
Taxbit’s Digital W-8/W-9 product will review any newly submitted Tax Document against the previous Tax Document on file to determine whether any open issues have been resolved, as well as whether any new issues exist. The results of that review can be found within the Taxbit Dashboard
2. Obtain Curing Documentation
Certain issues noted are otherwise resolved by the collection of curing documentation. This process involves contacting the end customer for additional documentation to substantiate the information provided on the Form W-8 – see additional information below regarding what should be considered prior to “accepting” curing documentation.
Taxbit’s Digital W-8/W-9 product allows you to indicate that acceptable curing documentation has been obtained from the end customer within the Taxbit Dashboard. Once this has been done, the Tax Document on file will be re-reviewed to determine whether any open issues remain, and the status of the Tax Document will update accordingly.
Q: When are certain remediation actions required?
The following chart summarizes the curable and/or non-curable issues on a Form W-8BEN and W-8BEN-E identified by Taxbit’s Digital W-8/W-9 Product, and the related remediation action options.
Form Type | Issue in Taxbit System | Remediation Action Option(s) |
Form W-8 (W-8BEN, W-8BENE, W-8IMY) |
US Indicia | Obtain Curing Documentation |
US Permanent Address | Submit a new Form W-8 | |
PO Box Permanent Address | Submit a new Form W-8 | |
Care-of Permanent Address | Submit a new Form W-8 | |
Expired Form | Submit a new Form W-8 | |
Change in Circumstances | Submit a new Form W-8 OR Update Account Owner data via API/CSV | |
Form W-9 | Change in Circumstances | Submit a new Form W-9 OR Update Account Owner data via API/CSV |
Self-Certification | Change in Circumstances | Submit a new Self-Certification OR Update Account Owner data via API/CSV |