Quote Originally Posted by Jethro View Post
I would avoid such a confrontational approach, particularly since it's unnecessary. Remember, "payers" are typically legal morons. They don't care about OMB numbers; all they care about is "not getting in trouble". So here is what I did recently in a similar situation...

I worked a job and after its completion was presented with a "Form W-9" and told it was "very important" to fill it out "right away". However, I told the lady who gave it to me, "This is the wrong form for me. Are you aware there are many other forms besides the 'W-9'?" She replied that she's heard of other forms before, but didn't know about them, much less have any of them with her. I told her that when I returned home I would supply her with the "most appropriate" form relative to me: a modified W-8BEN. (The "stock" IRS W-8BEN is to be avoided as it's chock full of nasty, presumptuous language repugnant to the rights of We the People.)

So I later sent her the modified W-8BEN form - certificate of foreign status - and told her they will be happy with this form because this is no 1099 reporting or backup withholding required with it. I send a long an excerpt of Publication 515 highlighted with the "Tip" that "Foreign persons who provide Form TIP W-8BEN, Form W-8ECI, or Form W-8EXP (or applicable documentary evidence) are exempt from backup withholding and Form 1099 reporting." The modified form also included a note that as a nonresident alien, I at no time during the year engaged in a "trade or business" in the U.S. I included no SSN or tax ID number. I did not hear a single peep of protest over this form, and I will not receive a 1099 or be subject to any "reporting" from this job.

It's vitally important, though, that before using this form you have proper standing to use it. For that, you need admissible evidence of your nonresident alien (to the "U.S.") status - without that, your form W-8 could be rightly rejected. David's libel of review/evidence repository may be one approach to accomplish that, though I took a slightly different route of publicly recording my status documents, then verifying the notary, and certifying the verification with the State.
Nicely done Jethro! I have been considering the W-8BEN myself. Thanks for sharing the success story. I believe SEDM Family Guardian has a modified W8BEN. You might want to send a copy to auntie as well, specifically to Director of Foreign Operations District in DC.

For those who might want to try this if your payer refuses to accept a W-8BEN, you may want to request in writing an explanation for their refusal, default them when they inevitably fail to provide a satisfactory explanation, then attach the W-8BEN and proof of their refusal to honor it to whatever form they are forcing you to fill out--providing an incorrect SSN and noting the duress with a TDC on the form (also noting your attachment and perhaps noting your payer's refusal to accept it.

If it seems too confrontational and you feel it may threaten your job, you can skip the asking for an explanation part. You should keep a copy of the W-BEN they refused and the W-9 and or W-4 for your records and/or place into evidence repository.

Re: proof of foreign status. The "admissible evidence" can be the W-8BEN itself. The instructions for the form state that "a payer of the income may rely on a properly completed W-8BEN to treat a payment associated with the form W-8BEN as a payment to a foreign person who beneficially owns the amounts paid." Unless they have firsthand personal knowledge that you are a "U.S. person" (as well as the competence and authorization from you to make such a legal determination on your behalf) they have no choice legally but to accept your status as you give it to them. After all, if they were allowed to just do whatever they want with us and our money, why have us sign anything in the first place? They need the illusion of yoru consent!!

BTW I began filing 1040NR (non-resident alien return) a couple years ago, and the IRS completely accepted it no problem. I have a good friend who submitted a 1040NR to the Bankruptcy Court to comply with the requirement of being current on tax filings. The Trustee obviously thought the 1040NR was odd, and asked a question about it at the hearing. But the bankruptcy went through a few days later, no problem.

After obtaining my IRS Individual Master File through FOIA request, I saw that my mailing/filing requirement code reflects that they expect a 1040NR return from me not a 1040. To auntie it really doesn't seem to matter what I call myself; if they receive a 1099 or W-2 they will still presume I have a tax obligation. Nonetheless, I think it is important to get your foreign status established so that any debate can be properly focused on whether or not your payment received was income that was "effectively connected to a trade or business in the U.S." or from a "U.S. source". Since auntie would prefer that Americans think the tax falls on all of us "just because",I believe the declared non-resident alien status of an American living in America is valuable in that auntie does not want a discussion of this topic in court. I think it is good insurance from auntie's harassment in terms of staying out of court.