USA & UK: Need help finding official info about IRS rule changes re ITINs on W-8BEN forms for royalties


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Can anyone help us? I’m writing on behalf of a substantial group of UK (and International) artists/designers who work with a US company which pays copyright royalties on artwork used on Print On Demand (POD) items. We supply the creative work and they print this onto a range of products (t-shirts, mugs, posters, cards etc.) when an item is ordered and then pay us a copyright royalty for use of the artwork.

This particular company is causing us some huge problems by demanding that we supply an ITIN when submitting a W-8BEN form. This is recent (5 weeks ago) and prior to that they did not require an ITIN.

However, the W-8BEN form itself, the official documentation on the IRS website, and direct communications (email and phone) between artists/designers and the IRS, all confirm that the ITN is no longer required; apparently the rules changed on January 1st, 2015 and our own national tax number is now sufficient. Also numerous other US companies who make royalty payments in the same way, do not require an ITIN number on their W-8BEN forms. But this company still insists that an ITIN is required and is promising to withhold 30% tax if we do not supply it.

We want as much ammunition as possible to persuade them not to take this tax (for some artist it’s their main, or even only income!). We are approaching this on a lot of fronts, but my specific aim is to find some official documentation about the change to the rules for the W-8BEN form (which we understand changed January this year). We can find numerous blogs, accountant type website etc that talk about this change, but we haven’t been able to find any official documentation – can anyone help please?

Thank you.
 
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smallbushelp

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My suggestion would be to go to www.IRS.gov and search for the information you need. Then when you find it, print it and send it to the problem company.
 
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smallbushelp, thank you for your suggestion. If only it were that simple! We have, of course, searched the IRS website multiple times but (even with multiple members trying) haven't been able to come up with the official notification. Perhaps it has never been published online?

One thing we have now established is that the date of the change was wrong in my first post and the new regulation actually came into effect on July 1st 2014. We're still looking for any official documents regarding this, so if anyone can help it would be much appreciated.
 

smallbushelp

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It's not like the IRS to be remiss in publishing ANTHING that affects taxes. And it's been my experience that every IRS document requires an IRS issued taxpayer identification number (TIN). A quick search of the IRS website turned up the following publications. You'll probably find your answer here:


Instructions for the Requester of Forms W–8BEN, W–8BEN–E, W–8ECI, W–8EXP, and W–8IMY (HTML)
Update to the Instructions for the Requester of Forms W-8BEN, W-BEN-E,W-8ECI,W-8EXP, and W-8IMY
 
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smallbushelp, many thanks for those links. I believe that members of our group have already searched those docs for the information we're after, but it can't hurt to scour them again to see what we can turn up.

We are after something that deals specifically with ITINs in relation their use on the W-8BEN by non-US citizens, who come from a country with a Tax Treaty with the US and who are receiving copyright royalties – apparently the rules changed with effect from July 2014 – partly because the requirement was placing such a burden on the IRS as it was never originally aimed at the number of, and sort of, small/micro-business and sole traders it is now affecting (and [our speculation] that the requirement actually contravened the non-discrimination Articles in the Tax Treaties).

The IRS have told numerous members (by email and phone) on numerous different occasions that the ITIN is no longer required, and the actual instructions and forms themselves state the same! But the company concerned isn't taking any notice of that (and keep referring us back to the old rules that did require and ITIN), so we want something official about the change to throw at them!

Anyway, many thanks for your help so far.
 

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