Tax form -- people outside U.S.?


#1

With the rewards program (secret new rules and changes), there are also new requrements about tax. As a non-American living and working outside U.S., I have no idea what the W-7 form means, and I need help.

Is it correct that I MUST fill out this form and send it (to the IRS?) in order to receive rewards?

Will that make me a US tax payer?
How will they handle that?
How should I pay US taxes?

What sort of documentation do I need to submit? I sure as hell won’t mail them my original passport!
Where can I get professional guidance about this (without having tpay hundreds of $ for a consultant)?

If I don’t do this tax thing (in time), what will happen to those rewards that I earn (but won’t get because DH won’t pay until they have my tax#)?
Will the money just be lost forever?
Will the money be donated to charity?
Will the money go back to DH?
Will the money be cached until DH gets my tax# and then released to me?

TorbenGB
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#2

It’s weird, no US company (that sent me money) has asked me to fill-in forms for US tax - IRS, this is the first time it happens and it makes no sense, the DH biling team needs to inquire to the local IRS office, even in the form for non-US residents, the ones who need to apply for it are people who want to have tax returns, tax treaty benefits, dependants/spouses of US citizens/residents , so why all this, when it is not necessary? We pay taxes in our country, since we live outside the US.


#3

This is from my experience…

When DH pays you a “reward” that is considered an expense. When DH goes to do their taxes, they have to report Tax IDs to anyone who they gave more than $600 (per year) to. If they don’t, they aren’t allowed to deduct that amount as an expense.

Not only that, but it is also my understanding they are required by law to report the transaction.


#4

The reason you need to give them a tax ID number is because the IRS can require them to withhold 30% of your payments if you don’t. This: http://www.irs.gov/efile/article/0,id=98145,00.html explains it in a muddled, IRS sort of way. I skimmed it & saw something about you possibly being able to avoid the whole mess by filing a form W8 instead, but I don’t know much about that. [Edited to add: In any event, I don’t expect you should have to pay US taxes, since you’d already be paying tax on the income where you live.]

You might want to get in contact with the US embassy in your country–some of them keep full-time IRS agents on staff who can help you sort things out…


#5

Talking with the US embassy in my country (Denmark) would be a sensible first step. It might be silly though if every DH customer needs to talk to their local embassy … they all might become tired of questions about DH after a while. It would be nice if there were somebody (DH) who could explain this once and for everybody, in plain speak.

I’d still like to know from DH what they’ll do if we don’t fill out this form – where will the $$ end up?

TorbenGB
Try out DreamHost with a free WebIDPrices, options


#6

snokarver, I think you are missing the point: All other US companies paying me do NOT ask non-US webmasters to fill-in any tax forms, and these companies are many; I don’t think all of them don’t know what they’re doing and get into trouble with IRS (this goes like this for many years now), while Dreamhost does the right thing.
It’s the opposite, DH billing team is a bit confused about these things, the best for them is to ask a local IRS office.


#7

I probably know more about business taxes and the IRS than many companies. This is mainly because my accountant was an IRS auditor for 20 years. I would say the majority of US companies don’t know how to do their taxes right. Secondly, the way DH is doing things is the same way I would do them. I’m not going to pay out cash if I can’t deduct it.

Just to clarify, you say “the best for them is to ask a local IRS office” - however, there is no such thing.


#8

Then I have to say all the other US companies paying me and other non-US webmasters with no IRS form, for so many years now, must do pretty well if they have not been fined by the IRS so far. All they ask for is a 1099 for US webmasters.
I’d better not promote DH anylonger than filling forms with the IRS as a foreigner.


#9

Don’t get me wrong, I understand your perspective. DH is having to choose between the lesser of two evils.

How much do you make off referrals?