My foreign bank is requesting I fill out a W9 form. Do I need to?
The W9 form (Request for Taxpayer Identification Number and Certification) is one of the most commonly filled in IRS forms. Individuals and companies use the W9 form to provide their taxpayer identification number to the payor of US income during the year.
But recently this form has been sent out by foreign banks to identify U.S. persons and entities as part of FATCA. Any identified U.S. persons and entities are then reported as such to the IRS.
The main reason for this is to identify any U.S. persons and entities and report them to the IRS, as they should be filing U.S. tax returns on an annual basis.
How do I complete the W9 form?
The form is fairly simple to complete. You enter:
Your full name
Your full current mailing address
Your tax classification – in most cases this will be individual/sole proprietor. Professionals who operate partnerships, corporations or estates etc. should select as such.
If you are an entity you need to enter an exempt payee code per the instructions
Taxpayer identification number – this is your Social Security Number (SSN) if you are an individual or your Employer Identification Number (EIN) if you are an entity.
Sign and date the form
Send the form to the financial institution requesting the form
Why am I receiving the W9 form?
The bank more than likely has identified you as a U.S. person. As part of the FATCA regulations they have to report all financial accounts held by U.S. persons to the IRS. The W9 form is their way of correctly identifying you for this purpose.
What is FATCA and why does it affect me?
FATCA was signed into law in 2010 and is a designed to prevent tax-evasion by U.S. citizens or residents holding foreign accounts or investments offshore. Read more at FATCA - what is it?
What happens if I refuse to fill in and return the W9 form?
The banks will be heavily penalised under FATCA if you do not comply with their request. If you refuse to fill in and file the W9 form they more than likely will refuse to service you (i.e. close your account). There are many people who have had their accounts frozen or closed as a result of refusal to comply.
What happens next after I send my bank W9 form?
The bank will start reporting any accounts you hold to the IRS. You need to ensure that you are fully complaint in any past tax return filings (including any information returns like the FinCen 114 form) as there are heavy penalties for failure to file. Seek advice from a tax professional who will be able to assist.
I'm not a U.S. person but I've been sent a W9 form - why?
The banks have millions of customers. To identify which are U.S. persons or entities they had to analyse all accounts by various methods. Some of these include the following (see below) and if you fell into any of these, then you would have received a W9 form. Some banks also send a self certification form for account holders to certify they are not U.S. persons.
Types of methods used to determine and locate a U.S. person or entity:
- U.S. citizenship or U.S. residence
- U.S. Tax residence
- U.S. place of birth
- a U.S. address or a U.S. PO box
- a U.S. telephone number
- a joint acount with a U.S. person
- regular or repeated payments to a U.S. bank account
- a Power of Attorney granted to a person with a U.S. address
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