Nuances of filling out W9 tax form for independent attorney

Every attorney comes across the question: “Do I need to send attorneys’ W-9?”. An independent attorney is a resident who must submit these data independently.

He/she can also provide it to the office, which is obliged to acquire the correct TIN. Besides, attorneys may provide an employer identification number to submit W-9 cess form concerning the amount paid to the resident in 2020 or another amount that the charge paper discloses.

Where should the independent attorney submit W-9 tax form?

Independent contractors must fill out W-9 and transfer it to a tax agent or payer if they are non-residents aliens who are the beneficial owners of the amount subject to taxation. Also, it concerns FFI account holders and who have documented their status as a non-resident alien. If they are the sole owners of an unaccounted person, they are considered the valuable owners of the income received by this person. So, they need to complete and submit the document upon request from a tax agent, payer, or FFI, regardless of whether he/she requires a reduced rate or charge exemption.

Nuances of submission of the W-9 form to the tax agent

If the resident owns the revenue or account in conjunction with one or more persons, the tax agent will consider the income or account to belong to a foreigner who owns the payment beneficially, only if all owners submit the W-8BEN form. However, if a tax agent receives a W-9 form from the third part, the payment will be considered made to a person in the United States, and the account will be considered a US account.

Income that should be indicated in the document

As usual, the amount taxable for independent contractor W-9 mentioned in line 3 is the amount from within the United States that is fixed or calculated for the year or another period (FDAP) income. FDAP income classification includes all income that is mentioned in gross revenue, including interest (also OID), as well as dividends and annuities. The circle of payers of fiscal obligations is strictly defined:

  • citizens of the country;
  • charge residents (located within 183 days or longer);
  • non-residents who have received income in the United States, including if there is no agreement on the prevention of double taxation with the state of origin.

At first glance, the cess system in the United States seems confusing, since each state has its own additional rules, which are radically different even in federal subjects bordering on each other.