What Are the Consequences of Submitting a W-9 Instead of a W-8BEN?

Question from Lau, What Are the Consequences of Submitting a W-9 Instead of a W-8BEN?

Answer from AI:

As a non-resident alien in the United States, submitting the correct tax forms is crucial to ensure compliance with U.S. tax laws. In your case, you mistakenly submitted a W-9 form instead of a W-8BEN form. Let’s break down the potential consequences and steps you should take to rectify this situation.

Understanding the Forms

• W-9 Form: This form is used by U.S. persons (citizens and residents) to provide their taxpayer identification number (TIN) to entities that will report income paid to them.
• W-8BEN Form: This form is used by non-resident aliens to certify their foreign status and claim any applicable benefits under an income tax treaty.

Potential Consequences

Submitting a W-9 form instead of a W-8BEN can lead to several issues:

1. Incorrect Tax Withholding: The company may withhold taxes at the rate applicable to U.S. residents, which is typically higher than the rate for non-resident aliens.
2. IRS Penalties: While the IRS is unlikely to impose severe penalties for an honest mistake, you may face issues if the error is not corrected promptly. The IRS could potentially assess penalties for incorrect information.
3. Company Actions: The company may need to correct their records and possibly reissue any tax documents (like 1099 forms) they have already prepared.

Steps to Correct the Mistake

To address this mistake, follow these steps:

1. Inform the Company: Contact the company that paid you and explain the mistake. Apologize and provide them with the correct W-8BEN form.
2. Submit the Correct Form: Fill out and submit the W-8BEN form to the company as soon as possible.
3. Request Corrections: Ask the company to correct any tax documents they have issued based on the incorrect W-9 form.

When to Seek Legal Advice

While this mistake is generally not severe, it is always a good idea to consult with a tax professional or attorney to ensure that you are taking the correct steps to rectify the situation. They can provide personalized advice based on your specific circumstances.

Resources for Further Information

For more detailed information, you can refer to the following resources:

• About Form W-9 on the IRS website
• About Form W-8BEN on the IRS website

Remember, while this mistake is not likely to result in jail time or severe penalties, it is important to correct it promptly to avoid any potential issues. Always consult with a legal professional for advice tailored to your specific situation.