The main purpose of the law is to prevent US citizens from tax evasion. The intention of IRS is to introduce a mechanism aimed at preventing tax evasion from income received by US citizens and residents outside the United States. W9 form USA is an official written request that is used to confirm the TIN of the resident. Refusal to write in w-9 tax form, the provision of notable information may create additional reputational risks for them related to possible sanctions from the IRS and financial institutions, in particular, as a forced withdrawal of 30% of any bank transfer amounts.
The subjects of control
- US citizens who obtained citizenship by birth or by naturalization, regardless of whether they have citizenship of another state;
- Persons with a residence permit (Green Card);
- Persons who stayed in the United States for 31 days in the current year and more than 183 days in total for the previous 3 years;
- American legal entities;
- Legal entities whose share capital is directly or indirectly owned by one or more US participants.
The objects of control are any bank accounts opened by the above persons.
If the tax w 9 fill in incorrectly, the employer has the right to:
- refuse to open an account (entering into a contract) to an organization or an individual in respect of which the organization has certificationgrounds to believe that they are a foreign organization or a foreign individual if these institutions or individuals refuse to write in the established papers (non-completion of the established documents in within 60 business days following the day of the request);
- unilaterally refuse to perform the concluded contract if he refuses to fill out a form in respect of which the organization has documented grounds to believe that it is a foreign organization or a foreign individual, from submitting documents and information necessary to fulfill the obligations under the agreement, and (or) from filling in established forms (failure to submit such documents and information, failure to write in established papers within 60 working days following the day of the request), whether continued performance of the contract will result in inability to perform the obligations under the agreement;
- unilaterally denial to execute the concluded contract if the account holder (client under the contract) refuses to give consent to the submission of information (failure to provide such consent within 60 working days following the day of the request).
Employers who have received the above mentioned cess paper should not disclose information to unauthorized persons other than IRS.