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Old 01-21-2014, 01:07 PM   #126 (permalink)
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So Linden Lab kindly gives us 30 days to fill out the W-8BEN. There you need to have an ITIN.

to get the ITIN (even in best conditions), i'm quoting from the instructions of completing W-8BEN :

Quote:
If you do not have an SSN and are not eligible to get
one, you must get an individual taxpayer identification
Part I
number (ITIN). To apply for an ITIN, file Form W-7 with
the IRS. It usually takes 4-6 weeks to get an ITIN
So, if you want to be able to finish the request within 30 days, you have to apply for the ITIN before it's requested, and that you can not.

It's a trap. Thank you very much America.
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Old 01-21-2014, 01:20 PM   #127 (permalink)
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At the moment nobody seems to know what the 30 day deadline actually means.

It could mean anything from temporary inability to cash out (no different to what happens when they open your case, so why put a deadline?) to something much worse. I've asked LL but they will not respond to any of my questions - I asked that one more than three days ago.

I'm exploring the possibility of acquiring an EIN - I'm on hold with the IRS at this very moment. I will let you all know how I get on.
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Old 01-21-2014, 01:24 PM   #128 (permalink)
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Quote:
Originally Posted by Kat Fetisov View Post
An EIN is an Employer Identification Number - it's an IRS reference for a company (an employer) rather than an individual. If you are an incorporated business in your territory it should be possible to get an EIN from the IRS. I'm not an incorporated business (and I suspect most SL businesspeople aren't), I'm what's known as a "Sole Trader" in the UK - essentially a non-incorporated self-employed person. People like me need to get an ITIN.
I can only speak regarding the Amazon perspective, but a blog post I read regarding royalties from Amazon said that she told the IRS she was a sole proprietor.

Non-US Self-Publisher? Tax Issues Don’t Need to be Taxing | Catherine, Caffeinated

Now in this case the issue is royalties, Second Life isn't royalties so I suspect there may be some key differences with the entities but I don't really see why being a sole trader should be different for Amazon or Second Life in terms of being able to apply for an EIN instead of an ITIN.
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Old 01-21-2014, 01:31 PM   #129 (permalink)
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on a sidenote, maybe it helps? :
other people a other places have that problem too, asked the IRS and got a response:
Need an ITIN number for a W-8BEN to work for a US agency? (Business issues)
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Old 01-21-2014, 01:34 PM   #130 (permalink)
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My thoughts on getting an EIN at the moment are basically this:

I'm on hold with the EIN department at the moment and I'm going to try to get an EIN for my UK business. I'm a Sole Trader, which is basically just someone who's self-employed and does their own taxes, but it's a valid business type in the UK and I believe it should be eligible for an EIN. We'll see when they answer the phone (15 mins into a 30-60 minute wait time - sigh).

Everyone who does business in SL should have some kind of local incorporation for tax purposes, so if they will accept a UK sole trader it looks like EINs will be the best solution since ITINs are unobtainable.

If my sole trader business is not eligible for an EIN my plan is to register as a Limited company. From past business I have a couple of unused limited companies I can access for this purpose but you can buy a "shelf company" for £50-£100 (depending on what you get in the package). That's the quickest way to becoming a UK limited company, though it will come with some paperwork overhead (annual return to Companies House).
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Old 01-21-2014, 02:31 PM   #131 (permalink)
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Might not need an ITIN after all?

Need an ITIN number for a W-8BEN to work for a US agency? (Business issues)
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Old 01-21-2014, 02:47 PM   #132 (permalink)
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I've just got off the phone with the IRS and the good news is that I have acquired an EIN. I think this is definitely the way to do it since getting an ITIN is so hard.

By contrast this was so easy I half expect it to be a trap.

I called them on +1 267 941 1099 and, after holding for an hour and a quarter, spoke with an operator who took down my business details (name, address, contact number and a few other things) and then issued me an EIN there and then.

I think my mistake in this was to regard my dealings with Linden Lab as being done as an individual, but of course they aren't. I make money from SL as a business, so that's how I should have approached it.

For anyone who wants to follow in my footsteps here you'll need to make sure that you are a legal business in your local territory, then call the IRS number above and hope the queues aren't too long. I recommend calling from Skype to keep the costs down, but I have information from other sources that states they won't talk to you on a speakerphone, so you'd better break out the mic and headphones.

Now I should be able to complete the information that LL requires, with the small exception that I've just realised my passport's expired, so I'll have to wait to get a new one of those now
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Old 01-21-2014, 07:55 PM   #133 (permalink)
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I've had a reply from the Lab about this. It's left me a little puzzled.

They said that I don't need an ITIN or an EIN, just my UK National Insurance number (that's the UK's tax reference code for an individual; the equivalent of a US SSN). This is good news because it makes everything nice and simple but it leaves me puzzled because every other US based business platform (yeah, please forgive the pretentiousness of that term - you know what I mean; Amazon direct publishing, all the other e-book publishers, stock image sites etc) that asks users to file a W8 variant require an ITIN or EIN or they'll withhold US taxes from your payouts.

I hope that LL are in proper compliance because what seemed a big problem earlier today has now vanished. I can't help but feel that acquiring an EIN hasn't been a wasted effort since I can't know how things will change in future. The IRS is coming down harder and harder on this kind of commerce, so having an EIN in reserve gives me some reassurance I'll be able to deal with any stricter requirements that may come along later.

Coupled with the way the IRS have made ITINs harder and harder to get lately it seems like getting an EIN now may be a good hedge against the future. If anyone does feel like getting one, and it's only a phone call away, I've more details on my blog here: The plot thickens. Or possibly thins a little. | Kcreations

I wish the guidance from LL for non-US businesses had been a little clearer; I could have saved myself a deal of hassle.
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Old 01-21-2014, 08:06 PM   #134 (permalink)
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I assume that if you leave the ITIN number in blank, although you fill up the rest of the information, Linden will withhold the 28% of your withdrawal until information is updated.

So basically (if my previous statement is true) the process for non US citizens or residents is just a trap to get a slice of your income.

There is not an agent in my country so it's very unlikely that I can do this process when Linden requires it.
the official Japanese tax site says that you MUST leave that blank..

if LL withholds after that then it is in conflict with the tax treaty.
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Old 01-22-2014, 06:27 AM   #135 (permalink)
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I think the W-8BEN form is just held by Linden Lab as confirmation that you are from a double taxation treaty country.

My RL fiancée filled it in the other day and only completed the compulsory parts (ITIN blank). After filling it in and sending her ID details, she got a response from LL saying thank you and everything will resume as normal the next time she processes credit.

Quote:
Thank you for responding to our request. We have received and reviewed your documents, and you have completed all the necessary steps. Any pending process-credit requests will be handled normally when payouts resume tomorrow.
ETA:

Here is an example of one for an individual in the UK.

http://www.alliancetrustsavings.co.u...structions.pdf

If you are self employed or making pocket change, that is the way to fill it out to satisfy LL.
If you are operating as a company then this example doesn't apply.



Also, if you have a look closely you will see the form can be used to...

Quote:
Note: These entities should use Form W-8BEN if they are claiming treaty benefits or are providing the form only to
claim they are a foreign person exempt from backup withholding

Last edited by Sione; 01-22-2014 at 06:40 AM.
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Old 01-22-2014, 07:57 AM   #136 (permalink)
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Quick questions about the W-8BEN ...

From what I know if checking line 3 as "individual", line 2 should be left blank as individual is not an incorporation or organization but it's mandatory to fill line 2 on the EchoSign form so what is supposed to be filled in there? My guess is just the country of residence but I'm afraid by filling it it will be considered an incorporation / organization so line 2 and 3 will contradict (declaring "indivdual" on line 3 but "incorporation/organization" by filling line 2)

As for the photo ID, what format and size should it be used?

What about the name of alts, does "which transact with linden lab" mean only alts which also sells/buy lindens or all alts even if lindens are not bought/sold through that account?
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Old 01-22-2014, 09:19 AM   #137 (permalink)
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Quick questions about the W-8BEN ...

From what I know if checking line 3 as "individual", line 2 should be left blank as individual is not an incorporation or organization but it's mandatory to fill line 2 on the EchoSign form so what is supposed to be filled in there? My guess is just the country of residence but I'm afraid by filling it it will be considered an incorporation / organization so line 2 and 3 will contradict (declaring "indivdual" on line 3 but "incorporation/organization" by filling line 2)

As for the photo ID, what format and size should it be used?

What about the name of alts, does "which transact with linden lab" mean only alts which also sells/buy lindens or all alts even if lindens are not bought/sold through that account?
Just put the country in. If you don't submit the form you will have money withheld.

For our one we just took a photo of a passport and another photo of a utility bill with the address on it. No specific size, it is only kept on file as proof. We attached them to the support ticket as A4 PDF's.

Put the name of the alts on the related support ticket. The form is only for the avatar named in the email you received from LL.
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Old 01-22-2014, 09:42 AM   #138 (permalink)
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Thanks Sione

Also does anyone know the income we generate through selling creations on Second Life is classified under dividends , interests or royalties?
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Old 01-22-2014, 09:44 AM   #139 (permalink)
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most likely dividends? As it's paid out by Linden Lab?
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Old 01-22-2014, 10:23 AM   #140 (permalink)
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most likely dividends? As it's paid out by Linden Lab?
Dividends are what are paid out to shareholders.

If you read the ToS carefully it is actually closer to royalties if you make your income as a content creator. You give LL the right to distribute your items to other residents. When you upload them, they are LL's assets and you get payment as a result of LL's other customers using them.

If you make money playing the Lindex or as a land baron I guess it may be interests?
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Old 01-22-2014, 10:37 AM   #141 (permalink)
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Royalties seems to be the closest applicable, especially with the new ToS where LL claims to have all rights to all content. Then they are paying royalties for distribution of my licenses.

Speaking of EIN, not everyone can drum up a company just like that, in every country.
Here we have pretty relaxed hobby taxation rules, but even if the hobby brings in substantial income one year, it doesn't automatically qualify as income for a company. It's pretty strict like that, because a company can claim lots of different tax cuts, that a hobby isn't qualified for.
An example, is that you couldn't form a company around income in SL alone, because it's not foreseeable sustainable and long term enough (SL could close tomorrow) as business plan. So it doesn't matter if the income is 10 k or 20 k, it's still a hobby.
It could be part of the income for a company, but not it's only income.
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Old 01-23-2014, 12:11 PM   #142 (permalink)
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Inara Pey has got a response from Peter Gray of Linden Lab regarding some of the concerns people have over these forms:

Quote:
Hi Inara,

The users whom we have asked to submit the W8-BEN need only complete the fields in Part I, #1-5 (which does not require an EIN nor an ITIN).

We regret the confusion this form has recently caused for some users. To help avoid this confusion moving forward, we’ve uploaded a new version of the form that allows users to complete only the necessary fields and will update the messages sent to users when this information is requested.

Best,

Peter
Second Life tax requirements: form W-8BEN | Living in the Modem World
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Old 01-23-2014, 10:59 PM   #143 (permalink)
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Just got the request for ID for Alliez Mysterio. I filled out the forms back in November for the both of us, Alliez and Sue Peregrine. Photo ID? Why not ask for it back then??

Quote:
We collected this information from you at the end of last year when you submitted your W8-BEN or W9 tax form through EchoSign.

In addition to the form itself, we are required to obtain a copy of your government-issued photo identification (ID). The information on the ID must be current (i.e. not expired) and must match the information you submitted on the form.
This is a mess. Do I submit her ID for last year that expired a little while before her death (which they already have on file from something else a couple of years ago!) along with her death certificate? Do I send my ID because now it's my account, even though it's for tax year 2013? If I do that, it would make any cash outs of Alliez' become mine, which would adversely affect not only my taxes, but my son's college financial aid as well. Like I said, a mess.

I have NO issue with providing the documentation asked for, but come on! They have to get their act together, and soon. Every time I think things are settled, something else comes up. Sorry, but I'm pissed off.
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Old 01-23-2014, 11:54 PM   #144 (permalink)
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Did she leave her account to you in her will?
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Old 01-24-2014, 09:17 AM   #145 (permalink)
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Did she leave her account to you in her will?
Yes, all avatar accounts and her sims (dAlliez Estates). In addition she had already added me to her account legally as an authorized user, empowered to make any and all decisions regarding the accounts, up to and including buying and selling sims and cash outs to her PayPal account. I'm also on the PP account.

LL has to get their act together. They knew about the ID requirement. That should have been stated in the first contact back in November, not almost 3 months later.

Cash outs are once again on hold. Does that include the one I requested BEFORE receiving this email? If it does, that's just wrong. Many depend on them, it's their main income. Thankfully, I'm not in that position. Perhaps honor current cash out requests, but any new ones are put on hold until the ID requirement is fulfilled?

The whole thing reeks of "oh noes, the IRS says we have to do this!" Then a couple of months later, "oh noes, we asked for the forms, but we forgot to ask for ID!"

As I said, I have no problem with providing the info. Alliez was one of the relatively few who claimed her SL income. She would take on most anyone or thing, but not the IRS, LOL! But Linden Lab seriously needs to get their act together. Yeah, I know, a pipe dream.
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Old 01-24-2014, 04:45 PM   #146 (permalink)
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I've been having a really bad experience as well.

I've made more than pocket change with my SL estate, and as such, I've always routed it through my S Corporation.

Why? Because you can't have, say, greater than 50,000 a year come into your personal bank account without paying appropriate taxes. I put in work to build my SL business, and that means wage taxes. Which I have paid. Just try telling the IRS that you had money rain out of the sky for no reason and see what happens ~ that's most certainly a bad, bad idea.

So I get a W9 request thursday. It's the sort of thing I get all the time in the course of other business, before SL even accepted residents. Except they doctored up the form horribly, and locked it on Individual / Sole Proprietor, and SSN through this weird electronic form overlay. I use an S Corporation with an EIN.

No big deal except they say if I don't fill out THAT form, locked to the wrong tax information fields ~ my account goes on hold in 30 days.

Seriously, what is this. A W9 takes 2 minutes normally. I've responded to the ticket yesterday, no answer, the clock's ticking. Billing stonewalls me, I can't talk to a supervisor. Concierge won't let me talk to a supervisor either.

I can send a W9 and whatever info, certified mail or however to their CFO... but will it remove the threat of my account being put on hold if I do that? I wouldn't count on it, and getting them to respond in a timely fashion is impossible.


I'm very upset with:

1) the incompetency of trying to force me to fill out a W9 incorrectly,

2) the fact I can't get anyone on the phone for something that should be a 5 minute thing

3) the fact that they are threatening to put my account on hold over it.


This is all *completely* unacceptable.

I'm giving it a few business days tops. Rod got a head's up about it on his gmail just a bit ago; I figure I owe him that much, to let him know how upset I am. I've never bothered him before.



I fully expect this *will* resolve, even if I have to drive up there with a W9, articles of incorporation, business licence, seller's permit, my California Driver's Licence and US passport.

In the off chance that this stupidly drags on for a month, I've been giving Caledon residents my RL name, corporation info and so forth; basically offering it and also giving it to those who ask. It's an integrity thing. Let's hope it doesn't drag on even *close* to that long.

Does anyone have that Peter Gray, Global Communications guy, contact info?

Des
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Old 01-24-2014, 04:59 PM   #147 (permalink)
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Rod's out....see General Discussion for thread..
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Old 01-24-2014, 05:01 PM   #148 (permalink)
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I'm giving it a few business days tops. Rod got a head's up about it on his gmail just a bit ago; I figure I owe him that much, to let him know how upset I am. I've never bothered him before.Des
Hate to break it to you Des, but you might want to check out this thread: Rod Humble Leaves Linden Lab?
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Old 01-24-2014, 05:36 PM   #149 (permalink)
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LL has to get their act together. They knew about the ID requirement. That should have been stated in the first contact back in November, not almost 3 months later.
There seem to be two circumstances under which LL ask for this info, one is for the IRS and the other apparently has something to do with the patriot act, they have different circuit breakers for when they get applied.

Patriot Act Letter from LL? - Second Life

I'm not sure why there are two processes though, it seems somewhat odd.
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Old 01-24-2014, 05:47 PM   #150 (permalink)
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Quick update ~ situation diffused, I think.

Here's the response I got:

Quote:
Jan. 24, 2014, 3:06 p.m.
Tommy Linden

Greetings Desmond Shang,

Applicable law requires that we obtain and retain identification information for residents who reach certain volume and/or amount thresholds for Process Credit Requests. Although the information requested is similar to the information needed for income tax purposes and, for some residents, can be used for both purposes, we may need supplemental information or documentation for the Process Credit request.

Regards,
Linden Lab
So it seems they just want my SSN to identify *me* ~ and not use it as an erroneous W9 form for tax purposes.

Eh, I'm not keen on giving anyone my SSN without damn good cause, but ehhh... fine, I can see the concern regarding money laundering or whatever. I made real clear in the comments of the support case what my corporation and EIN are, and left clear records that their form _does not_ represent where the funds are going for tax purposes.

I'll take care of the form later, and pop into SL to reassure Caledon residents first.

As for Rod... well, best of luck to him, but Caledon residents come first. I'll worry about that thread later; it's a matter of priorities.

* * * * *

Edited to add: I'd hate Rod's job, but if anyone wanted to talk me into fixing Second Life, my price for one year is... ONE MIIIIILLION DOLLARZ. For real. But don't call me direct, Linden Lab, you can leave a ticket and I'll worry about it later.

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