IRS, US tax Confusion: Offshore freelancers don’t need ITIN

I had been trying to get my individual tax id from IRS since January because the com­pany i’m wor­king for told me that I needed it in order to get full payments, other­wise they had to withhold 30% of my mon­thly fees according to IRS regulation. People said it would be a long process, and they are right!

After mon­ths exchanging emails with a tax con­sul­tant, get­ting the required papers from the com­pany & from SSA office in the US embassy in Manila, sen­ding my pass­port to a friend in the US to get a notarized copy, etc., I received a let­ter from IRS saying that my application was rejected because my pass­port copy was not properly notarized. I was puzzled so I asked my manager in the US to call IRS to get a clarification. After about an hour of get­ting tran­sfer­red from one IRS agent to another (it would cost me a serious amount of $ if I called them myself), he finally got to talk to someone who could ans­wer our inquiry. The ans­wer is … I don’t need/qualify for ITIN because I per­form my work in Indonesia, not in the US. The agent refer­red to this IRS publication, specifically the part that reads:

Quote
Services per­for­med outside the United States. Com­pen­sation paid to a nonresident alien (other than a resident of Puerto Rico, discus­sed later) for  services per­for­med outside the United States is not con­sidered wages and is not subject to withholding .

So if you’re wor­king remotely for a US com­pany and the com­pany asks for your ITIN, show them the publication.

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This entry was posted on Friday, August 5th, 2011 at 2:45 am and is filed under Work. You can follow any comments to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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