Don’t pay US tax - how to get an ITIN

If you’re having a book published in America but you're not a US citizen, you’ll be upset to learn that your publisher will withhold a thumping great 30% of your money in tax. Odious as this practice is, don’t start burning the Stars & Stripes just yet. You CAN get your money back AND prevent them taking any more off you.

What you need is an Individual Taxpayer Identification Number from the US Internal Revenue Service. You’ll find articles online about how hideously difficult it is to get one of these. It isn’t difficult at all – so long as you go about it correctly, know how to fill in the form, and have the right documentation. There are some how-to articles online, but the IRS changes its forms and its requirements from time to time, and you’ll need the most up-to-date information.

Here’s how to do the whole thing without breaking sweat.

(This is based on a UK citizen applying from the UK. If that doesn’t apply to you, you’ll need to find another source of advice.)

To get your ITIN, you need a form (which you can download), personal ID and proof that you’re going to be paid by a US-based company. You could post all this stuff off to Austin, Texas, but it’s best to go to the IRS walk-in service at the US Embassy in London to submit your application. They’re extremely fussy about every detail being right, and the staff there will check it all and put your application through to Texas. This will save you having to send off your precious ID documents; the embassy staff will verify and copy them. But don’t rely on them to help you with your form.

Here’s everything you need to take with you and how to fill in the form … Remember – take originals, not copies of everything.

From your publisher

Proof that you are due payment. You need to be very careful about this. The IRS may be willing to accept your signed contract (provided it stipulates that you will be paid), but don’t rely on that. The IRS guidelines stipulate that your proof must include a specific statement that you need an ITIN. The exact regulation is:

1(d) To support Exception 1(d), submit documentation in the form of a signed letter or document from the withholding agent, on official letterhead, showing the individual’s name and evidencing that an ITIN is required to make distributions to the individual during the current tax year, which are subject to Federal tax withholding and/or IRS reporting requirements.

Ask your publisher to provide you with a letter, and take it with you to the Embassy. Take your contract and any related letters as well.

Identification

You just need your passport. That’s all. It proves a) that you’re not a US citizen and b) your identity.

If you haven’t got a passport, you will need two items:

  • birth certificate (nationality)
  • a photo driving licence (identity)

If you haven’t got either of those, try consulting the IRS’s instruction booklet (warning: 36 pages of bureaucratic verbiage).

Form W7, completed

This is the main bit. The ITIN application form. Make sure you download the latest version of form W7 from the relevant page on the IRS website. They change the form quite frequently. Even if you’ve been sent a copy by your publisher or agent, go and check if there’s a newer one.

Now, here’s the crucial bit. The form must be filled in exactly correctly, and it’s virtually impossible to understand without simple, direct instructions (the IRS instructions are as incomprehensible as the form).Fill in form W7 like so (if your computer has a suitable PDF viewer, the form is set up so you can fill it in onscreen, then print it):

  • Top section "Reason you are submitting Form W-7”:
    • tick box “a” ("Nonresident alien required to get ITIN”)
    • tick box “h” (“Other”)
    • line beside box “h”: write "Exception 1(d) - Royalty income”
    • line below box “h”: write “United Kingdom” for treaty country and “12” for treaty article number
  • Date of birth: Remember to put it in month-day-year format.
  • Box 6b, “Foreign tax ID (if any)”: You should be able to get your Unique Taxpayer Reference from your account page on the HMRC site or from correspondence with HMRC.

Everything else on the form should be self-explanatory.

Visiting the US Embassy

At present it’s in Grosvenor Square, London, but is moving to Wandsworth in 2017.

Some people have described queuing for ages at the Embassy for their ITINs. Taking this on board, I turned up stupidly early, worried that all the people turning up for visas would create a massive queue. They did, but it made no difference to me – the queue for the IRS outside the Embassy is separate. In fact, there was no queue – just a chap in a booth who told me that the IRS didn’t open until 9:00 am. I wandered around Mayfair for a while and came back. At 9 o'clock I went in, through security, and round the side of the building to the IRS entrance. I was first in, had my paperwork done and was out again within 20 minutes.

They’ll tell you that your ITIN will be issued in 6 to 10 weeks. Mine came through in just under 6 weeks.

Doing it all over again

Thought they’d let you get away that easily? Ho no. Your ITIN has a limited lifespan. It lasts 5 calendar years, including the current year. So if you get one now (July 2014), for example, it will expire 31 December 2018.

As far as I’m aware, the US is the only country in the world that does this to foreign nationals. All the rest either just pay you your money or have a system where you prove that you’re a UK taxpayer, and that’s that. Every time I hear an American complain about “big government” I wonder if the real problem is their lumpen, obstructive bureaucracy.

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The US Embassy, Grosvenor Square. This queue is for visas. There was no queue for the IRS on the day I went.

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Remember not to take any of these items with you. They will be confiscated. For full list of prohibited items see here.


© Jeremy Dronfield 2017