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ITIN application rejection
Hi, yes I am going through the same thing and am awaiting the W-7 support letter, which must accompany the W-8. I was told it would be sent to me when the book began selling. It has but I am still awaiting this document to be sent to my mailbox. The W-7 support letter is all important. Without it IRS application for non US tax will not be accepted. I hope this helps you. x
Hi, Jana. Thanks for responding. I wish I could say it helps, but at least I know now that I'm not the only one. In the end what will you do if you don't get an ITIN? Will you file a U.S. tax return? And how in the world do you do that? Yeesh. The things we suffer for our craft. Haha!
I haven't applied yet but I found this when I started researching (I don't fancy sending original documents to US!) Anyway this could be the letter you need from Amazon.https://images-na.ssl-images-amazon.c...
Rgds Andrew
Yes, Andrew. That is, indeed, the form I sent along with my passport (which I received back in the mail, safe and sound). The form that the IRS deems 'self-generated'. In other words, useless. I have emailed Amazon and Smashwords. I'll post my progress.
You would think a system which charges an approximate amount of tax "incase" you haven't paid it in your own country would be a lot simpler to correct. A UK National Insurance number should show you are registered to pay tax I am sure Canada has some similar reference. This appears to be an IRS job creation scheme!
I can't imagine that Amazon and Smashwords have never had an email from their authors with the very same sentiments. And yet, their advice to the authors they must withhold taxes for remains 'print the generic form'. Hmm. I will await their replies with bated breath.
The IRS have recently changed their rules about the letter from Amazon (well from any US payer really) to require a hand-signed pay document from Amazon. I'm not quite sure how people are getting around this - I luckily got my ITIN about 18 months ago (after 3 attempts and about $300 cost to me for notarised, apostilled copies of my passport) You might want to try contacting your local US embassy, as I heard another author talking about going that route. Otherwise I guess Amazon will come up with a solution in its own good time, so you might want to lodge the question with them and see what they have to say. One thing to remember for all who read this and are trying to get their ITIN - if you fail in an application you have to send everything from scratch when you re-apply, they don't keep anything on record from your previous application, unless you provide them with the relevant information within a few days. This took me a while to figure out.... :-/ Good luck. If you're making any kind of an income out of Amazon it should be well worth your while.
Oh and one other point - even if you get the ITIN you are still required by law to submit a US tax return every year!!! You can do it online though, it's a little tricky, but not too bad.
I am so glad to have read your comments. My application was rejected for the same reason, unsuitable letter from smashwords. I am not re applying at this stage and will take my earnings less 30 percent, not that I'm happy about this though. I will look forward to hearing any progress any of you make on your applications. It was disappointing to have what smashwords described as a straight forward process be anything but.
It certainly is disheartening, isn't it, Theresa? Sharon, I didn't realize that I would still have to file a U.S. tax return. What, then, would be the purpose of torturing ourselves with the ITIN fandango? I seem to recall reading that an ITIN would be issued automatically with one's first U.S. tax return anyway.
I'm still hoping to hear a success story here, and I'll definitely post any communications I receive from Amazon and/or Smashwords for your viewing and my self-flagellation pleasure. :)
I received the W-8 forms, got a notarised copy of my passport and have requested the W-/ support letter several times. To tell you truth, I don't understand much of this at all. I hope someone comes up trumps so that others in our position knows that this system actually works. Thanks, it is good to know I am not alone in this. And I so appreciate the comments on this subject
This is the response I just got from KDP. Hello Carla,
I'm sorry about the inconvenience this issue caused.
We have an official letter that you may submit to the IRS if they request you provide a letter stating that you will be receiving royalties when you apply for an ITIN. You'll need to manually add your name and the date to the letter prior to printing it for submission. We don't provide a letter with a wet ink signature.
Here's a copy of the letter:
https://images-na.ssl-images-amazon.c...
You can find helpful tax information and more details about your options when applying for a U.S. ITIN here:
https://kdp.amazon.com/self-publishin...
I hope this helps. Thanks for using Amazon KDP.
Well,thanks KDP for not reading my email properly. I told them in my first email that I had already sent in their form letter and it was rejected. I've sent them another email, and it's back to the drawing board.
Wow. I received my EIN in January of this year and it was a fairly straight-forward process at that time. I sent the W-8BEN to Amazon in February, got an email that said they received it in March--however my account now shows August--but it does show they received it. I'm expecting my first payment from Amazon in Dec so it'll be interesting to see how that plays out.
Norm Hamilton
Author of The Digital Eye and the soon to be released From Thine Own Well
Indie Writer Book Reviews
Services for Writers
Website
email: Norm Hamilton
How does this impact UK tax system i.e. are the declared earnings demonstrating that tax has been withheld already? How can this be proved? Whether the US Taxman or the UK one gets the money will make little difference but paying tax twice would be annoying. this is my first year of writing so I haven't had earnings to declare yet
Norm, how does an EIN differ from an ITIN? Maybe I should be headed in a different direction. Congrats on your first payment! Let me know if they withheld taxes. I know for a fact that they did with mine, as I haven't got the ITIN yet.Philip, I have no answers for you, but hopefully someone out there will without having to pay a tax lawyer!
This may be a stupid question but when you talk about earnings. Is it one's first royalty payment or yearly income on royalties. I have been told my royalties will be every quarter, in which case I'm in trouble because the last paper the W-7 support letter has not arrived yet after repeated requests.Lol, I apologise if it is indeed a silly question but it may put my mind at rest or put me in a tizzy x
No question is ever stupid, Jana. At least I hope not, or I'm a raving idiot ;)Royalties are reported and paid out quarterly from Amazon and Smashwords. It is my understanding that if you have not received an ITIN from the IRS and then forwarded that number on to Amazon/Smashwords/whichever company distributes your book, your royalties are subject to a 30% withholding tax, which will be assessed and hopefully reimbursed in some amount once you file your U.S. tax return.
Up until now, to my limited knowledge, if a U.S. company pays you but withholds money on your account for tax purposes, you must file a U.S. tax return. I was under the impression that the ITIN would make this unnecessary, and you would file in your own country (provided it has a tax treaty with the U.S.). However, as Sharon wrote above, we are still required to submit a U.S. tax return regardless of whether or not we have an ITIN.
So, to make a long answer shorter, I don't think you're in trouble at all, Jana. You will just receive 70% of your royalties as opposed to 100%. And then you get to hope that come spring, you'll receive some of that 30% back. And you'll be in the good company of at least one other author (me) who hasn't got a clue what the heck is going on.
Please God, send us a Goodreads author who also happens to be an accountant!
Carla, thanks so much for your answer. It helps a lot and It will lead me now to request the W-7 support letter from my self publishing company with headquarters based in America but under the British mother ship. Apparently it is cheaper to run the company in America. Back to the point. If/when I get a reply I will post it here if I think it could help anyone on this thread...thanks again Carla.
No problem, Jana. I'll look forward to your updates. I hope some brilliant mind will swoop into this thread and answer all of our questions. In the mean time, any personal experiences from any other authors will be avidly watched for.
Carla wrote: "Norm, how does an EIN differ from an ITIN? Maybe I should be headed in a different direction. Congrats on your first payment! Let me know if they withheld taxes. I know for a fact that they did wit..."Here's a page that explains the difference. My recollection is that I applied for an EIN as I am a sole proprietor business.
Norm Hamilton
Author of The Digital Eye and the soon to be released From Thine Own Well
Indie Writer Book Reviews
Services for Writers
Website
email: Norm Hamilton
The purpose of the ITIN is to take advantage of any double taxation agreement with your resident country and the USA. It will reduce the withholding tax from 30% down to 5%. You then file your normal tax return in your country of residence. I understand an EIN is for businesses as opposed to individuals, but many self pubs go that route due to constant problems with the IRS rejecting ITIN applications. An EIN takes about 15 minutes over the phone. If you have an ITIN you file an annual tax return in your native country, I believe with an EIN you are expected to file an IRS return as well as whatever you do in your country of residence (can someone confirm that?) So either way you still have to wade through the IRS red tape.
The agreement with Canada takes it to 0%. That is where mine is according to my profile. It'll be interesting to see the deposit in December.Norm Hamilton
Author of The Digital Eye and the soon to be released From Thine Own Well
Indie Writer Book Reviews
Services for Writers
Website
email: Norm Hamilton
The following link is from the US Embassy in my home city. It explains that if you wish to use your passport as identification for an ITIN, you have to have it certified by the US Consulate General in your home city. Also gives a list of what is needed. I hope this helps those who are mystified by the new rules.http://canberra.usembassy.gov/itin_w-...
Carla wrote: Royalties are reported and paid out quarterly from Amazon and Smashwords. It is my understanding that if you have no..."
Actually Amazon pays out 60 days from invoice (ie month-end), so if you have constant sales over the threshold you will get a payment every month. Smashwords in quarterly.
And yes, If you have an ITIN you have to file a tax return using form 1040-NR (if you've paid the 30% for any portion of the tax year you can reclaim the difference depending on your country's tax agreement with the US) but other wise it's just a "paper transaction". Amazon/Smashwords will send you a copy of your earnings for the year (Form 1042-S), showing the tax they have withheld and you submit that with your return. To make matters clear you then also have to submit your normal tax return in your country of residence, but usually you don't have to pay double tax, and get to deduct the amount you've paid to the US directly from your tax liability to your country of residence.
Sharon wrote: "Carla wrote: Royalties are reported and paid out quarterly from Amazon and Smashwords. It is my understanding that if you have no..."
Actually Amazon pays out 60 days from invoice (ie month-end),..."
Thank you very much for this information, Sharon. I had no idea I needed to do this.
Thanks for all the great info everyone. I think I'm going to have to get an accountant. Shite. There go the profits.
Hi Carla, You can ask Amazon to hold your payments until you get your ITIN number. I did when I applied for an ITIN.
Also Smashwords will hold your payments.
I did catch that with Smashwords, Suzanne, but missed the boat at Amazon. And I never thought I'd regret that they have been paying me. I'm going to ask an accountant for some advice, and I'll post whatever tidbits of knowledge I can impart. Thanks so much for your help. :)
After reading this discussion about obtaining an ITIN number, I did a blog post relaying the information.Today, 23 Nov, I received a comment from one of my readers telling me that my information is out-of-date. This person believes that the IRS has moved the office for obtaining an ITIN to Philidelphia!
Now I AM confused.
The following is his comment to my blog post. If anyone can help clarify this info I would be much appreciated.
COMMENT FROM MY BLOG READER
"I received your email regarding getting an ITIN number from the US tax office.
With due respect, your information is quite out of date.
In order to simplify the process, the IRS has moved the office responsible for issuing ITIN numbers to Philadelphia. Further, to assist foreign applicants who call by phone, they start work at 7.30 am, (their time.)
I phoned them, at 7.30 and got straight through.
I was asked my name, address etc. In order to avoid errors, I spelled this out letter by letter.
I was asked if I had completed an W8.BEN, I said no, please complete this for me.
The operator did so,
then I was told my ITIN number. ten days later I received confirmation by mail.
The entire process lasted less than five minutes."
I was not aware you could have an ITIN issued over the phone, I think this person means an EIN?As at July 31 2013 the address for ITIN communications was:
Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342
There is no mention on the IRS website of Philadelphia.
That's the information I have also, A.W. Jill, I'd be thrilled to get that phone number and give it a call. Easy peasy, right? If only...but you never know. If you do have that number, would you mind posting it please?
Thanks A.W and Carla for commenting. I have since re-read instruction from the IRS for obtaining an ITIN at the following link:-http://www.irs.gov/Individuals/Genera...
The address you mention the one I have too, A.W.
I notice it mentions on the link that we can also obtain an ITIN through and IRS-authorised Acceptance Agent. When I clicked on this link, it listed different US States that have agents. One was Pennsylvaia. I suspect that my Blog reader used an agent but doesn't realise it. I've emailed him and asked.
I will try to get the phone number he mentions for you, Carla but in the meantime you might like to follow the above link and investigate getting an Agent. Something I didn't even know we could do until now.
Hi A.W. and Carla. I've had another email from my blog reader who says that he obtained an EIN rather than an ITIN number. So your assumption was right, A.W.Anyway, he attached a copy of a blog post from David Gaughran about his experiences obtaining an EIN. I can send the article to you both if you let me have an email address. It does give the phone number, Carla, which is 1-267-941-1099. David also goes on to say that the EIN will have the same effect as the ITIN but you have to be a self-publishing author who is publishing through your own publishing company outside the US.
Carla wrote: "That's the information I have also, A.W. Jill, I'd be thrilled to get that phone number and give it a call. Easy peasy, right? If only...but you never know. If you do have that number, would you ..."
Carla, here is a copy of David Gaughran's post.
http://catherineryanhoward.com/2012/0...
I had previously looked into the Acceptance Agent route. The one most local to me charges $175 (plus tax, of course) to get the number. I was planning on making that appointment once the Christmas madness is over, but now that I see this link, I must give a great big thank you to Jill!! What a fantastically helpful link. I'm only about halfway through reading it, but when I'm done I'm going to try the EIN route, previously mentioned by Norm. I didn't think I could do it as I'm not a 'company', but after reading David Gaughran's informative post, the EIN might just be for me. I'm still not sure how to recover the taxes already withheld, but it will definitely be a start. I'll post progress, hopefully in synopsis form, but I highly recommend everyone in this position take the time to read through the post. It's lengthy, but chock full of information.
Thank you again, Jill!
Hi Carla, I am in Canada too. We called the IRS and they issued the EIN over the phone, letter in the mail a week or two later. Unfortunately Canadians are hit with a double whammy since the US taxes where the money is earned (the US for your Kindle royalties) and Canada taxes where you live.Once you have your EIN letter, send a copy to Amazon (the Seattle address, it's on their website). Keep the original letter somewhere safe since they will not send you another. You may need it if you are opening an American based bank account for other ebook publishers.
Amazon immediately reversed previous tax withholdings so it went pretty quick from there.
Working with the IRS after that is an entirely different matter.
The letter also gives you the name and deadline for a form you must send and their tax deadline is two weeks before ours so if you're sitting down the last week in April to panic through everything you're already too late. All the IRS forms are online pdf's that do the calculations so it's not too bad but there is a lot to learn!
All the best with this. I'd recommend simply calling them and let them know what you're doing and why you need it. They are really helpful.
Thank you so much for all the great info, Elizabeth. I'll follow your advice for sure.One question (okay, two)...
Are you saying that I'll be taxed over and above the 30% Amazon has already withheld? If so, pardon my francais, but that blows!!! Gah! It's all so confusing. Do you use an accountant?
Thanks again, and thanks again to all others who have shared their helpful tips.
I love my Goodreads community.
Hi Carla, no accountant. I manage to get the forms done on my own since too many others want a bite of my royalties. Once you get the 30% with the IRS sorted out you are still taxed in Canada since our tax system wants a piece of all our income =(a note, it isn't the EIN letter you need to send to Amazon. It's the W8ben and there used to be samples on the kdp website.
Yes, I have those sample letters. I hate taxes, but then I remind myself that I am blessed to have something to tax. So many in this world do not.I hope to have the same success you did, Elizabeth. I'm aiming for 6 a.m. my time on Tuesday morning to place my call the the wonderful people at the IRS.
Wish me luck. :)
HOLY COW!!!!!!That was incredibly easy! The butterflies in my stomach are now doing backflips of joy!
Total time on the phone, including wait time.....less than 7 minutes! I highly recommend the advice from Jill to call at office opening time (0730 Philadelphia time). No waiting. And thanks again for that number, Jill.
Now to wait for the most wonderful IRS to send me my letter, then send a copy of it along with the W8BEN to Amazon and Smashwords. Then CHA-CHING, I get my withholding tax back, and promptly fork it over to the illustrious Canadian government in April. *sigh* Must remember to withhold it from myself.
Do I have this right, Elizabeth?
Carla wrote: "HOLY COW!!!!!!That was incredibly easy! The butterflies in my stomach are now doing backflips of joy!
Total time on the phone, including wait time.....less than 7 minutes! I highly recommend the..."
Congratulations, Carla. That's great news.
Makes me wonder why an ITIN is so ridiculously difficult to get and an EIN so simple?
Thanks, Jill. Couldn't have done it without you.A.W., I wonder the same. No figuring out the wisdom of government, no matter the country.
Thanks so much for this excellent info.Any UK taxpayers here - did you for example register a sole trader / self employed business in the UK and then apply for an EIN? Or did you go the ITIN route?
I went the EIN route. I'm published with Smashwords so they need a second form mailing to them too, but I think Amazon are cool with just the EIN.I think someone already posted the phone method link but here it is again anyway, plus my take on it: http://catherineryanhoward.com/2012/0...
I used this method with no problems at all. I called in via Skype (with a headset, NOT speaker; they don't like that) and yes, had my pen and paper ready. The lady I spoke to was brilliant, even when I was really sketchy about the details.
Read the post in full and be as prepared as you can.
Good luck.
Excellent. Will give it a whirl this afternoon.
And in 9 mins 32 seconds, despite a dodgy connection from Ethiopia, I have an EIN ;-) - thanks Tony, and all the contributors on this thread!
Marc, registering as self-employed is compulsory if you are UK tax resident. If you are publishing more than a one-off book for sale to more than just family and friends (e.g., Smashwords or KDP) then you must register as self-employed even if you have a PAYE job as well. If you had done so you could have filled in a W8-BEN without an ITIN just using the HMRC provided UTR number. Some retailers have not caught up with this Feb 2014 change of IRS policy and still ask for an ITIN, but gradually they are cottoning on. With an EIN you cannot fill in a W8-BEN, but must use a W8-BEN(E).
As a Canadian author, who (yipee!) has actually made a bit of money selling her book, I am struggling with the IRS. I have applied for an International Tax Information Number, and sent along the forms that Amazon and Smashwords supplied generically through their websites. These forms are easy to come by, and all I had to do was plug in my name and send it along to the IRS with my W8 form. Alas, it was not so easy at all. I received notification that they have rejected my forms, stating "Exception 1 pay document is self-generated, invalid. Your publisher needs to write a signed letter specifically to you, on letterhead, explaining their distribution of royalties during the current year."
Has anyone else run up against this in their quest to receive all of their royalties, as opposed to the payment with the gaping hole that is the 30% withholding tax?
I'd really appreciate any experiences you non-US folks could share.