Tuesday, May 28, 2013

IRS Crap for UnAmerican Authors

This blog post started life as an email to a fellow author who, as it turned out, had already taken all the steps outlined below. 

I forgot about it until yesterday, when I saw a fellow Canadian on one of my author groups lamenting her rejection.  She was trying to secure an ITIN from the IRS, and it didn't go so well.  That's when I remembered this email and figured it might save a lot of "International Authors" a lot of time.

I'm not a tax expert, so I can't field any questions on the topic, but I can share MY experience.  If you're a non-American author who requires an American taxation number to fill out a W8-BEN form, who knows?  My experience might help in your journey:

Okay, I'm Canadian, as you know.  Until now, I've only ever had a Canadian SIN--no affiliation with the American taxation system at all.  Recently, my American publishers have been telling me the IRS is cracking down on them when it comes to that 30% withholding tax they're supposed to impose upon people like us.  A few publishers said that if I don't secure an American taxation number issued by the IRS, they're going to have to start withholding 30% of my royalties. One publisher has told me they're not even going to do that--they're just going to take my books off the market.

So YIKES, right?

I've been putting off trying to get an ITIN for like 6 years now because I've heard the process is arduous. I've looked at the forms. They make almost no sense to me.  I know why people hate the IRS. Wow.  Also, I've heard from a lot of authors that they've been rejected after submitting their ITIN applications, and the process takes at least 4-6 weeks.  It's just mind-numbing.

So, I read this blog post (sent to me by Selena Kitt: http://catherineryanhoward.com/2012/02/24/non-us-self-publisher-tax-issues-dont-need-to-be-taxing/ ) by an author who had gone another route: applied for an EIN instead of an ITIN (essentially, a business number instead of an individual taxpayer number).  It blew my mind when I realized this could work for me.  

All it takes is a phone call. I did it today: I called the IRS, they asked me questions, and they gave me my EIN over the phone!  Under type of business I said self-publishing, and for product I said ebooks.  I applied as a sole proprietor and gave my name as a business name.

If you need an EIN, the number to call is 267-941-1099.  The prompts were weird and I ended up choosing something irrelevant and being transferred, but that guy told me I should have selected option 3 for International EIN.

I was on hold for 20 minutes, but the interview process took maybe 5 minutes and it was easy. They ask you questions from this form (SS-4): http://www.irs.gov/pub/irs-pdf/fss4.pdf  I had that form filled out on my computer screen and basically just read the answers off to her.  There's more info here: http://www.irs.gov/pub/irs-pdf/p1635.pdf

By the end of the call she'd given me my EIN right over the phone.

Hope this helps. I've heard of way too many writers being turned down when they apply for an ITIN.  An EIN is the way to go, yo!



  1. I know you can't answer the question, but throwing this out there -- can you use the EIN with your publisher? That's the only thing that popped out at me over at the thread - a lot of those folks seem to be self-published, which makes you your own publishing company.

    My advice for the ITIN if anyone is told they have to get one - skip the visit to the notary public and SEND ORIGINALS.

    I wondered what made my attempt to get an ITIN so painless, and I think it's because I just sent originals everything. I went to the DMV and told them I needed a new license because I lost mine. BOOM. Then I ordered a birth certificate. BOOM. Popped them both in the mail, got my ITIN about 2 weeks later, and they sent back my license and birth certificate a few days after sending the ITIN.

  2. In keeping with "speaking from my experience," I've used the EIN in paperwork with all my American publishers. The W8-BEN (or whatever it's called) has an ITIN box and an EIN box, and you can check either.

  3. Ah. Maybe I'm thinking of another form, but all I could remember was the SSN & ITIN boxes for checking off. Been so long since I filled one out.