I have a friend who was given a social security card that's marked "invalid for employment"...She wants to start her own business and wants to pay taxes. Should she apply for an EIN number or those ITIN numbers for non-immigrants?.. thanks
Explanation for jfrancus and personal1 - The EIN (Employer Identification Number) is for business not for a person. As far as I know there is nothing illegal about starting a new business in the U.S. even when the prospective business owner doesn't have EAD.
In order to obtain EIN you need to file IRS Form SS-4 and send it by fax (fastest way) and the number should be available next day. Look in the instructions. This number will allow you to open a BUSINESS bank account, that is in the name of business - not your own name and it should be used in billing and preparing tax returns. This number should be obtained regardless of the legal structure of the business. It doesn't matter whether it's a sole proprietorship, partnership or corporation (although it needs to be declared to the IRS). The best way to start this process is to register the TRADE NAME with the state and then send the Form SS-4 to IRS.
social security card that's marked "invalid for employment"...
What part of invalid for employment do you or your friend not understand
YOu friend is not authorized to work in the united states. This person was approved probably as a student visa f-1 or some other visa that is not allowed to work without authorization.
Verbalist
starting own business is Self employment. Employed by self. not authorized to work in usa.
EIN number must be tied to/referenced to social security number of individual.
YOu can not file an individual 1040 tax return using an Employer identification number (EIN)
Itin NUMBER CAN now only BE OBTAINED when a person files tax return. instructions can be found at irs.gov
Bottom Line.. if your friend starts her own business, she will be thumbing her nose at the immigration laws. Please.. dont you think everyone who comes here on visitor/ student visa wants to work? this is reserved for immigrants or nonimmigrants with special permission.
Provisons such as E1/e2 visa are availble for people tthat wish to invest in a business in this country. it has strict criteria.
Originally posted by personal1: I have a friend who was given a social security card that's marked "invalid for employment"...She wants to start her own business and wants to pay taxes. Should she apply for an EIN number or those ITIN numbers for non-immigrants?.. thanks
It depends on what type of business structure your friend wants to be. If it is a single member LLC or a sole proprietorship, then one may not need an EIN. If it is a partnership or multi member LLC, corporation, or S corporation, then a EIN will be required.
As for the ITIN, she will not be eligible since she has a SS card. She would need a work authorizatino to work for an employer. She will also need to check with the state regulations whether she could operate a business license given whether she is a resident of the state or not. You need an attorney who specializes in business organization or contract law for this.
"Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence." John Adams on Defense of the boston Massacre
Originally posted by 4now: social security card that's marked "invalid for employment"...
What part of invalid for employment do you or your friend not understand
YOu friend is not authorized to work in the united states. This person was approved probably as a student visa f-1 or some other visa that is not allowed to work without authorization.
Verbalist
starting own business is Self employment. Employed by self. not authorized to work in usa.
EIN number must be tied to/referenced to social security number of individual.
YOu can not file an individual 1040 tax return using an Employer identification number (EIN)
Itin NUMBER CAN now only BE OBTAINED when a person files tax return. instructions can be found at irs.gov
Bottom Line.. if your friend starts her own business, she will be thumbing her nose at the immigration laws. Please.. dont you think everyone who comes here on visitor/ student visa wants to work? this is reserved for immigrants or nonimmigrants with special permission.
Provisons such as E1/e2 visa are availble for people tthat wish to invest in a business in this country. it has strict criteria.
Actually 4now, one does not need an EAD to work independently in the US. It will depend on whether the person is considered a resident of the state in order to file article of incorporation, partnership, or an LLC. And decond, it is not necessary ot have an SSN or ITIN to obtain a EIN in some circumstances. A foreign coroporation which opens a branch office in the US will not get an ITIN, but will get a EIN, as an example. But I know this is not the case with the OP. But still, it depends on whether the OP is considered a resident of that state, which may or not be indicative of their immigration status.
"Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence." John Adams on Defense of the boston Massacre
The Precise answer to this posters question. is: She does not need either because she already has a social security number. If person is going to have employees working in the business , only then will they need to get an EIN to report wages. Legally your friend cannot do either as her social security card is not valid for working in usa, unless special permission or other authorized document accompanying the ss card that would allow authorization to work.
[quote]It is not neccesary to obtain EIN in some circumstances. A foreign coroporation which opens a branch office in the US will not get an ITIN, but will get a EIN, as an example. But I know this is not the case with the OP.[quote]
Eaxctly Hudsom, and you know I know all this that you stated. so why would I try to make it complicated or confusing for the poster withh rhetoric that does not eeven pertain to them It is not my style... and you know that ITIN is reserved for individuals not corporations. so it was not relative to this thread.
Hudson. anybody can work illegally wheter it is with a company or starting their own business as self employment. can they do it legally.... NO is the answer. will they do it anyway? YES! We can tell poster how to form this and that to get set up in company blah blah as verbalist offered some advices... but bottom line is this person's visa has not been approved for working in the usa in any capacity.
[quote] Actually 4now, one does not need an EAD to work independently in the US[quote]
hmmmm Last I checked it was illegal to work in usa without authorization... self employment is employment. I will learn something new today and stand corrected if you show me that is ok with uscis.. so when the f-1 student goes before the judge and tells him.. no sir i wasnt working illegally.. I was working for myself.. and judge is going to say to him.. oh im so sorry to have detained u .. thats ok and thats no problem. yea right
So show me...im waiting
This message has been edited. Last edited by: 4now,
Originally posted by 4now: The Precise answer to this posters question. is: She does not need either because she already has a social security number. If person is going to have employees working in the business , only then will they need to get an EIN to report wages. Legally your friend cannot do either as her social security card is not valid for working in usa, unless special permission or other authorized document accompanying the ss card that would allow authorization to work.
[quote]It is not neccesary to obtain EIN in some circumstances. A foreign coroporation which opens a branch office in the US will not get an ITIN, but will get a EIN, as an example. But I know this is not the case with the OP.[quote]
Eaxctly Hudsom, and you know I know all this that you stated. so why would I try to make it complicated or confusing for the poster withh rhetoric that does not eeven pertain to them It is not my style... and you know that ITIN is reserved for individuals not corporations. so it was not relative to this thread.
Hudson. anybody can work illegally wheter it is with a company or starting their own business as self employment. can they do it legally.... NO is the answer. will they do it anyway? YES! We can tell poster how to form this and that to get set up in company blah blah as verbalist offered some advices... but bottom line is this person's visa has not been approved for working in the usa in any capacity.
[quote] Actually 4now, one does not need an EAD to work independently in the US[quote]
hmmmm Last I checked it was illegal to work in usa without authorization... self employment is employment. I will learn something new today and stand corrected if you show me that is ok with uscis.. so when the f-1 student goes before the judge and tells him.. no sir i wasnt working illegally.. I was working for myself.. and judge is going to say to him.. oh im so sorry to have detained u .. thats ok and thats no problem. yea right
So show me...im waiting
The is not just who does and does not work illegally, the issue is what type of work, dependent or independent personal services, comply with the employment authorization document. When you read § 1324a, it refers "work" to employment; that is dependent personal services. And with independent personal services, US immigration code does not provide any specifics one way or the other. To complicate matters, length of stay and the type of visa may dictate if someone can work independently. For instance, a professional gambler from Monte Carlo comes to the US and participates in a gaming tournament. A professional gambler comes on a B2 visa. The gambler wins some earnings. Did the gambler violate work authorization?
Or how about an individual from Europe who speaks at conventions. The person comes on a B2 visa, speaks at several events, gets paid for those services, and then returns home. When the person went to the embassy to obtain the visa, he tells the foreign service officer of the intentions and still obtains the visa.
A person comes to the US on a H1b visa. The spouse is on the H4. While in the US, the person on the H1b buys some houses and rents them. The person then forms a partnership for the rental activity and puts the spouse as a partner. Both spouses receive partnership income subject to self employment tax. When the H1b adjusts for the green card, everything goes smoothly.
A person comes to the US and forms an LLC. That person then elects for the LLC to become a corporation. As an officer of that corporation, the business unit must pay wages to its officers and/or employees. The person files with the corporation a form electing for effectively connected income per the tax treaty with the country the individual resides in. That means a W2 will be issued for said wages with an ITIN number on it. The person eventually comes on a EB-5 visa. USCIS adjusts such status without any problems or references to the forming of the corporation.
An individaul comes on a F visa. That person invests #8000 in the stock market. The person begins day trading and makes the proper election with IRS. Thus, any income and expenses will go on the Sch C of form 1040. Sales of such securities go on the form 4797. When the F visa holder adjusts to H1b, USCIS allows the adjustment.
In each scenario, a person receives compensation, but does not need a employment authorization document because such work does not violate § 1324a. Self employment income, or independent personal services, is not exactly defined with immigration code. What immigration do concentrate on is dependent personal services because that tends to displace American workers more than independent personal services.
"Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence." John Adams on Defense of the boston Massacre
chew on these for awhile hudson I will be back later..
quote:
Or how about an individual from Europe who speaks at conventions. The person comes on a B2 visa, speaks at several events, gets paid for those services, and then returns home. When the person went to the embassy to obtain the visa, he tells the foreign service officer of the intentions and still obtains the visa. [quote]
and if person collected 50k in speaking fees, you say the uscis doesnt care?
[quote]A person comes to the US on a H1b visa. The spouse is on the H4. While in the US, the person on the H1b buys some houses and rents them. The person then forms a partnership for the rental activity and puts the spouse as a partner. Both spouses receive partnership income subject to self employment tax. When the H1b adjusts for the green card, everything goes smoothly.
The key words in this scenario is rental activity. the income is most likely treated as passive activity. I do not believe for a second that if there was a K-1 for H-4 souse from a business that was generating income subject to self employment tax that it would be questioned. (and if not, then they are not doing their job or do not know how to do their job.)
[quote]That means a W2 will be issued for said wages with an ITIN number on it. The person eventually comes on a EB-5 visa. USCIS adjusts such status without any problems or references to the forming of the corporation.[quote]
How did this person obtain an itin number for a w-2 without filing a tax return to begin with as that is the new procedure??
(again... if uscis is not denying or making an issue out of this, either IO is not doing his job)
[quote]Self employment income, or independent personal services, is not exactly defined with immigration code. What immigration do concentrate on is dependent personal services because that tends to displace American workers more than independent personal services.[quote]
Again, if this is the case, then they are doing the american worker an injustice b/ce look at how many american companies fired their employees in order to hire them back as independent contractors. If this is the case , it is just one more way of getting around hiring an american worker and according to you they can legally beat the system by hiring a person whose social security card that says"not valid for employment purposes" Thus , serentipiously taking a job that could have been filled by a person that is validated for work. Therefore this policy allows for displacing american workers.
[quote]For instance, a professional gambler from Monte Carlo comes to the US and participates in a gaming tournament. A professional gambler comes on a B2 visa. The gambler wins some earnings. Did the gambler violate work authorization?[quote]
Did he? Why should he come here on a b2 for such event? he will have to report the earnings as supplied by the casino to the irs. I would think that he has a special visa like an entertainer that was going to be paid for a concert in the usa. special provisions are made for the money that will be earned, as they are working here.
So let me see if I get this.. according to how you interpret.. if an employer hired an expired ead or accepted invalid for work soc sec card.. he is in the wrong with uscis.. but if the employer decided to hire the same persons as an independent contractor, he did not do anything wrong in the eyes of uscis because he is being self employed. Therefore, all the illegal aliens or otherwise unauthorized aliens should just be independent contractors when they work and they will not be considered doing anything wrong per uscis standards... This is your stand.. correct?
So let me see if I get this.. according to how you interpret.. if an employer hired an expired ead or accepted invalid for work soc sec card.. he is in the wrong with uscis.. but if the employer decided to hire the same persons as an independent contractor, he did not do anything wrong in the eyes of uscis because he is being self employed. Therefore, all the illegal aliens or otherwise unauthorized aliens should just be independent contractors when they work and they will not be considered doing anything wrong per uscis standards... This is your stand.. correct?
Not exactly. So, can you be both a woman and a man, 4now? How can one hire one self to do a job? To hire means to set some financial and behavioral controls with said employment. More than likely, that line of thinking will get you in trouble with the state/federal labor department and IRS. One contracts out with an independent contractor, not hire. Nevertheless, I chose the scenarios for two reasons. First, I know from first hand knowledge that the individual did not get into trouble with USCIS/INS and the foreign embassy. Second, each scenario was which the owner of the business and the employee, so to speak, were one in the same.
To put it more bluntly, one can always work for someone else, but whether one gets paid is a more important question. In some volunteer services, you sing a contract like you were hired, but not paid. Does this violate the law accourding to your interpretation of "work?"
"Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence." John Adams on Defense of the boston Massacre
Thank you, Hudson, for making this issue abundantly clear. What 4now doesn't seem to understand is that there are three different agencies involved 1 -USCIS; 2 - SSA; and 3 - IRS which are completely independent of each other and each has a different set of rules and regulations. SSA only issues SS numbers and qualifies them as "not authorized for employment". In case of detection of an unauthorized employment it sends an "employer's letter" informing the employer that the person receiving wages may be unauthorized to work in the U.S. A new approach was tried and now defeated in the federal court. So, at least for now, is the end of SSA involvement regarding SS number. ITIN and EIN numbers are issued by the IRS and are for different purposes although both are means of identification for tax collection. ITIN is a substitute for SS number for individuals who cannot legally obtain a SS number, say - a spouse of a legal alien. EIN is for individuals and business entities who conduct business in the US. Individuals who conduct business under a name other than their own should obtain EIN as means of identifying the business. And as 4now correctly noted it is not used on an individual tax return only on Schedule C or K-1. Now IRS is not interested at all whether an alien is violating his or her immigration status. The IRS is only concerned about the correct amount of taxes being paid on an income. Remember Al Capone? He went to prison for tax evasion and never been convicted of the whole gamut of crimes he committed. Why the three different agencies have different policies and rules is beyond the scope of this discussion but such are the laws.
and if person collected 50k in speaking fees, you say the uscis doesnt care?
Yes, because it is not considered employment and not violating the visa requirement.
quote:
The key words in this scenario is rental activity. the income is most likely treated as passive activity. I do not believe for a second that if there was a K-1 for H-4 souse from a business that was generating income subject to self employment tax that it would be questioned. (and if not, then they are not doing their job or do not know how to do their job.)
Generally, you are correct. But in this case, the NAICS code was that of a property management company. That is, all rental receipts were considered active income, ie self employment income.
quote:
How did this person obtain an itin number for a w-2 without filing a tax return to begin with as that is the new procedure??
Because there was a tax treaty to obtain the ITIN. It is listed as one of the exceptions for not required to file a tax return.
"Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence." John Adams on Defense of the boston Massacre
[quote]What 4now doesn't seem to understand is that there are three different agencies involved 1 -USCIS; 2 - SSA; and 3 - IRS which are completely independent of each other and each has a different set of rules and regulations. [quote]
OMG this one is just too funny 4 4now to even respond to.
[quote]SSA only issues SS numbers and qualifies them as "not authorized for employment".[quote]
it seems that you dont seem to understand. uscis qualifies the alien as "not authorized for employment." Soc Sec. Administration issues the number and card is issued per specifictions from uscis. Soc SEC administratio will then monitors and administrates after soc sec number is issued.
Hudson:
sorry I reread the post and I missed that it was a treaty agreement no problem. I agree.
but y in all the cases you mentioned are rare. the f1 student . refereced as changing to h1b. this was not an f1 student going before a judge.
Again the situation with the h-4 spouse with k1 showing self employment. that I/o closed his eyes. and if this is ok. then I say that you and i go together and set up business on" how we can let yoour H-4 spouse legitamately work without fear" We should be able to make a few bucks ...
I gotta run. right now.. dudes.. be back to finish rest of my response
sorry I reread the post and I missed that it was a treaty agreement no problem. I agree.
but y in all the cases you mentioned are rare. the f1 student . refereced as changing to h1b. this was not an f1 student going before a judge.
Again the situation with the h-4 spouse with k1 showing self employment. that I/o closed his eyes. and if this is ok. then I say that you and i go together and set up business on" how we can let yoour H-4 spouse legitamately work without fear" We should be able to make a few bucks ... Big Grin
I gotta run. right now.. dudes.. be back to finish rest of my response
The point I am making is that USCIS has a different definition of what you describe as "work." USCIS uses the term "employment" when referring to illegally "working." Employment, from a legal perspective, generally means a employer-employee relationship, or dependent personal services only. USCIS does not refer to "work" as loosely as you described it. And although USCIS does not know the IRS regulations, they do generally look at active income. This is the point I am making. It is very muddy what the legal status when an immigrant works as self employed. It is more apparent what will happen if someone works for an employer without the proper authorization. That is the quirk in the law and the obsecurity. Until USCIS defines more clearly what "employment" means in an immigration case, then those who are here legally or illegally still have the option to be self employed or start their own business. That is why it is important to look at the state rules for who can obtain a license to start their own business. State rules describe who can start a corporation, a partnership, an LLC, or even, in some case, a sole proprietorship because the state looks at state residency specifically, not immigration status. And although immigration status can be indicative of residency status, it is not always the case. That is why there is a piclle when you have illegal aliens in the United States still able to have their children go to school, emergency medical treatment, certain legal protections, etc. And that is part of the complexity of immigration law.
This message has been edited. Last edited by: Hudson,
"Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence." John Adams on Defense of the boston Massacre
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