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Thread: ITIN and w-9 and taxes

  1. #1
    hi. A friend is adjusting status and has very little to worry about. She does work with an ITIN as an independent contractor. Her bosses gave her a w-9 to sign and she did it several times. With that she got a 1099 and paid taxes. It was either use her itin or use a fake social.

    Two issues. She now sees that the w-9 is for citizens or residents. Is she in real trouble? Could she be deported? Could she get a waiver?

    And issue #2 is that a couple of times the tax bill was too high and simply couldn't pay it. So she said she made less and paid less. Could this be trouble? Could she be deported?

    Again, other than these two things, she is fine. no arrest or things like that. She didn't lied about citizenship really since the w-9 is for citizens or residents.

    There are people that lie and get federal loans or vote or get into many programs that are meant for only citizens. Those are in real trouble for sure. But my friend did it so she could work and most of the years she paid what the 1099 said.

    Any advice? Any ideas? Thank you.

  2. #2
    hi. A friend is adjusting status and has very little to worry about. She does work with an ITIN as an independent contractor. Her bosses gave her a w-9 to sign and she did it several times. With that she got a 1099 and paid taxes. It was either use her itin or use a fake social.

    Two issues. She now sees that the w-9 is for citizens or residents. Is she in real trouble? Could she be deported? Could she get a waiver?

    And issue #2 is that a couple of times the tax bill was too high and simply couldn't pay it. So she said she made less and paid less. Could this be trouble? Could she be deported?

    Again, other than these two things, she is fine. no arrest or things like that. She didn't lied about citizenship really since the w-9 is for citizens or residents.

    There are people that lie and get federal loans or vote or get into many programs that are meant for only citizens. Those are in real trouble for sure. But my friend did it so she could work and most of the years she paid what the 1099 said.

    Any advice? Any ideas? Thank you.

  3. #3
    What is her status in US?
    ITIN is issued to foreign Students to open an accounts with the banks, dose she have a uscis permission to work?
    I think she is a student or vistor or married to USC, while in the student status.
    Tax form 1099 are used by peoples who have an investments
    She might be in trouble with IRS, its better to check with some tax experts other then her companies.

  4. #4
    Canon,
    Q1: If she is not authorized to work, she may have an additional issue with USCIS. However, you posed another question about residency. First, IRS determines US residency different than how USCIS determines residency. Assuming she is not on a F, J, Q, M, G, or A visa, she will determine her residency using the substantial presence test. If she was present in the country for the taxable year for 31 days and for a period of 183 days where she counts all the days in the current year, 1/3 the days the prior year, and 1/6 the days the second preceeding year, then she will be considered a US resident for tax purposes and required to pay income taxes on worldwide income. If she does have foreign income, IRS has two principle methods to help eliminate the double taxation: foreign tax credit or the foreign earned income exclusion. And depending on which country she resided in prior to entering the US, tax treaties may also apply, but need additional info. Additionally, W-9 would be the correct form to fill out which NRA/FIRPTA withholding would not apply. If she was considered a nonresident alien, 30% wuthholding or the lower tax treaty rate would apply to the income unless form 8288 was filed with the employer.

    Q2. As stated above, she is required to file a US tax return if the income is above the threshold based on filing status, age, and whether she should be claimed as a dependent. Second, nonemployee compensation, Form 1099-MISC with income in box 7 also has an additional tax called the self employment tax, which is an automatic requirement to file if the net self employment income more than $400. If the inomce was earned in 2006, she would file the tax return by April 15th, 2007.

    Q3. Since your friend is owing taxes for previous years, the IRS has several options available. She could enter into an extension time to pay for up to 120 days, an installment agreement, currently non collectible, or offer in compromise. If this is based on a joint return and if she is not reponsible for the balance due, she may file innocent spousal relief if she meets basic requirements. Additional info is needed before a more accurate determination can be made.
    "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

  5. #5
    What is her status in US?
    ITIN is issued to foreign Students to open an accounts with the banks, dose she have a uscis permission to work?
    I think she is a student or vistor or married to USC, while in the student status.
    Tax form 1099 are used by peoples who have an investments
    She might be in trouble with IRS, its better to check with some tax experts other then her companies
    ITIN's are issued to non-US citizens who are not eligible for a SSN. Foreign students on a J, F, Q, or M may be eligible for a SSN if they are receiving scholarships from US sources.

    There are many 1099's available, form 1099-DIV or 1099-B can be used for investments. The following are the different forms of the 1099, -A, -B, -C, -DIV, -LTC, -MISC, -Q, -R, -SA, -CAP, -G, -H, -PATR, -OID, -S, or -INT. The OP is referring to a 1099-MISC which is used for rents, royalties, other income (not subject to any other reporting document), non-employee compensation, and some other income (See form or instructions for details).
    "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

  6. #6
    no, she was out of status. as withthe issues with USIC, bad enough for denial?

  7. #7
    Canon,
    How long has your friend been out of status?
    Is your friend married?
    Which country your friend resided in prior to entering the US?

    If she hss been out of status for more than 180 days, she could face a ban of 3 years; while being out of status for more than a year, your friend could face ban for reentry for 10 years.

    If your friend is married to a USC, I would urge Adjustment of status ASAP?

    If your friend is from Lebanon, Nigeria, or another country where armed conflict is currently occuring, your friend could attempt to seek refugee status.

    However, more detailed info is needed.
    "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

  8. #8
    sorry for not giving enough info. she has been out of status for over a decade. came as a child (legally) and is adjusting her status under 245i petition by her US citizen mother. she got her i-130 approval and all. and she is from south america.

    outside of the w-9 and the taxes, she has zero to worry about. but are the previous issues enough for denial or deportation?

    there are people who lie in order to vote. others do it to get into the country. others do it to get special federal loans. and others do it for other things. those for sure will have a great deal to explain. but is my friend in danger? how should she go about it? obviously if immigration says anything she will explain and confess.

    but is this enough to worry my friend? and should she pay all the taxes now or wait? thank you.

  9. #9
    Canon,
    From what I understand, it depends on when the INA 245(i) waiver was filed or something that USCIS does not like (these cases are approved on a case by case basis.).
    "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

  10. #10
    well, the 245i petition was done back in 2001. and outside of these two issues, there shouldn't be a problem.

    usually, what happens? people lie to get loans. do they get a nasty look and approval? or denial and deportation? i know every case is different, but what usually happens? she obviously signed the w-9 and she can't take it back. what about the back taxes?

    so she should go to the interview and hope for the best. and if aked, she should confess and hope for the best.

    thank you.

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