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Question: Is a W9 tax form with the opening sequence of the tax number beginning with 98 normally a red flag that a W8 tax form will eventually need to be completed because this would suggest that the entity is not domestic, correct?
Yes, you are correct. A Taxpayer Identification Number (TIN) starting with the sequence "98" often indicates a foreign entity. In such situations, a W-8 tax form might be required instead of a W-9. A W-9 form is used for U.S. persons, which can include U.S. residents and domestic entities, to provide their correct TIN to a person or company that has requested it for tax reporting purposes. The W-9 form certifies that the TIN provided is correct and the individual or entity is not subject to backup withholding. On the other hand, a W-8 tax form is used for foreign individuals and entities to establish their foreign status, claim tax treaty benefits, and certify that they are not subject to certain U.S. income tax withholding. If a foreign entity inadvertently provides a W-9 form, it is essential to correct the error by requesting and submitting the appropriate W-8 form (such as W-8BEN or W-8ECI) to avoid potential tax issues later.
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