Glossary

Entities

Entities are non-individual tax classifications and account types.

Examples of entities include but are not limited to:

• Corporations.
• Partnerships.
• Tax-exempt Organizations.
• Private Foundations.

[Form W-8BEN](https://www.irs.gov/forms-pubs/about-form-w-8-ben)

This form documents, under penalties of perjury, that an individual is a Non-US Person.

[Form W-8BEN-E](https://www.irs.gov/forms-pubs/about-form-w-8-ben-e)

This form documents, under penalties of perjury, that an entity is a Non-US Person.

[Form W-9](https://www.irs.gov/forms-pubs/about-form-w-9)

This form documents, under penalties of perjury, that an individual or entity is a US Person and specifically collects the user’s Name and Tax Identification Number (TIN), as well as other information needed to complete tax forms like Form 1099.

Substitute Form

This customizable form collects information you would typically gather via a W-9, W-8BEN, or W-8BEN-E. You must meet specific IRS criteria to use this form.

Tax Document/Tax Documentation

A document, such as a Form W-9 or W-8BEN, that conveys information about an individual or entity and their respective tax status.

US Person

The IRS can classify both entities and individuals as a US Person.

The IRS classifies the following entities as a US Person.

• A partnership, corporation, company, or association incorporated or registered in the US or under the laws of the United States.
• An estate (excluding foreign estates).
• A domestic trust as defined in Regulations section 301.7701-7.The IRS classifies the following individuals as a US Person.
• US citizens.
• US permanent residents.
• Individuals who meet the Substantial Presence test are considered US tax residents for spending a certain amount of time in the US.

Backup Withholding

An amount of withholding tax collected if the person or entity is not properly documented with a valid W-9, W-8BEN, or W-8BEN-E.

Backup withholdings depend on the type of payment being made and the specific circumstances related to the tax documentation.

The current rate of backup withholding is 24%.

All withholding tax must be submitted to the IRS on a specific remittance schedule. For example, if a bank makes a $100 dividend payment to a recipient who hasn’t provided a valid W-9 or W-8, and isn’t exempt from backup withholding, the bank must withhold $24 and only pay the recipient $76. The bank must remit the $24 to the IRS and issue the recipient a 1099-DIV form showing the amount of withholding tax.

Country of Citizenship

The user’s country of citizenship.

If an individual has multiple citizenships, including the US, they should select US for their Country of Citizenship.

If an individual has multiple citizenships, not including the US, they should select the country where they reside.

If the individual’s current residency does not match one of their citizenships, they should use the country of their last residence.

Country of Incorporation or Organization

The country where the entity was incorporated, created, or is governed by.

DBA Name

Use a “doing business as” name when an individual or entity conducts business under a name other than their legal name.

If applicable, list the DBA name on line 2 of the W-9 or the Reference Number line of the W-8BEN or W-8BEN-E.

Disregarded Entity

A disregarded entity is an entity that is treated as a flow-through entity for US tax purposes.

This means the respective tax attributes will flow through from the disregarded entity to the regarded owner, even though they are separate entities from a legal perspective.

The regarded owner of a disregarded entity can be an individual, entity, US Person, or Non-US Person. For example, a US individual regarded as the owner of a non-US corporation is treated as a disregarded entity.

If applicable, list the disregarded entity name on line 2 of the W-9 or the Reference Number line of the W-8BEN or W-8BEN-E.

Exempt FATCA Code

This code (notated A-M) corresponds to a specific type of entity that is exempt from Foreign Account Tax Compliance Act (“FATCA”) reporting. For example, a state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities.

Exempt Payee Code

This code (notated 1-13) corresponds to a specific type of entity that is exempt from backup withholding. For example, a foreign government or any of its political subdivisions, agencies, or instrumentalities.

Expiration Date

Most W-8 forms (W-8BEN and W-8BEN-E) will expire on December 31st of the third year after the signature date. For example, if an individual signs a W-8BEN on January 15, 2023 (or any date in 2023) it will expire on December 31, 2026.

It is common practice to warn users six months or more before a form expires to submit a new one, since submitting any time during the year won’t impact the next expiration date.

FTIN

FTIN stands for Foreign Taxpayer Identification Number.

An FTIN is similar to a TIN but issued by a local non-US government.

FTINs can vary in terms of format, length and types of characters.

There is no standardization or validation for FTINs.

Some countries do not issue FTINs.

FTIN Not Legally Required

There are some countries that do not issue FTINs. In this case, there is a checkbox on tax forms to state the user will lawfully not provide an FTIN.

Penalties of Perjury Certifications

The statements a person signing a tax form is agreeing to under penalties of perjury.

Each tax form (W-9, W-8BEN, and W-8BEN-E) has its own set of certifications.

Reference Number

The line on the W-8BEN or W-8BEN-E where you list the disregarded entity name or DBA name.

Tax Classification

The US federal tax classification of the individual or entity.
There are some tax classification differences between a W-9 and a W-8BEN-E.

The W-8BEN is specifically for individuals and doesn’t contain a tax classification section.

Examples include:

• Individual (listed on the W-9 and implied on the W-8BEN).
• C-Corporation (listed on the W-9).
• Partnership (listed on the W-9 and W-8BEN-E).

[TIN](https://www.irs.gov/individuals/international-taxpayers/taxpayer-identification-numbers-tin)

TIN stands for Taxpayer Identification Number and is a nine-digit number the IRS uses to identify taxpayers.

The IRS maintains a database they use to match against the Name and TIN combinations filed on 1099s and other tax forms.

There are two types of TINs, individual and entity.

There are two sub-categories for individuals:

• The Social Security Number (SSN), which the Social Security Administration issues (most common).
• The Individual Taxpayer Identification Number (ITIN), which the IRS issues.There is only one type for entities:
• Employment Identification Number (EIN), which the IRS issues.

TIN Verification

The process of sending a Name and TIN combination to the IRS to confirm the combination matches their database.

If the combination does not match, it is common practice to follow up with the user to solicit a new Name and TIN combination and possibly a new tax form.

TIN verification does not apply to FTINs.

Care-of Permanent Address

The user specified a Care-of address as their permanent address.

• *W-8BEN** forms do not allow Care-of addresses since the user presumably doesn’t live there.

To fix this issue, the user must provide a physical address.

• *W-8BEN-E** forms allow Care-of addresses, but only if the entity submits documentation to confirm this is the business’s registered address.

Curing Status

Checks whether the user has submitted curing documentation. The exchange must also approve this documentation and communicate the approval to TaxBit.

This status will remain open until the user submits approved documentation.

Expired Form

The form has a signature date beyond the expiration period and is not considered valid.

To fix this, the user must provide a new signature date.

PO Box Permanent Address

The user entered a PO Box as their permanent address.

• *W-8BEN** forms do not allow PO Boxes because an individual cannot live in a PO Box.
• *W-8BEN-E** forms allow PO Boxes, but only if the entity submits documentation to confirm this is the business’s registered address.

Resubmission Status

Checks whether the user has submitted a new form.

This status will remain “open” until the user submits an approved form and any necessary corresponding documentation.

US Mailing Address

The user provided a US address as their mailing address.

To fix this, the individual or entity completing the form must provide documentation showing they are a Non-US Person. The exchange must also approve this change and communicate the approval to TaxBit.

US Permanent Address

The user entered a US address as the permanent address.

To fix this, the user must submit a new form without a US permanent address and also submit documentation to confirm they are a Non-US Person. The exchange must also approve this change and communicate the approval to TaxBit.