A new scam targets non-resident investors in U.S. accounts. It is an e-mail message, purportedly from the IRS, that threatens to impose a 30% withholding tax on all income from the account if the recipient fails to disclose a great deal of confidential information via a fake IRS reporting form.
Here’s an excerpt from one message (including poor grammar and run-on sentences) now hitting in-boxes worldwide:
“Our records indicate that you are a non-resident alien. As a result, you are exempted from United States of America Tax reporting and withholdings, on interest paid you on your account and other financial dealing to protect your exemption from tax on your account and other financial benefit in rectifying your exemption status.
Therefore, you are to authenticate the following by completing form W-4100B2, and return to us as soon as possible through the fax number: +1-646-403-4499.”
Just to make sure he covered all the bases, the letter-writer (who calls himself Steven Jobs, the same name as the president and CEO of Apple Computer) adds:
“If you are a USA Citizen and resident, please complete form W-4100B2 and fax it to us, please indicate “USA Citizen/Resident” on the form and return it to us.”
The letter helpfully contains a somewhat genuine looking Form W-4100B2 as an attachment.
I ws sure this was a scam as soon as I saw it, but to confirm it, I did some online research to confirm that Form W-4100B2 doesn't exist. There is a grain of truth to the message, in the sense that if you are a non-resident investor in a U.S. bank or securities account, you need to file a form to confirm this status when you open the account. That form is IRS Form W8-BEN.
Form W8-BEN certifies that you are a non-resident for purposes of U.S. withholding requirements. If you live in a country like Canada that has negotiated a tax treaty with the United States featuring low or zero withholding, Form W8-BEN insures that you can take advantage of these low rates.On the other hand, if you live in a country like The Bahamas that doesn’t have a tax treaty with the United States, taxes on some income categories will be withheld at the “retail” 30% rate.
If you’re a non-resident investor in U.S. markets, Form W8-BEN is the ONLY form you should need to file to confirm your non-resident status. Don’t fall for this scam!
Copyright © 2008 by Mark Nestmann
(An earlier version of this post was published by The Sovereign Society.)
