This is a Canadian Indie Author’s journey to getting an Individual Tax Identification Number (“ITIN”)… to stop the IRS from taking 30% of my book sales, when there’s a treaty that says they should get 0%!!
FIRST: I must tell you that if you’re planning on self-publishing soon, you should make your application to the IRS immediately!! I waited until after I hit the publish button with Amazon for my debut novel, Twisted, and quickly learned that, though an ITIN isn’t required, Amazon withholds 30% of your sales and remits it to the IRS.
I was surprised to sell 1,000 books within the first month of publishing, so needless to say I became more than a little disappointed to hand my money over to the IRS. There is a treaty between Canada and the United States that grants 0% withholding, but that isn’t effective and applied to your KDP account unless you file your W-8BEN with Amazon. You need an ITIN before you can file that form.
Here’s my gift to new self-published authors across Canada.
STEP ONE: You need a letter from Amazon for filing with your W7. You can get it HERE. Filling it out is self-explanatory. 🙂
STEP TWO: You have to fill out a W-7 Application for IRS Individual Taxpayer Identification Number.
Here’s a link to the form that was current when I made my application in 2013. http://www.irs.gov/pub/irs-pdf/fw7.pdf
Reason you are submitting: select h. “Other” and insert, “To obtain a reduced rate of withholding in accordance with Article X11 of the treaty between Canada and the U.S.A.”, or something like that. I’ve attached a sample Application for your reference. Please note that Abigail Jenkins is a fictional character from The Twisted Trilogy and is used as an example only.
Here’s the kicker. You MUST send original identification or certified copies from the issuing agency. Note: The Ministry of Transportation refused to provide a certified copy of my Enhanced Driver’s Licence to me. What else could I do? I don’t have a passport. I tried sending notarial copies and they were rejected. In fact, the IRS gave me 30 days to send them originals of my ID or else they would reject the application and close my file.
I called every lawyer’s office specializing in tax law from here to Toronto. I contacted multiple Certified Acceptance Agents for the IRS located in Ontario. I’ve discussed this with every Ontario author I know. As far I am concerned, there is no way around it if you do not have certified copies from the issuing agency x2.
WARNING: If you plan to send your original passport or enhanced driver’s licence to the IRS, make sure you have no travel plans over the next 6 months. I’m not even joking. It took me 5 months to get my ITIN, after a lot of hassle and headache, and I JUST NOW (***note this is a revision*** 😮 ) received the originals of my ID back…over four months after submitting them. I am hard-pressed to call that PROMPT return, but whatever.
You heard right: Against my better judgment, I sent my original ID to the IRS by courier. I received a signature from Canada Post stating that the IRS received my courier package. The IRS denied ever having received it.
I didn’t know that they had lost such package, until I received my rejection notice, which says that they never received it. I use the term “says” lightly. After sending multiple correspondence to them (like 15 letters, no exaggerating), they finally issued me a ITIN. However not once did I receive a phone call or letter in response to my empty threats of lawsuit for fraud and identity theft and my other words of frustration from the convenience of them losing my originals.
You wonder why I didn’t call customer service. Oh, but I did. 31 minutes on hold (long distance on my cell phone) and a 1 minute telephone conversation with a heavily accented man who told me he was unable to help me, that I should try sending a letter by facsimile. Thanks for that number, by the way. It was useless. I did send the IRS letters by fax, as I said before, many, many times, to no avail.
Needless to say I’m not a friend of the IRS. Apparently I have to add the Canadian Postal Service to that list of unhelpful bastards now too. Rant over. Back to the point…
STEP THREE: Next you have to file the W-8BEN. Here’s a link to the form: http://www.irs.gov/pub/irs-pdf/fw8ben.pdf
Check off a. and b. in Part II. Insert “Canada”; “0%”; Article “12” and “I am a Canadian citizen and a non-resident of the USA.” I’ve attached a sample Certificate for your reference.
I understand, if you take the tax interview in your Amazon KDP account, that the W-8BEN can be filed electronically. As for submission to CreateSpace and Smashwords, the other distribution channels I use, I had to send originals.
THAT’S IT!! I only hope this will help to save you the trouble and aggravation I’ve suffered to get to this point today. GOOD LUCK!!
I’m not even going to pretend that I have any knowledge in this area, except that from my own horrific application experience.
***Please seek tax advice from a qualified tax advisor or lawyer familiar with U.S. and Canadian tax law for assistance particular to your own circumstances.***
- Some Things Canadian Writers Should Know About Selling Printed Books (droppedpebbles.wordpress.com)
- Getting ITIN becomes even more difficult (expertotaxservice.wordpress.com)
- Interim Changes to the ITIN Application Process (irsenrolledagent.wordpress.com)