I am a beneficiary to a trust. The bank administering it sent me a W9. As I read the instructions I don't have to sign it, so I filled in my SS# and returned it. They have sent it back, saying I forgot to sign it.
Am I obligated to sign it? If I am not obligated to sign it, is there any downside to cooperating?
I don't even know what backup withholding is; presumably that indicates I am not subject to it...
returned it.
not subject to it...
The W9 purpose is to verify your social security number. A legitimate institution looking to disburse money to you is going to ask you for it. In this circumstance, it would stand to reason that they would ask, and if you'd like the money, you should agree to sign.
How have you come to the conclusion that you do not have to sign it? It clearly has a space marked "Certification", and a place for your signature.
Backup withholding means that if you don't sign it, they either can or must withhold some of what they owe you (I believe it's somewhere between 20 and 30%) and send it to the IRS.
Right above that space for signature it says,
BEGIN QUOTE
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions on page 4
END QUOTE
"For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN"
Its not for interest or a dividend. That's what let me to believe I shouldn't sign it.
It's for a trust and I see no evidence that this is a trust that cannot throw off interest or dividends.
And the bank wants it signed before talking with you any more.
So sign it, already.
among the bizarre IRS rules, that is one of the most bizarre.
As you observe, you are not, although good luck persuading the bureaucrats to read the instructions.
None that I've ever observed, having had this same silly argument many times.
not "having to" and "shouldn't" are two entirely different things. Also, from the W-9 instructions " You may be requested to sign by the withholding agent even if item 1, below, and items 4 and 5 on page 4 indicate otherwise."
Uh, what Art said. There are times to pick a fight. Why does [fill in the blank] need my social security number or ID? In this case a bank is asking for legitimate information they need to properly perform the function of giving you money. This is not complicated, and I can't imagine any reason to object. If the money isn't worth the bother, fine, but the request makes sense.
If I were a payer who requested a Form W-9 to be returned to me for my files, I'd likely have no way or no time to validate the signature.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.