1. QUESTION 1: Are you a "foreign person"?
ANSWER 1: No. 26 C.F.R. §1.1441-1 implements the foreign affairs powers of Congress under Article 1, Section 8, Clause 3. That authority extends ONLY to aliens, foreign corporations, or foreign countries, and not to INTRASTATE commerce or those born or naturalized anywhere in the COUNTRY such as myself. This should be clear from reading the definition of “individual” in 26 C.F.R. §1.1441-1(c)(3) for WITHHOLDING purposes ONLY. I am NOT an alien coming under the foreign affairs functions of the national government, and thus NOT a “foreign person” for the purposes of “foreign person withholding or reporting”. “Nonresident aliens” described in 26 U.S.C. §7701(b)(1)(B), however, can include American nationals such as myself and even political “citizens” born in territories such as Puerto Rico described in 26 U.S.C. §2209. Even Puerto Rican CITIZENS under that statute are referred to as “nonresident not a citizen of the United States”, which is just a way of DISGUISING their status as the NONRESIDENT ALIENS that they really are, just like me. Therefore, there is overlap between aliens and U.S. nationals under the “nonresident alien” umbrella that can create confusion among those contemplating whether or not they are withholding agents such as yourself. It appears to me that ambiguity by Congress is DELIBERATE to steer American nationals born and raised in this country such as myself AWAY from the perfectly lawful “nonresident alien” status. I’m sorry for the confusion, but I didn’t create it. That confusion is also found in the W-8BEN form itself, which is ALSO ONLY for aliens. That is why I had to use a custom W-8 like this one in accordance with IRS regulations ONLY for use by those who are American nationals but NOT aliens. Do you think the IRS would ever provide a form like this one which allows people like you to completely and lawfully opt out of the income tax system of withholding and reporting? So, they censored mentioning American nationals from their withholding forms, their publications, etc. but it’s still perfectly lawful to be a “nonresident alien” as an American national. Because I am not an alien, you have been ABSOLVED of liability to withhold, since 26 U.S.C. §1461 limits liability to withhold under 26 C.F.R. §1.1441-1 ONLY to aliens and NOT American nationals such as myself. Suffice it to say that I DO NOT consent to be treated AS IF I am the “foreign person” for the purposes of 26 C.F.R. §1.1441-1 AND that if you TREAT me as that “foreign person” against my will for the purposes of 26 C.F.R. §1.1441-1, you are:
(1) Unlawfully aiding and abetting the national government in unconstitutionally INTERFERING with intrastate commerce over which they have no legal authority or direct control under the Constitution;
(2) Taking my private property unlawfully under the color, but without the actual authority, of law. This is a tort for which you can and will be held personally accountable.
Further, the term “foreign person” is NEVER actually DEFINED anywhere in the I.R.C., so it doesn’t mean anything. 26 C.F.R. §1.1441-1(c)(2)(i) doesn’t define it either. It DESCRIBES but not DEFINES what it is NOT, but not what it IS. This is because Congress cannot define things it doesn’t have jurisdiction over and some provable property interest in. To ask me to PROVE that I am something that has no definition is to ask me to prove a NEGATIVE, which is an impossible burden of proof. I can therefore be a “nonresident alien” and even a “person” under 26 U.S.C. §7701(a)(1) WITHOUT being:
(1) An “individual” for the purposes of WITHHOLDING under 26 C.F.R. §1.1441-1(c)(3)(ii) because those parties are all “aliens” (foreign nationals) or
(2) A “person” under 26 U.S.C. §6671(b) or 26 U.S.C. §7343, because these people have to be VOLUNTARILY privileged either through a voluntary election, “effectively connected”, etc., which I am NOT. Since obligations attach to these types of entities, no one can compel me to adopt them and I refuse all privileges that might connect me to said statuses and the privileges and obligations they represent as a property interest. See:
IRS Fraud and Deception About the Statutory Word “Person”, Form #08.023; https://sedm.org/Forms/08-PolicyDocs/IRSPerson.pdf.
26 U.S.C. §1441 and 26 C.F.R. §1.1441-1 withholding and reporting nowhere expressly includes Fourteenth Amendment citizens in states of the Union. If you believe otherwise, please provide the proof NOW or forever be estopped from later challenging. 26 U.S.C. §873 identifies “nationals of the United States” (political sense) as “nonresident alien individuals”, but ONLY when they pursue PRIVILEGED deductions under 26 U.S.C. §162, which I am not doing here and which do NOT relate to foreign person withholding in 26 C.F.R. §1.1441-1. Thus, I REMAIN a “non-individual” and “foreign non-person” not subject to withholding on ONLY “aliens” and not “nationals” under 26 C.F.R. §1.1441-1.
I DO NOT question the CIVIL obligation of ANYONE and EVERYONE to PAY for the privileges and benefits they ASK for from any and every government. This is what being a RESPONSIBLE American means. But at the same time, if I am deprived of the right to AVOID those privileges and benefits and the obligations that attach to both VOLUNTARILY REQUESTING, and later ACTUALLY RECEIVING those benefits and privileges, then I am a victim of extortion and duress that invalidates any and all obligations resulting from the duress. Since I have ASKED for nothing that costs the government money, forcing me to characterize my pay as subject to WITHOLDING in order to pay for services and benefits and privileges I don’t want sounds more like a mafia “offer you can’t refuse” than a valid lawful evolution. NO one can lawfully force me to accept or receive anything of value from any government or the obligations attached to that receipt and if they do, standing to sue for an injury will be the inevitable result:
“A person is ordinarily not required to pay for benefits which were thrust upon him with no opportunity to refuse them. The fact that he is enriched is not enough, if he cannot avoid the enrichment.” Wade, Restitution for Benefits Conferred Without Request, 19 Vand. L. Rev. at 1198 (1966).
[Siskron v. Temel-Peck Enterprises, 26 N.C.App. 387, 390 (N.C. Ct. App. 1975)]
2. QUESTION 2: Can you satisfy any of the “U.S. indicia” found in 26 C.F.R. §1.1441-7(b)(5), such as an address or phone number OUTSIDE of the “United States”?
ANSWER 2: Those rules ONLY apply to “nonresident aliens” who are ALSO “aliens”. “U.S. Nationals” under 22 C.F.R. §51.2 and “nationals of the United States” under 8 U.S.C. §1101(a)(22) such as myself NOT consensually engaged in PRIVILEGED activities are NOT expressly included in this requirement for “U.S. Indicia” and therefore PURPOSEFULLY EXCLUDED per the rules of statutory construction and interpretation. This is exhaustively covered in the following AI questions and answers that I ENCOURAGE you to ask your favorite AI chatbot:
https://ftsig.org/microsoft-copilot-american-nationals-are-not-foreign-persons-for-the-purpose-of-i-r-c-chapter-3-foreign-person-withholding-in-26-u-s-c-1441-and-26-c-f-r-1-1441-1/
[W-8SUB, Forrm #04.231, FAQs; SOURCE: https://sedm.org/Forms/04-Tax/2-Withholding/W-8SUB.pdf]
Foreign Persons
A payee is subject to nonresident alien (NRA) withholding only if it is a foreign person. A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, a foreign estate, and any other person that is not a U.S. person. It also includes a foreign branch of a U.S. financial institution if the foreign branch is a qualified intermediary. Generally, the U.S. branch of a foreign corporation or partnership is treated as a foreign person.
Nonresident Alien
A nonresident alien is an individual who is not a U.S. citizen or a resident alien. A resident of a foreign country under the residence article of an income tax treaty is a nonresident alien individual for purposes of withholding.
Married to U.S. Citizen or Resident Alien
Nonresident alien individuals married to U.S. citizens or residents may choose to be treated as resident aliens for certain income tax purposes. However, these individuals are still subject to the NRA withholding rules that apply to nonresident aliens for all income except wages. Wages paid to these individuals are subject to the withholding rules that apply to U.S. citizens and residents and not the NRA withholding rules. Refer to Publication 15 Circular E, Employer's Tax Guide.
U.S. Person
The term "United States person" means:
- A citizen or resident of the United States,
- A partnership created or organized in the United States or under the law of the United States or of any State, or the District of Columbia,
- A corporation created or organized in the United States or under the law of the United States or of any State, or the District of Columbia,
- Any estate or trust other than a foreign estate or foreign trust. (See Internal Revenue Code section 7701(a)(31) for the definition of a foreign estate and a foreign trust.), or
- Any other person that is not a foreign person.
U.S. Citizen
The term "United States Citizen" means:
- An individual born in the United States,
- An individual whose parent is a U.S. citizen,
- A former alien who has been naturalized as a U.S. citizen,
- An individual born in Puerto Rico,
- An individual born in Guam, or
- An individual born in the U.S. Virgin Islands.
Resident Alien
A resident alien is an individual that is not a citizen or national of the United States and who meets either the green card test or the substantial presence test for the calendar year.
Generally, the days the alien is in the United States as a teacher, researcher, student, trainee, exchange visitor, or cultural exchange visitor on an "F", "J", "M", or "Q visa are not counted. This exception is for a limited period of time. For more information on resident and nonresident status, the tests for residence, and the exceptions to them, refer to Publication 519, U.S. Tax Guide for Aliens.
Note: If your employee is late in notifying you that his or her status changed from nonresident alien to resident alien, you may have to make an adjustment to Form 941 if that employee was exempt from withholding of social security and Medicare taxes as a nonresident alien. For more information on making adjustments to Form 941, refer to Chapter 13 of Publication 15 Circular E, Employer's Tax Guide.
Resident of a U.S. possession
A resident of the Commonwealth of the Northern Mariana Islands or American Samoa, who is not a U.S. citizen, is treated as a nonresident alien for the withholding rules explained here. Persons who were born in Puerto Rico, Guam, or the U.S. Virgin Islands are U.S. citizens and are treated as U.S. persons for U.S. withholding tax purposes. Aliens who were not born in Puerto Rico, Guam, or the U.S. Virgin Islands, but who are residents of those islands, are treated as nonresident aliens for U.S. withholding tax purposes.
Section 937 of the Internal Revenue Code establishes the filing requirement for Form 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Possession. This form reports each change of residency to or from a U.S. possession. The IRS is authorized to impose a $1,000 penalty on any taxpayer who is liable to file this form, but who fails to file it.
Under section 937 of the Internal Revenue Code, an individual is generally considered a bona fide resident of a possession if
- he or she is physically present in the possession for 183 days during the taxable year (however, U.S. citizens and resident aliens are permitted certain exceptions to the 183-day rule.),
- does not have a tax home outside the possession during the tax year, and
- does not have a closer connection to the U.S. or a foreign country.
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Internal Revenue Code section 937 also establishes new criteria for determining whether income is sourced in a U.S. possession. For more information refer to AJCA – New Rules Regarding U.S. Possessions.
Foreign Corporations
A foreign corporation is one that does not fit the definition of a domestic corporation. A domestic corporation is one that was created or organized in the United States or under the laws of the United States, any of its states, or the District of Columbia.
Guam or Northern Mariana Islands Corporations
A corporation created or organized in, or under the laws of, Guam or the Commonwealth of the Northern Mariana Islands (CNMI) is not considered a foreign corporation for the purpose of withholding tax for the tax year if:
- At all times during the tax year less than 25 percent in value of the corporation's stock is owned, directly or indirectly, by foreign persons, and
- At least 20 percent of the corporation's gross income is derived from sources within Guam or the CNMI for the 3-year period ending with the close of the preceding tax year of the corporation (or the period the corporation has been in existence, if less).
Note: The provisions discussed below under U.S. Virgin Islands and American Samoa Corporations will apply to Guam or CNMI corporations when an implementing agreement is in effect between the United States and that possession.
Virgin Islands and American Samoa Corporations
A corporation created or organized in, or under the laws of, the Virgin Islands or American Samoa is not considered a foreign corporation for the purposes of withholding tax for the tax year if:
- At all times during the tax year less than 25 percent in value of the corporation's stock is owned, directly or indirectly, by foreign persons.
- At least 65 percent of the corporation's gross income is effectively connected with the conduct of a trade or business in the Virgin Islands, American Samoa, Guam, the CNMI, or the United States for the 3-year period ending with the close of the tax year of the corporation (or the period the corporation or any predecessor has been in existence, if less), and
- No substantial part of the income of the corporation is used, directly or indirectly, to satisfy obligations to a person who is not a bona fide resident of the Virgin Islands, American Samoa, Guam, the CNMI, or the United States.
Foreign Private Foundation
A private foundation that was created or organized under the laws of a foreign country is a foreign private foundation. Gross investment income from sources within the United States paid to a qualified foreign private foundation is subject to NRA withholding of a 4 percent excise tax (unless exempted by a treaty) rather than the ordinary statutory 30 percent income tax.
Other Foreign Organizations, Associations, and Charitable Institutions
An organization may be exempt from income tax under section 501(a) of the Internal Revenue Code even if it was formed under foreign law. Generally, you do not have to withhold tax on payments of income to these foreign tax-exempt organizations unless the IRS has determined that they are foreign private foundations. As a general rule, such foreign tax-exempt organizations should file Form W-8EXP with the withholding agent in order to establish their status as a foreign tax-exempt organization.
Payments to these organizations, however, must be reported on Form 1042-S, even though no tax is withheld.
You must withhold tax on the unrelated business income (as described in Publication 598, Tax on Unrelated Business Income of Exempt Organizations) of foreign tax-exempt organizations in the same way that you would withhold tax on similar income of nonexempt organizations.
U.S. Branches of Foreign Persons
In general, a payment to a U.S. branch of a foreign person is a payment made to the foreign person. You may, however, treat payments to U.S. branches of foreign banks and foreign insurance companies that are subject to U.S. regulatory supervision as payments made to a U.S. person, if you and the U.S. branch have agreed to do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding. For this purpose, a financial institution organized under the laws of a U.S. possession is treated as a U.S. branch.
References/Related Topics
Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.
Page Last Reviewed or Updated: 04-Mar-2016