1099-MISC for and Automatic Withholding for non-us persons.

[pavvappav]

Based on the information on the "1099-MISC" section of the help, the decision to provide 1099 forms to us persons was based on the 2014 guidance from the IRS, specificly Q13 is referenced.

The last sentence of Q13 and the entirety of Q14 cover payment of virtual currencies to contractors who are not us citizens.

The 515 document covers the withholding of taxes for non-resident aliens (non us citizens not living within the US). According to this document, it appears that income from Prohashing paid to non resident aliens is subject to a flat 30% tax unless otherwise reduced by treaty with the nation of the foreign individual.


According to 515:

When to withhold. Withholding is required at the time you make a payment of an amount subject to withholding. A payment is made to a person if that person realizes income, whether or not there is an actual transfer of cash or other property. A payment is considered made to a person if it is paid for that person's benefit. For example, a payment made to a creditor of a person in satisfaction of that person's debt to the creditor is considered made to the person. A payment also is considered made to a person if it is made to that person's agent.
A U.S. partnership should withhold when any distributions that include amounts subject to withholding are made. However, if a foreign partner's distributive share of income subject to withholding is not actually distributed, the U.S. partnership must withhold on the foreign partner's distributive share of the income on the earlier of the date that a Schedule K-1 (Form 1065) is provided or mailed to the partner or the due date for furnishing that schedule. If the distributable amount consists of effectively connected income, see Partnership Withholding on Effectively Connected Income , later.

So, with that said, is Prohashing going to be following US law and withholding the 30% tax on income paid to miners who can not or will not provide their TIN and information for 1099-Misc withholding? And understand, I base this question on the description prohashing has provided in their help, and the documents referenced in Prohashing's help on the 1099-Misc page.

P.S.

It looks like submitting the 1099 information isn't working yet if one has not yet met the income threshold.

[overlordx]

Based on the information on the "1099-MISC" section of the help, the decision to provide 1099 forms to us persons was based on the 2014 guidance from the IRS, specificly Q13 is referenced.

The last sentence of Q13 and the entirety of Q14 cover payment of virtual currencies to contractors who are not us citizens.

The 515 document covers the withholding of taxes for non-resident aliens (non us citizens not living within the US). According to this document, it appears that income from Prohashing paid to non resident aliens is subject to a flat 30% tax unless otherwise reduced by treaty with the nation of the foreign individual.


According to 515:

When to withhold. Withholding is required at the time you make a payment of an amount subject to withholding. A payment is made to a person if that person realizes income, whether or not there is an actual transfer of cash or other property. A payment is considered made to a person if it is paid for that person's benefit. For example, a payment made to a creditor of a person in satisfaction of that person's debt to the creditor is considered made to the person. A payment also is considered made to a person if it is made to that person's agent.
A U.S. partnership should withhold when any distributions that include amounts subject to withholding are made. However, if a foreign partner's distributive share of income subject to withholding is not actually distributed, the U.S. partnership must withhold on the foreign partner's distributive share of the income on the earlier of the date that a Schedule K-1 (Form 1065) is provided or mailed to the partner or the due date for furnishing that schedule. If the distributable amount consists of effectively connected income, see Partnership Withholding on Effectively Connected Income , later.

So, with that said, is Prohashing going to be following US law and withholding the 30% tax on income paid to miners who can not or will not provide their TIN and information for 1099-Misc withholding? And understand, I base this question on the description prohashing has provided in their help, and the documents referenced in Prohashing's help on the 1099-Misc page.

P.S.

It looks like submitting the 1099 information isn't working yet if one has not yet met the income threshold.

I am an attorney in Florida and if the IRS treats withholding of taxes for cryptocurrency payments as it does withholding for real estate transactions then the failure to withhold taxes may result in personal liability for the person who failed to withhold the taxes. My guess is that Prohashing will withhold the taxes. There are a couple of other options, but those would require a "click-wrap" agreement.