Tax Avoidance

Today’s blog is brought to you by the letters I R S and the number of times we’ve had to phone them. Those of you who follow us on Twitter or are friends with us on Facebook, will know of the battle we’ve been having with obtaining an ITIN or an EIN from the IRS. Forget Jason’s quest for the golden fleece, forget Perseus’ battle with Medusa and don’t even think about Hercules’ labours. Our battle outranks them all. And we didn’t have an endless jug of Red Bull to keep us going, unlike Jason, the cheat.

You’ve heard the tagline ‘tax doesn’t have to be taxing.’ Whoever wrote that clearly hasn’t dealt with the IRS. Anyhoo, for those of you who are starting out as indie authors, there’s one process that’s more terrifying than facing Medusa with seriously bad PMS – American. Tax. This only applies if you’re not American. Basically, America is like Scrooge with its tax and will withhold 30% of your earnings. Why? Because you’re an alien. Seriously, this is the term they used when referring to foreigners. We are non-resident aliens with a foreign entity. Sounds painful. However, several countries, the UK being one of them, has a tax treaty with America, meaning, they have to give us that 30%. BUT (and this is the annoying part) they don’t just say “Hey, our bad, we forgot about the treaty, here’s your 30%” No. They make you BEG for it. If they could get away with forcing you to do in an embarrassing costume, they would.

As indie authors, if you’re an individual, you need an ITIN (Individual Tax Identification Number) and can apply for it using Form W-7. This is where we hit a snag – we’re not an individual, we’re a team. So we figured we probably needed an EIN (Employer Identification Number) instead, which is for partnerships, companies, etc. So to make sure we were applying for the correct tax number, we scoured their website. For DAYS. We were lost in the land of confuzzlement and couldn’t find the ladder to escape back in the faraway tree. The website is about as helpful as blank map. The only example of a partnership it gave, was a husband and wife team and that didn’t really relate to us.

So we figured the best thing to do, was to ring them. We got the number for the US Embassy in London and rang. It took us through all the options (we needed option 5) then it just rang. And rang. And rang. For half an hour. We hung up and tried again. It rang. And rang. And rang. Now, we hate using the phone. If we can avoid it, we will. For years, during our darkest time, we couldn’t even answer the phone, let alone ring someone. So having to ring the US Embassy to discuss tax was a huge thing for us. Did we mention we’re terrible at maths? In school, our exam marks averaged at 20%.

But none of that mattered because they didn’t answer the phone. At all. All day. By this point we were so fed up, we put the phone on speaker and left it lying around ringing, just so the constantly ringing phone would annoy them as much  as they were annoying us. Go Team Revenge! Naturally they’re closed on weekends and being a US Embassy, they not only observe British holidays, but American ones too. They don’t need more time off – on Tuesdays, Wednesdays and Thursdays they only work 9-12! And of course, Monday was Labour Day. So we rang on Tuesday at 9. It rang. And rang. And rang. They didn’t answer the phone at all. We were due to go to Cornwall on the Thursday and wanted this sorted before then, because Createspace won’t let your book go live unless you have this friggin’ number. And really we should’ve done this in February when Gunning Down Romance was published, but we’ve been putting it off. Plus we figured they won’t bother holding back 30% of nothing.

On Wednesday, we were so irate, we rang the IRS in America. We know from our American friends on Facebook and Twitter, that sometimes they have trouble understanding us. Part of it is the accent, part of it is because we excel at mumbling. So we were sorely tempted to speak to the IRS using the strongest Welsh accents we could muster. With added mumbling. Maybe with some choice Welsh phrases thrown in for good measure. Dwi ddim yn hoffi treth.

We soon gave up on that when they answered the phone and spoke so slowly we were nearly asleep by the time they finished giving their ID number. So then we started jabbering on about our problem and they soon quickened their speech. Eventually, after confusing the poor guy on the phone, we learned we did need an EIN. So had to phone back to apply by phone. You can apply by mail, by that takes 4 weeks, whereas if you apply by phone, it takes about 15 minutes.

We then had the joy of having to spell out every single word, even Cardiff. But the guy on the other end, couldn’t even understand our spelling. We had to revert to the phonetic alphabet. Somehow, he mistook ‘Raven’ for ‘Ladytown’. C L Ladytown would be writing in a whole different genre, pal. Even after spelling out some stuff he said ‘it doesn’t look right.’ No, it’s Welsh and trust us, Llanishen is the English spelling. Llanisien looks even worse. Eventually, we got the form filled out and hung up, both parties relieved. Us because we had an EIN and it was relatively painless in the end, and him because he could escape for a lie down with a wheatgerm pack and some Ibruprofen.

We quickly filled out the W8-BEN form, (which basically tells the IRS to get their grubby little mitts off our 30%) and we sent it to Amazon. So now we can bring Disenchanted and Soul Asylum out in print and hopefully will never have to deal with the IRS again. Unless of course, they contact us to tell us that they’re sorry for the way the Embassy behaved and would like to compensate us for our time wasted. Cheque please!