General Question

NoCatharsis's avatar

What is an IRS W-9 form, and why is it necessary to submit to a bank in order to release my funds?

Asked by NoCatharsis (207points) November 24th, 2010

An account was opened in my name many years ago by my father, with himself listed as the custodian and me listed as the minor (but primary account holder).

Now I am of age and trying to retain these funds, but the agency holding the money will not release without a W-9 form.

I would simply fill out this form and return it to them, however I sent them the paperwork they originally requested (name, address, SSN, etc. with bank guarantee stamp) only to be told they now need a W-9.

Before I send the W-9, I would like to know a little more about what they can do with it, and why it would be necessary. I have gotten the basics from Wikipedia here but a little more detail would be great.

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5 Answers

wundayatta's avatar

My guess is this:

Sometimes banks have to withhold taxes on income made from the deposits at the bank. The W-9 provides your tax ID number and it helps you avoid withholding on this income. I think it’s standard operating procedure. Wikipedia says the form is never submitted to the IRS. It’s just so they can cover their asses in case you should have paid taxes on the income on this account.

Trillian's avatar

You will have to claim it as income and they will have to report it to the IRS.

marinelife's avatar

You might want to get some tax advice from an accountant before getting your money.

Adirondackwannabe's avatar

W-9 form is a request for taxpayer ID number. The IRS can run anything down that has your tax ID number on it. If there is interest earned on the money that was deposited they will look for it on your tax return.

LuckyGuy's avatar

It is trivial. They need to know whether or not to withhold tax on the interest now or give you the whole amount and have you pay the tax when it is due.

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