No Social Security Number?by Gerald P. Nehra Can you work an MLM program in your own name without a Social Security Number or a Federal Tax I.D. Number? Maybe. It's "Maybe" because you need to be connected to a Company who understands what they can and cannot do and is willing to do some additional book work and special handling. Most Companies will decline to allow you to sign on as an independent representative unless you provide the Company with a Social Security Number or a Federal Tax I.D. Number. However, there is no law prohibiting Companies from doing business with someone without a Social Security Number or a Federal Tax I.D. Number. What the Government really wants is Form 1099 notification (thus the Number requirement,) or THE MONEY. If a Company refuses your application lacking a tax number because "It's the Law" they have misspoken. Here is how a Company can accommodate you if they choose to: ABC Company Policy ABC will do business with someone without a Social Security Number or Taxpayer Identification Number. A Social Security Number or Taxpayer Identification Number will ALWAYS be requested. If a Social Security Number or Taxpayer Identification Number is not provided, the Representative should be notified as follows: ABC must comply with Federal Law regarding withholding. ABC Representatives who do not furnish a Social Security Number or Taxpayer Identification Number to ABC will find their bonuses and commissions subject to withholding at 31% if:
The person or department issuing bonus and commission checks needs to be informed of, and instructed to implement the procedure. Note that I said "if they choose to. " The administrative burden on a Company is significant, and the penalty for a mistake is that the Company owes the tax. Some companies that know the exact wording of the law say "NO" in a more legally correct way: "The Company, as a matter of business practice, only chooses to do business with someone with a Social Security Number or a Federal Tax I.D. Number." I have been asked if there is a discrimination case there somewhere, but you need a protected class. So far the "unnumbered" have not been added to the civil rights statutes. If you run into this, it does no harm to ask for an exception. You must keep in mind however, that unless you gross under $600.00, the Company must withhold at a 31% rate Gerald P. Nehra is an MLM Specialist Private Practice Attorney. He is one of only a few attorneys nationwide whose practice is devoted exclusively to direct selling and multi-level marketing issues. His 25 years of legal experience includes 9 years at Amway Corporation where he was Director of the Legal Division. He can be reached at 1710 Beach Street, Muskegon, MI 49441, 616-755-3800, 616-755-4700 FAX. Credentials and Billing Information are available through Fax-on-Demand at 803-548-3299, ext. 3088, and E-Mail Auto Responder at MLMAtty@memo.net. His E-Mail Address is MLMAtty@aol.com Permission is hereby granted to duplicate this article, AS LONG AS the biographical information above is included. |
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