Most people unknowingly enter into a binding tax relationship with the federal government by signing IRS forms like the W-4 or W-9, which classify them as U.S. persons and subject their labor to federal income tax withholding. These forms authorize the IRS and employers or payers to withhold income and issue tax documents like the W-2 or 1099. In contrast, the W-8BEN is used to lawfully declare foreign status, exempting the individual from withholding and shifting the legal classification of their income. However, using the W-8BEN requires proper status correction, operation through a foreign trust or entity, and working under private contracts rather than statutory employment. Without this lawful foundation, misuse of the W-8BEN may be considered fraudulent by the IRS. Understanding which form you use — and why — can dramatically affect your tax obligations and legal standing.
The change from using the term “chauffeur” to “driver” is not just about vocabulary; it’s a shift that allows states to regulate private vehicle use as commercial activity. This adjustment has significant implications for citizens, especially regarding the fundamental right to travel, which has been protected by the Supreme Court in numerous rulings. Let’s break down how this shift affects the distinction between private travel and state-regulated commercial driving.