I have been approached by an Australian web friend who is already working as a free lance writer doing software reviews for an American website dedicated to a particular high end cell phone. My friend writes for the whopping sum of $5 US per review so there is not a great deal of money at stake but the thing is that neither my friend nor the guy who owns the website wants any trouble with US law. The guy who owns the website lives here and he has never discussed with my friend either his citizenship or his business entity. Neither he nor his entity manufactures the phone.
My friend is obviously a contractor because he chooses when and how to write the review and is perfectly free to write reviews for other outfits. (My friend makes most of his money as an employee of a chain of radio stations in Australia. He is both a morning on air personality and the station's head tech person.) Is there a treaty that governs his situation or is he under the same rules as if he were here? Must there be any kind of withholding? Also is the fact that he is in Australia affect the manner in which the owner of the website reports the payments? Do I need to determine what kind of entity owns the station or anything else I don't know in order to be able to answer these questions? If my friend owes the US a tax return he will hire me to do it. The owner nor his tax professional have any knowledge of how to do the taxes in this case and they have asked my friend to find out and my friend has asked for my help. I will ask for a small sum if the owner wants a written opinion but under the circumstances I won't charge my usual minimum fee of $200 for that opinion.
My friend is obviously a contractor because he chooses when and how to write the review and is perfectly free to write reviews for other outfits. (My friend makes most of his money as an employee of a chain of radio stations in Australia. He is both a morning on air personality and the station's head tech person.) Is there a treaty that governs his situation or is he under the same rules as if he were here? Must there be any kind of withholding? Also is the fact that he is in Australia affect the manner in which the owner of the website reports the payments? Do I need to determine what kind of entity owns the station or anything else I don't know in order to be able to answer these questions? If my friend owes the US a tax return he will hire me to do it. The owner nor his tax professional have any knowledge of how to do the taxes in this case and they have asked my friend to find out and my friend has asked for my help. I will ask for a small sum if the owner wants a written opinion but under the circumstances I won't charge my usual minimum fee of $200 for that opinion.