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USAA and W-9
Old 02-22-2018, 04:00 PM   #1
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USAA and W-9

USAA has asked me to sign a W-9 form. When I asked why, they said it is part of the depositary agreement. I've had an account with them for over 20 years, so they don't need it to verify my identity or citizenship. The W-9 is for income and the 1099-INT is adequate for them to report my interest income. The phone rep was unhelpful, he read something but would not point me to a document or forward something that would explain this.

There are quite a few USAA customers here - is this a common practice?
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Old 02-22-2018, 04:13 PM   #2
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I've been with USAA for 13 years now. And I've never done a W-9 or been asked to do a W-9. Is this new? Why would I even need to do a W-9. I get a 1099 Consolidated

Have you been to the community boards?
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Old 02-22-2018, 04:50 PM   #3
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That's really odd. USAA has never mentioned a W-9 to me in the almost 50 years I've done business with them them.
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Old 02-22-2018, 07:40 PM   #4
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I've been with USAA for 40 years. I do banking, have credit cards, insurance, and most of my retirement portfolio with them. I have never sent them a W9, or been asked to send one.
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Old 02-22-2018, 07:43 PM   #5
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search online as there are many posts from others. Most requests seem to be in error. Others are for signature cards/SS verification. Yes the form is also used for tax ID for employees... maybe the primary use.

It really sounds like a bug in USAA's system
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Old 02-22-2018, 10:33 PM   #6
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I think this is required any time they have to report interest income to the IRS. If your interest income is too low to bother reporting they wouldn't need it.
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Old 02-23-2018, 01:50 AM   #7
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That sounds really strange from an institution that already provides a 1099 year after year. My wife and I have had to complete and sign W-9s for our UK bank to confirm our SSN for FATCA reporting.

Sounds maybe like busy work that someone was given. “Jimmy, confirm that all the SSNs in our system are correct”.
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Old 02-23-2018, 04:58 AM   #8
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Sounds maybe like busy work that someone was given. “Jimmy, confirm that all the SSNs in our system are correct”.
That's what I was thinking.

I'm beginning to wonder about USAA Bank. They have always been excellent, but on my last statement I saw they had processed a check written by DW twice. It was listed twice on the statement and there were two identical images of it on the last page, so pretty obvious. When I contacted them about it, there was no apology, just that they "submitted it for reversal" and I should see the correction within 3 to 5 days. Pretty sad IMHO.
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Old 02-23-2018, 08:14 AM   #9
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40+ years with USAA and no mention of a W9 requirement
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Old 02-23-2018, 08:21 AM   #10
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I think this is required any time they have to report interest income to the IRS. If your interest income is too low to bother reporting they wouldn't need it.
+1
They're just auditing. Perhaps a result of their internal audit identifying a hole in their systems.

ETA: I remember a couple of entry level programmers who were given this report as a very early assignment.
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Old 02-23-2018, 08:26 AM   #11
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Almost 50 years with USAA and don't believe I have ever been asked to sign a W9.
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Old 02-23-2018, 09:25 AM   #12
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Update - I've had 4 conversations with different USAA reps. Not very enlightening, but somewhat entertaining.

The bank doesn't need this for interest payments, that's covered with the 1099-INT.

The banking people clarified that the W-9 for is required for all bank accounts, period. None of the reps / supervisors know why this form is required, but they all guessed anyway. Most common was "to stop the IRS from taking money from my account" and "in case the IRS needs to get into my account".

I agree with those that figure this is because of some combination of an audit and busy work. My account is 21 years old, so those civil-war era account-holders may get hit someday as well.

Why is this form required? After all, it's primary purpose is a tax form for independent contractors. My WAG / speculation: It wasn't used back in the day, and now is, as it is a federal (IRS) document the bank has where I attest to my name & SSN, and if I'm lying it's a federal crime.
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Old 02-23-2018, 09:28 AM   #13
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My account is 21 years old...
Ah, that solves it! Lots of things apply once you turn 21.
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Old 02-23-2018, 09:42 AM   #14
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Is it really part of the depository agreement? I suspect it is buried in the fine print. What happens if you refuse?

I believe an additional purpose of W9 is to avoid backup withholding (28%). Could that be the reason? I'm not sure what circumstances require the issuer to withhold at this high rate.
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Old 02-23-2018, 12:45 PM   #15
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If you hadn't said you called back and dealt with multiple people my mind would be yelling "SCAM" at top volume. No one else needs the form, they never needed it before, but they want you to send something with pretty much everything they need to open bogus accounts in your name. Even if you called them back I'm still thinking scam. Did you call the corporate office or the number on other correspondence that you are certain came from them?
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Old 02-23-2018, 12:49 PM   #16
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On the community board it seems that only certain people get the request to complete a W-9. Additionally USAA is responding to them personally rather than posting a generic response. So I'm wondering what the criteria is for selecting those that need to complete this form. Like I said earlier, no one asked me to do it.
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Old 02-23-2018, 02:08 PM   #17
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Got this from IRS_


"Another purpose of Form W-9 is to help the payee avoid backup withholding. The payer must collect withholding taxes on certain reportable payments for the IRS. However, if the payee certifies on the W-9 they are not subject to backup withholding they generally receive the full payment due them from the payer.[2] This is similar to the withholding exemptions certifications found on Form W-4 for employees."

"There may also be a $50 penalty for each instance in which Form W-9 is not filled out.[8]"





Just complete the form. Don't you trust your government?
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Old 02-23-2018, 02:30 PM   #18
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Thanks for the link MickeyD

Yeah .... trust in short supply That said, I only got $26 interest from USAA last year. I invest at Schwab and pay bills from USAA. Schwab never asked me to sign one either but I have it set to 22% fed / 6% state
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Old 02-23-2018, 02:34 PM   #19
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Got this from IRS_


"Another purpose of Form W-9 is to help the payee avoid backup withholding. The payer must collect withholding taxes on certain reportable payments for the IRS. However, if the payee certifies on the W-9 they are not subject to backup withholding they generally receive the full payment due them from the payer.[2] This is similar to the withholding exemptions certifications found on Form W-4 for employees."

"There may also be a $50 penalty for each instance in which Form W-9 is not filled out.[8]"





Just complete the form. Don't you trust your government?
The government, specifically the IRS, already has the data. They've had the ability to collect it since the 1980s.
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Old 02-23-2018, 04:04 PM   #20
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On the community board it seems that only certain people get the request to complete a W-9. Additionally USAA is responding to them personally rather than posting a generic response. So I'm wondering what the criteria is for selecting those that need to complete this form. Like I said earlier, no one asked me to do it.
USAA says every account must have one. Seeing how many here do not, this resulting from an audit rings true to me.

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Just complete the form. Don't you trust your government?
Of course I do. And I will take your advice and fill out the form, because I'm not yet ready to change banks again.

Edit to add - what I find most irritating is their insistence this is to verify or confirm identity, because it does neitherr
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