

Taxes Won’t Kill Bitcoin, but Tax Reporting Might - T-A
http://dealbook.nytimes.com/2014/03/26/taxes-wont-kill-bitcoin-but-tax-reporting-might/?_php=true&_type=blogs&_r=0

======
patio11
_Suppose you are self-employed, and you hire a virtual assistant in the
Philippines to help manage your administrative tasks, and that person accepts
payment in Bitcoin. Under the I.R.S. guidance, you have to obtain a taxpayer
identification number from the assistant, just as if you were paying the
person in dollars._

Not, to my understanding, actually accurate. Assuming your assistant in the
Philippines is not a US person and performs no work physically within the
United States, then their income from you is not US-source. You have no
obligation to 1099 them (and, indeed, filing a 1099 would be incorrect). If
you wanted to develop a paper trail for explaining to a later examiner why you
didn't 1099 them you could ask for a W8-BEN, which is basically just "The
named person certifies they are not a US person. Signed, Named Person" with a
few more form fields. You aren't even, to my understanding, obligated to get
that.

