Suppose that I do work for a US company as an independent contractor, and I'm neither in the US, a US citizen or a US resident. As such, I would fill in a W-8BEN form for tax purposes. Would I then be allowed to receive payment for my services into a US bank account in my name?

Such a bank account could for instance be the one offered by TransferWise, which is easy to open for someone living, say, in the UK. I'm not asking whether it is technically possible, but whether it would be legal under US tax law.

Online search suggests this is an option, however I'm aware of a specific business (whose name I won't disclose) which claims to be unable to pay foreign independent contractors in a US bank account.

  • 1
    Did they say this was because of US law, or because of local law? I also know certain institutions in a certain Anglophone country have said that "they can't", but it turns out that is a company policy connected to ideas about law, not actual law.
    – user6726
    Sep 11, 2019 at 17:13
  • @user6726 That's a good point. I think they implied it was a legal requirement under federal law, but did not state so explicitly
    – John Donne
    Sep 11, 2019 at 17:28
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    @user6726 another option is that it's entirely legal, but involves an unduly burdensome reporting requirement or the risk of having to mount a legal defense. It's not uncommon (and not necessarily unreasonable) for the outcome of a cost/benefit analysis to be expressed as "we can't."
    – phoog
    Sep 11, 2019 at 17:48

1 Answer 1


Yes, it is legal under US tax law. US tax law is concerned with collecting tax. The questions that tax law asks are

  1. Must the income be declared to the IRS?
  2. Is the income taxable?
  3. How much tax is due?

Whether US tax law requires the income to be declared or considers it taxable does not depend on whether it is paid to a US or foreign bank account. This also has no effect on the rate of taxation. US tax law is not concerned with the specific route the money takes to get from your client to you.

If the income is in fact taxable, and you declare it and pay tax accordingly, you will not have violated any US tax law.

  • Thanks for your answer! Your reasoning makes sense. Maybe this is asking too much, but do you have some official-ish source to support this?
    – John Donne
    Sep 11, 2019 at 17:31
  • @JohnDonne the IRS has an extensive and complicated area on their site concerning taxation of nonresident aliens. I didn't see anything explicitly addressing your question, however (about the legality of the transfer). You might also look at the banking regulations and the statutes on which they are based, but they are also rather obtuse.
    – phoog
    Sep 11, 2019 at 17:39

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