Is this a scam?

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James Puckett
James Puckett Posts: 2,020
in Type Business
Someone making a purchase is asking me to provide an IRS W9 form and use a weird payment system just to purchase a font. It’s a film industry company. Is this normal or is someone collecting information for a scam?

Comments

  • Thomas Phinney
    Thomas Phinney Posts: 3,037
    Could be either. But it is not implausible.

    I once had a law firm that made me sign up on their own instance of some payment system (IIRC), just to pay me for a deposition. (This would be the only payment I would get from them, as like most depositions, it was being paid for by opposing counsel.) Among other super-irritating hoops I had to jump through for that one.

    If the license $$$ is small, you could just tell them to do it your way.  :tongue:
  • Kent Lew
    Kent Lew Posts: 1,004
    I’ve had to sign up for corporate payment systems for large projects. And in those cases a W-9 is pretty standard. They’re needed for issuing 1099s for payments to vendors and contractors that total more than $600 in a year (set to increase to $2000 in 2026 due to recent legislation). 
    Most corporate accounting depts will just insist on a W-9 to onboard a new vendor.
    If the license your film industry customer is seeking is less than $600 and they don’t expect to license anything else from you in this calendar year, then you could try to persuade them that it’s not necessary. But you could just end up chasing away the sale.
    You have to decide whether this is a friction worth engaging in.
  • John Hudson
    John Hudson Posts: 3,451
    For large corporate clients, this isn’t unusual. They need to register suppliers as vendors in their system in order to process payments. That’s been the case for all the big US tech companies we’ve done work for.

    Be aware that sometimes additional requirements come with vendor registration. One US tech company makes us to do annual ‘Code of Conduct’ training, and tried to get us to undergo an annual data security certification that cost >$8,000. Thankfully, our project managers at the company we able to convince them that fonts are not a significant security issue, but only after I’d spent a huge amount of time and expense jumping through hoops.
  • Fie Clarke
    Fie Clarke Posts: 2
    As Brit I have done a few bits with US firms and the W9 if standard but the ball was very much in my court when it came to being paid. If its a its a reputable company then its probably fine but at the same time if they buying from you then its usually your payment terms 
  • Thierry Blancpain
    Thierry Blancpain Posts: 215
    Always insist on delivery upon receipt of payment in full. "It’s just company policy, sorry." 

    Suddenly their "we can’t do any better than NET90 payment terms" turns into "have you received the payment we sent yesterday?"
  • Cory Maylett
    Cory Maylett Posts: 252
    edited 3:49AM
    Take this with a grain of salt because I'm neither an accountant nor a lawyer. However, I've done a lot of work in the US as a freelance designer and a solo LLC owner over several decades.

    As I understand it, businesses hiring work from independent contractors must obtain a W9 form when the work totals over $600 in any year and then report those payments to the IRS. However, if the business is buying an already existing product, the W9 isn't applicable.

    In other words, if a company buys an already existing font family (a product), the W9 isn't necessary. However, if they request modifications to the family (a service) that total over $600, the W9 is required, and they must send you a 1099 form at the end of the year stating how much they paid you for the service. This ensures you have a record of the payment and that they've reported it to the IRS.

    All that considered, some companies want W9 forms for anything purchased from an independent contractor. I suppose they feel it's best to deal with the possibility up front as a matter of policy rather than to remember to deal with it later when someone in the company asks you to perform a service rather than selling them an already existing product.
  • Thomas Phinney
    Thomas Phinney Posts: 3,037
    Short version: If it is a retail product, unless your EULA is very unusual, you are not an independent contractor, and there isn’t a legal requirement for a W-9. Otherwise, every customer licensing $600+ in fonts (or anything else!) would need a W-9.

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