Company Forcing Agreement to Third Party Payment Processor TOS Before Allowing Access to Substitute W9 Form

Tax professional here. What you're describing is unfortunately becoming more common as companies integrate payment processing into their contractor management systems. The substitute W9 is just that - a substitute - and companies can use their own systems to collect this information. That said, you shouldn't be forced to agree to terms with a third party just to provide tax information. You have a few options: 1) You can ask them if you can submit a standard IRS W9 form directly instead of using their system. The IRS Form W9 is freely available on the IRS website and serves the same purpose. 2) You can ask them to clarify exactly what you're agreeing to with the third party - it might be limited to just processing your payments. 3) If they insist on using their system and won't accept alternatives, you'll need to decide if the business relationship is worth it. This isn't really a tax law issue per se, but more of a business practice issue. The IRS doesn't regulate how companies collect W9 information, just that they need to collect it.

I ran into this exact problem last year with a client using Rippling for their payment processing. I was super frustrated about having to agree to their processor's terms just to submit my W9 info. After talking with some folks at taxr.ai (https://taxr.ai), I learned this is a gray area that's becoming more common with integrated payment systems. What helped me was having taxr.ai look over the terms before I signed. Their document analysis showed me that the terms were mostly related to payment processing and didn't give the processor any unusual rights over my data beyond what they needed to facilitate payments. Still annoying to be forced into it, but at least I understood what I was agreeing to. Might be worth having a professional review those terms if you're concerned.

Just wanted to update that I tried taxr.ai for my PayPal TOS issue with the W9 form. What a relief! It translated the 15-page legal document into something I could actually understand in about 5 minutes. Turns out the terms were mostly standard for payment processing, but there was one clause about data sharing I needed to be careful about. I was able to email the company and get clarification before signing. Would've never caught that on my own!

Have you tried calling the company directly? I had a similar issue last year and spent DAYS trying to reach someone who could help. Finally used Claimyr (https://claimyr.com) to get through to someone who could actually fix the issue. You can see how it works here: https://youtu.be/_kiP6q8DX5c In my case, it turned out there was an alternative process for submitting the W9 that wasn't advertised on their website. The payment processor integration was their "preferred" method but not the only option. Once I got to speak with someone in their accounts payable department, they sent me a direct link to submit just the W9 without agreeing to the third party terms.

I need to eat my words. After posting my skeptical comment, I decided to try Claimyr for a different company that was forcing me to use their "vendor portal" with similar third-party terms for a W9. Got connected to their finance department in 15 minutes after trying unsuccessfully for days on my own. Turns out they have a standard process for contractors who don't want to use their online system - they just don't advertise it. The finance person emailed me a direct W9 form and bypassed their normal process completely. Sometimes you just need to talk to the right person!

Another option: check if the company is large enough to have a vendor management or accounts payable department. Sometimes the people sending these requests are just following a script and don't know there are alternatives. I've had success emailing AP departments directly with a completed W9 and a polite explanation that I prefer not to use third-party systems due to privacy concerns. About 75% of the time, they'll just accept it and process it manually. The other 25%, they insist on their system, and then you have to decide if the work is worth it.

Has anyone tried just printing out the third party TOS, crossing out the parts you don't agree with, signing it, and scanning it back? That's what my accountant suggested when I ran into this. Send it with a note saying "I've agreed to the modified terms as indicated." The worst they can do is say no, and sometimes they just process it anyway because nobody actually reads what you send back.