How Uphold Elevates User Experience and Achieves Tax Compliance with Taxbit Digital W9/W8

PROBLEM

Traditional vendors are not built for the challenges of the digital economy

• Traditional tax compliance vendors are not built for the demands of the digital asset economy defined by evolving regulations.
• As a result of the landmark Infrastructure Investment and Jobs Act of 2021, crypto brokers will soon be required to collect and report significantly more customer tax information to the IRS.
• As a key first step and industry best practice for verifying customers’ taxpayer information, leading digital asset exchanges have already begun collecting and verifying Forms W-9 in advance.
• Failing to collect, validate and maintain customer information can potentially result in millions of dollars of withholdings for customers in addition to operational burdens and liability risks for enterprises.
• The lack of automation with Forms W-9 will lead to incredibly difficult Form 1099 filing challenges.
• It will also increase the risk of receiving the very dreaded “B Notice” from the IRS, and potential corresponding penalties for filing Forms 1099 with incorrect or missing taxpayer identification numbers (TIN).

SOLUTION

Taxbit Digital W9 solution

• The process of collecting, validating, and storing Forms W-9 and W-8 is complex and risky to build in-house, with high stakes for inaccuracy.

• Enterprises require a modernized tax information reporting system that reduces operational costs, improves user experience, and minimizes regulatory uncertainty.

• This need for a holistic solution was a key priority for Marco Martins, Lead Product Manager at Uphold, who praised Taxbit’s ease and speed of integration.

• Taxbit’s Digital W-9/W-8 solution, powered by robust APIs or easily embeddable SDKs, integrates seamlessly with Uphold’s onboarding and development processes.

• The solution is highly scalable and designed to support even the most demanding enterprise environments.

RESULTS

Taxbit automates the collection, validation, and storing of Forms W9. Taxbit has supported Uphold in:

• Collecting and validating nearly 500,000 W9 Forms
• Automating the matching of more than 1.5 million TINs (taxpayer identification numbers)
• Operating at a minimal API latency of 567ms

As Marco Martin Lead Product Manager at Uphold stated “together, we have enabled a seamless tax onboarding experience for Uphold’s U.S.customers. And as a Taxbit customer myself, I can safely say their team has provided us with world class support.”