I received the following response:
The need for a "withholding certificate" (a W-8 form, 8233 form or W-9 form) stems from the type of payment that will be made. Amounts subject to withholding when paid to a foreign individual or entity, under Internal Revenue Code chapter 3, are defined in Treas. Reg. sec. 1.1441-2. Amounts subject to withholding under I.R.C. chapter 4 (FATCA) are defined in Treas. Reg. sec. 1.1473-1(a). In general, these are payments of "fixed or determinable annual or periodical income" sourced to the U.S. that section 61 of the tax code includes in gross income, but there are items of income specifically excluded by Regulations under chapter 3 or chapter 4. If you determine that the payments are in a category of income subject to chapter 3 or 4 rules, then you need to identify the payee/beneficial owner of income and payee/beneficial owner's status. The primary means of doing that is to request the appropriate type of withholding certificate. (Or in some circumstances certain documentary evidence might be accepted instead of a withholding certificate, as specified in Regulations sec. 1.6049-5(c)). In the absence of the appropriate valid certificate or acceptable documentary evidence, Regulations dictate presumptions that apply to categorize the type of payee and whether to presume U.S. or foreign status of the payee.
You or your tax advisor should make a determination because you know the specific facts and circumstances of the payment situation. We don't guess about facts or circumstance, so in this instance we stick to describing the rules, which are written in broad terms, exclude specific things, and dictate a process to go through to determine your compliance obligations.
I would suggest you look at the regulatory definition of the word "income" to establish whether your payments meet that definition--or not. That will give you an indication of whether you need to withhold and report. You may also wish to try contacting the IRS foreign reporting helpline at 267.941.1000.
If you would like to confer directly with COKALA, here is their information:
Office hours are 8:30 a.m. to 6:00 pm. Eastern time.
COKALA Tax Information Reporting Solutions, LLC
PO Box 2224
Ann Arbor, MI 48106-2224
This question was answered by COKALA Tax Information Reporting Solutions, LLC, a 3rd party, independent advisory services firm offering experienced and practical help for tax regulatory compliance for Forms W-9, W-8, W-2, 1099, 1098, 5498, 945, 1042, 1042-S, and state reporting. You can learn more about them at www.cokala.com.