Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.
If you do not live in the United States
, and you do not perform work physically in the United States, then you have no tax liability
to the United States.
You only have a tax liability to the United States if you are a US Citizen, US Resident (such as a green card holder), or if you perform work inside the US. You would also have a liability
to the US if you had a physical office inside the US.
Your business partner does not have to withhold any taxes from your pay. However, if you were paid to come to the United States for part of the engagement, you would have to pay tax on the earnings you had when you were inside the US. Then, your business partner would have to withhold 30% of your payment and remit it to the IRS.
As far as the IRS goes, there are no required documents for you to be able to work on US clients - provided that you are doing the work while you are in China.
Please let me know if you need further clarification.
** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid, but the Web site will still collect your payment. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site**