So that our non-subscribers can get a better flavor of the types of questions we answer for our current subscribers please see below for a listing of questions which we have answered, and that have recently been added to our Tax FAQ Database.

Question #1

Hi- my question is: we have certain vendors that have multiple payment sites (meaning AP might pay a certain invoices to a different address like a PO Boxes which might be in different states according to the invoice) for the same vendor. Do you report that payment to that particular state? The way our system handles it is that the paper forms sent to the recipient get consolidated with all invoice amounts for that specific vendor but when we generate our electronic file sometimes one vendor is in the file twice because there might be a state code attached to one payment and another state code attached to another payment but within the electronic file the address information for both the lines for that vendor is the same. I'm not sure how the system determines which state address to use in the file. Other times there is a state code attached to one line and no state code attached to the second line for the same vendor probably because the other payment was made to a state not participating in the Combined Filing. We have several issues like this and I want to make sure that we file it to the IRS correctly.

Question #2

What is your opinion in a case where we are doing business with a hospital that wants us to cut checks in the name of indivisual doctors, but then send the 1099 for the payments made to all those doctors in the name and EIN of the hospital? It is our contention that if we issue a payment to an individual in this case that we must report those payments to the individual's name and SSN. Would you agree? I believe there is a distinction between these situations and true DBA set ups.

Question #3

We sold the stock of a subsidiary this year to an unrelated third party. What is our reporting obligation for forms 1099 and 1042? Are we required to report from January 1 to the date of sale? It seems that because the EIN of the subsidiary will now belong to the new owner as a result of the stock sale (not an asset sale), that the new owner would be responsible for all 1099 and 1042 filings for the year. If we both file forms for the same company/EIN, won't it create a problem with the IRS? Is this correct or have I missed something?

Question #4

Foreign person reporting: I recently received a payment request for a individual with a SSN that begins with 99. My recollection is that this means a foreign national. Is this correct? I ran the name and number through the IRS database and it matched. Assuming a foreign national, my research shows I need a form W8BEN and must withhold 30%. But since the person has a valid tax id (ITIN?), is this still true? What else do I need to do? Is the withholding amount still correct?

We hope you have found this sample interesting. Please note also that we don't merely answer such questions for the organization that asks them, but, in turn, scrub the question for private information and add it to our Tax FAQ database so that all subscribers can learn from their peers experiences.