How do I pay and 1099 report when the payee completes the W-9 with their name, business name, and social security number?
When a W-9 comes in and it has a persons name on line 1 with their social security number on it but the W-9 has a business name on line 2 and the invoice we recieve is for the buisness name, who should we make the check out to? The business name or the individual? We are purchasing items from them so the company is not providing us a service.
Validating Forms W-9 when they involve sole proprietor's or single member LLC's easily ranks as one of the more complicated compliance tasks you face. However, you must get it right. Here is what you need to know to do exactly that (and the answers to your questions).
If a Vendor Marks Disregarded Entity on the Form W-9 Are They Exempt From Reporting?
When a vendor marks a W9 as an LLC and then puts in the D for Disregarded Entity, are they exempt from 1099 reporting?
When dealing with single-member LLCs (also known as disregarded entities, owned by an individual), there are a number of issues.
What Lines on the Form W-9 Do We Use for DBA name's?
We have a very large vendor database where the DBA's were placed on the first line and the individuals' name on the second line ---these were our instructions in prior years. They have not kicked out for B-Notice purposes ---should we be concerned about this and work on changing these or since we have not had any problems - are they OK as is?
Questions about B-Notice's and LLC's/DBA's
We have received some B-Notice items for 2011.
On 1099s for partnerships and LLC's - should the legal name go on the first line and the dba on the second line? If this is incorrect, would this cause the 1099's to kick out on B-Notice statements from the IRS?
Also, if the address is not on one line ---would that cause the 1099 to kick out? One of the vendors kicking out has the Suite # on the second line of the address.
Do we need two lines for the Partnerships and LLC's - can we only have one name on one line?
We believe we have the ID numbers correct so we are trying to figure out what would cause these vendros to kick back.
Disregarded Entities and Form 1099 Reporting
We have had a couple of situations recently where groups insist they must bill/submit claims under the name and TIN of the disregarded entity (DE), but they then want us to report the payments under the name/TIN of the owner. Problem is our systems are not set up to handle multile TINs like this - if they bill using the DE TIN, the system will send the 1099 to that TIN and the name we have set up under that TIN. So, we offer up the following solution.
We tell them we can set them up to pay the DE name, but they have to bill using the TIN of the owner. In doing this we can set them up so the payment goes to the DE name, but the 1099 goes to the owner's name and TIN. However, to make that happen they need to bill using the owner's TIN.
We have gotten some push back on this where some groups say they cannot do this - that this would be out of IRS compliance for them to submit under the owner's TIN.
They also say it is out of compliance for us to report under the DE name and EIN, even though that is how the payments are being issued. Like I say, since our system cannot pay to one TIN and report to another, the 1099 will go to the DE name and TIN if they insist on billing under the DE TIN.
I disagree with both these arguments. First, I do not know how the IRS would ever say it is wrong to report payments as they are made. I also do not believe they would say it is wrong to have them bill using the TIN of the owner, even if we are paying the DE name.
I do understand that a DE does not file a Tax return, and therefore their income is captured by the owner. I am just looking for confirmation that handling as we propose to these groups does not cause a compliance issue between us and the IRS.
I hope this all makes sense.
Multiple W-9 Line Two DBA's: Which One Do I Document and Report?
I recently received a W-9 for a medical provider that gives the company name on line 1 and they attached a list of about 45 people that are a DBA of the company name - all under the same tax id.
Is this acceptable? Do I just report the name on line 1 without a DBA name at all?
Is LTD equivalent or similar to LLC?
One of our companies as sent us a W-9:
Name is ---------- LTD
They have marked as Corp and Exempt from Withholding.
I have matched with the IRS and the name and number matches.
I am under the impression that LTD is similar to LLC - and should be reportable.
The "eyeball test" has been tripping up information reporters for as long as it's been around. And for good reason. There is quite a bit of additional information hidden in the fine print of the regulation that makes the use of the "eyeball test" as not nearly simple as one would initially believe.
Validating 98-EIN and Foreign Sole Proprietor?
Is a 98-XXXXXXX EIN acceptable for a foreign sole proprietor to use to validate foreign tax documentation?
Also, does the foreign sole proprietor have to be performing their work in the U.S. as indicated by the part of the W-8BEN instruction “or you are engaged in a U.S. trade or business as a sole proprietor” for them to be able to use an EIN on their tax documentation?
Are Liability Insurance Premium Payments 1099 Reportable when Insurance Company is a Disregarded Entity?
Are liability insurance premium payments 1099 reportable when insurance company is a disregarded entity?
How are Different LLC Tax Classifications Reported on the Forms 1099?
When an LLC completes a W-9 form, they are required to enter a tax classification (D=Disregarded Entitiy, C=corporation, P=partership). How are these different tax classifications currently reported on 1099's?
First, and in honing in on the word "currently" in your question note that...
for TY2010 and in regards to 1099 filing, there is no reporting to corporations but for those corporations who are medical or legal service providers (it is not until next year's reporting season that, under current law, you will report to all corporations).