What rights do you have to request a W9 when the payment is not reportable?  For instance, if the amount being paid to a first time (and supposedly one time) vendor is less than $600 or the payment is for a non-repotable settlement.  I ask because I would still like to document the payee (foreign vs USA citizen, etc).

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.

A settlement payment was written to the insured (a corporation) and their lawyer, who I will refer to as Joe.  I sent the 1099MISC to Joe, with the total settlement payment shown in box 14.  I then heard back from Joe's law firm saying the 1099MISC should be made out to the law firm, not the individual.

I am confused on how to handle this.  One the one side, your advise was as follows:  "Almost always the reporting follows the payment (only in a select few unique situations such as those involving "middlemen" and/or attorney/settlement payments). Thus who you write the check out to is who you should report to. In general what has happened is that you have written the check (or otherwise generated a payment) in the ordinary course of your trade or business for services provided by the person and TIN named on the W-9 you collected prior to issuing payment. Thus, if you issued the check directly to the individual then you will report to that individual. (This happens all the time for example in medical service payments when doctors have the check cut to them but then turn around request the clinic they work for be issued the form 1099)."  So I feel I should still report to the individual, Joe.

On the other hand, the law firm seems to be the functional beneficiary of the payment.  So there may be a case for this as well. 

1) How do you decide how to report in this case?  2) If you decide to go with the functional beneficiary (assuming that is a valid choice), what documentation should be collected to alleviate any issues that might come from a future IRS audit, where payment name would differ from the name that was reported on the 1099MISC (in this case, Joe)?

We have been getting quite a few W-9 requests lately from outside vendors and our tax department is requesting that I find out from you a good way for us to respond to them.

We have a W9 Form that contains the following information:

Name (as shown on your income tax return): Global XXXXX LLC

Business name, if different from above: fka Global XXXXX Inc

Check appropriate box: Other LLC with Taxable as a corporation hand written in

My question is: Since the organization is a LLC, even if there is a handwritten note stating they are taxable as a corporation, they should receive a W-9?

We have paid a particular vendor for services as a sole proprietorship and reported the payments on form 1099-MISC under the owner's name and SSN as indicated on the W9 form they submitted to us years ago.  They have now sent us a new W9 form which indicates they are now incorproated and have a new EIN.  I would assume that any payments made up to this point, would still be reported at year end in accordance with the information on the old W9 form and any payments issued going forward would fall under the corporate exemption and not be reported at all.  Is my assumption correct?  Also, when I ran the new EIN in the TIN Matching System, the result indicates "TIN entered is not currently issued."  Is this to be expected if the new EIN was recently acquired?  Can we assume that the number is correct even if a positive match was not returned by the TIN Matching System?

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?

When requesting an updated Jan 2011 W-9 from a vendor, I received the following response and it is not the first like it.  Can you help me respond correctly?  I am not finding information on how to complete the new form so I am not quite sure where there expanation is coming from.

In response, attached is the new W-9 for XXX Constructors, LLC (f.k.a. XXXA Constructors, LLC). Please note that the IRS recently changed the format and information required on the W-9 form. Previously the form would have shown only XXXA Constructors, LLC with its tax identification number of xx-xxxxx22.  Because the company is a limited liability company and is disregarded for tax purposes by the IRS, XXXA Constructors, LLC is now required to provide the name of its direct parent, XXXB Group, Inc., as the taxable entity, with XXXB Group’s tax identification number, and the name of XXXA Constructors, LLC listed on the second line. To avoid any confusion, we want to emphasize that XXXA Constructors, LLC is the entity obligated (or to be obligated) under contract and the entity that will be performing all services and receiving payments as specified in the contract. XXXB Group, Inc. serves only as a holding company and does not perform services. For all purposes other than the W-9, XXXA Constructors, LLC tax identification number is still valid and will continue in use.

Does a Withholding Agent need to have a W-9 on file before issuing a refund to a U.S. resident?

Does a company need to have a W-9 on file before issuing a refund to a U.S. resident/company?  This is not for services rendered, but an actual "refund."

Can you tell me where I can find information on the updated W-9 form?  We have a vendor stating that because of the revision as a disregarded entity they must give us the name of the parent company on the first line and their name on the second with the parent companies EIN.

Typically I would pay them under the EIN on the form as a DBA of line 1.  Their previous W-9 showed the LLC on line 1 as a Disregarded entity with a different EIN.  I solicited an updated form from our LLC vendors with Disregarded Entity.