Articles and Tax Tips

You have received an invoice and Form W-9 from a corporation whose TIN starts with 98.   Read on for more relevant information, decide what you would do with this vendor; and then see our analysis as to what you should consider vis a vis your IRS documentation, validation, and compliance requirements.

For this week's tax tip let's take a look at a real world situation. This one involves a former employee who has started their own company, and yet gets approximately 80% of their business from their former employer. Read on for more facts, and then our analysis as we try and determine how the IRS would classify this payee.

The Facts:

Hopefully you know that the new (August 2013) Form W-9 form has a new provision entitled “Exempt payee code (if any)”. However, must your payee fill in this field if they fall under one of the 13 listed exemption groups? In this week's tax tip let's take a look at IRS expectations regarding your compliance requirements and this new field.

It's that time of the year again. You are preparing to file information returns and lo and behold you can't find your vendor's TIN. No B-Notice has ever been issued but the question remains; how many times per year does the Internal Revenue Code require you to solicit a payee for a missing TIN?

Box one of the Form 1099-MISC continues to cause confusion regarding identifying reportable payments. This week we shall look at one such box one issue: the lease of real property and when you should NOT be reporting such payments on the Form 1099-MISC.

For years the Form 1099-MISC box 6 vs. box 7 debate has confused information reporters. This week we want to remind you of a clear and simple rule that you can rely upon so that this year your reporting is in IRS compliance.

Though you are currently focusing in on federal and state level reporting issues for this filing season we do want to remind you that many cities also have Form 1099 filing requirements. For instance, take a look at this list of Michigan cities: