Posted by aanotary on 1/14/11 6:22pm
Msg #368716

Question

A company that I have not worked for in over 2 years is requesting a w9. I asked them why? They said they are being audited. Am I required to provide this? I do not plan to ever work for them again. Thanks for your input.

Reply by JulieD/KS on 1/14/11 7:16pm
Msg #368720

I don't think they can force you to, no. It's really up to you. The only thing they can do is hold your check...and if they owe you no money, then there's nothing to hold. It may be a case of the accountant requesting a W9 from all contractors. I'd just skip it if it were me.

Hopefully when you do provide a W9 to company, you use an EIN rather than your SS#.

Reply by PAW on 1/14/11 9:19pm
Msg #368735

Answer

If you have previously worked for or are currently working for a company, they have the right to request a W-9 (or equivalent substitute). You must comply with their request. (Source: IRS Instructions for use and preparation of a W-9)

Specifically, the IRS has the following to say on this subject:

"A person who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) to report, for example, income paid to you, real estate transactions, mortgage interest you paid, acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA.

"If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect."

Reply by twil4_WI on 1/14/11 9:40pm
Msg #368746

Re: Answer

But be careful, last year I received w-9s from 2 companies (both defunct) for WAYYYY more than they ever paid me, and I had a heck of a time worrying on my return when I couldnt get them to rescind them.

Reply by sueharke on 1/14/11 10:48pm
Msg #368749

Re: Answer

A W-9 is a form to identify the person who is an independent contractor. The 1099 Misc is the form as to how much money you made. If the signing service incorrectly state the amount they paid you on the 1099 you have two choices (1) request an amended 1099 (2) if they don't reply with the correction, keep a record of all payments you received and tell the irs the SS made a mistake and will not correct the 1099 Misc, then pay taxes on the income you actually received. As a CPA this is how I would handle a clients issue. If the IRS audits, take your check and proof of payment to the audit with an Enrolled agent or CPA and let them do the talking. Do NOT handle the issue yourself.

Reply by Glenn Strickler on 1/14/11 9:39pm
Msg #368745

In addition to a legal requirement, if you don't , the company will use what info they have on you and mention to the agent that is auditing them that is all they can get because you are being uncooperative, then you will be on the IRS's radar and might end up being audited yourself.

Audits are no fun.

Reply by JulieD/KS on 1/15/11 9:43am
Msg #368790

I'm confused. Why would there be a requirement to furnish another W9 to a company if you have not worked for them in 2 years and have no intention to?

Reply by PAW on 1/15/11 10:06am
Msg #368795

If the company is being audited, and they do not have a W-9 on file, then a new one is requested. A lot of times, W-9s are thrown out by mistake or the company policy is to get new W-9s yearly or on some other criteria.

It really doesn't make any difference why the company is requesting one, they have the right to do so and you must comply with their request. It may be that the audit has gone back more than 2 years and the contractor's name appeared in the audit, but no corresponding W-9 was found. (We could sit here and second guess the reasons, til the cows come home. It isn't that big a deal just to comply. All the more reason to have an EIN instead of using your own SSN as the Tax Identification Number (TIN).

Reply by Blueink_TN on 1/15/11 10:21am
Msg #368797

But what if..

the receiver did not claim that monies on their return that year? Would a w-2 being furnished for monies paid two years prior, spark a W-4 to add income to that year? And if so, would the receiver need to amend their (prior) return?

Reply by Blueink_TN on 1/15/11 10:28am
Msg #368799

Realizing that last post made no sense...

Getting another cup of coffee and trying this question again
If a 1099 is issued two years later, would the receiver need to amend their return to show this amount received (if they had not)?

Reply by Linda_H/FL on 1/15/11 10:33am
Msg #368800

LOL..glad I deleted my initial response..:)

Sure they would - but that's their problem - amend it or fight the truth of the 1099. Every year I report income for which I don't have a 1099 - not everyone provides them but I got the money and I'm too lazy to worry about audits and amended returns..

I'd have no problem giving this W-9 - they may be updating their records as the OP is still in the database - they don't care that the OP doesn't ever intend to work with them again...maybe they got a new bookkeeper who's cleaning up the act. Provide it but keep it on file in the back of my mind to watch for a 1099 that I shouldn't have.

Reply by JulieD/KS on 1/15/11 2:36pm
Msg #368824

Re: LOL..glad I deleted my initial response..:)

If you are relying on 1099MISC forms to guide you in how much to report on your tax return, then you probably are not reporting all your income. The 1099MISC forms are not so that the companies will do your bookkeeping for you; it is for verification of their expense and also so that the IRS can verify that their contractors are reporting th income.

The 1099MISC forms I receive from title companies go straight into the box with my other receipts. I keep track of my total income in Quickbooks.

Reply by Linda_H/FL on 1/15/11 4:50pm
Msg #368831

I use Quicken H&B...then TurboTax.

Every job I do gets an invoice - even general notary work, no matter how small - the customer gets an itemized receipt, the copy of the receipt is stapled to the invoice, invoice marked paid, put in "Income" folder, totaled monthly and at year end.

It's just not worth NOT keeping track and reporting it all.

Reply by parkerc/ME on 1/15/11 4:59pm
Msg #368833

Re: I do not plan to ever work for them again.

To avoid the same situation in the future, if you really don't intend on working for them again, I would notify them to remove your name from all their SA databases and void their contract (if any) with you.