October 02, 1990
Taxpayers to Provide Correct
Taxpayer Identification Numbers (TINs)
WASHINGTON - About 2 million taxpayers nationwide will soon be asked to
provide correct taxpayer identification numbers (TINs) to those who
pay them interest, dividends, rents, royalties, non-employee
compensation and brokerage transactions.
Notices are being sent by financial institutions and other
payers to make certain they have the taxpayers' correct
identification numbers. The numbers are required on information
returns payers file with IRS to report payments made to taxpayers,
Social Security Numbers are individuals' taxpayer identification
numbers -- businesses have employer identification numbers.
Taxpayers who receive notices must respond to the payer, not
the IRS, within 30 days by providing their TIN and certifying it as
correct. The notices taxpayers receive will include a TIN
certification form to use. Payers will start withholding federal
income tax at the rate of 20 percent from future payments if no
response is made.
The notices provide guidance for those taxpayers who also will
need to contact Social Security Administration, such as where the
name on a social security card needs correction.
Once started, withholding will continue until the taxpayer
provides the payer a certified TIN. Amounts withheld will be sent
directly to IRS by payers and taxpayers will claim credit for the
tax payments when filing their tax returns.
In September IRS provided listings of 5.6 million TINs to
payers. These TINs were on information returns filed by payers that
IRS could not match against TINs in its records. Payers sent IRS
500 million forms 1099 INT, DIV, MISC, OID, PAIR, and B to report
the payments they made in 1989.
Payers are reviewing their records to see if the mismatches
came from payer mistakes, such as transcribing TINs incorrectly onto
information returns. Only those mismatches which payers cannot
resolve by reviewing their records will result in notices to
Withholding tax from payments to those who do not provide
correct TINs is required by the Interest and Dividend Compliance of
1983, enacted to improve tax compliance on income not normally
subject to withholding. Correct TINs enable IRS to properly match
information returns against filed tax returns to ensure income is
property reported on tax returns.
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