Notices About Missing Taxpayer
Identification Numbers Go Out

WASHINGTON - Many banks and financial institutions will soon be getting notices from the Internal Revenue Service about information returns they filed for 1988 that were missing taxpayer identification numbers (TINs) or had TINs that did not match those in IRS records.

The notices, being mailed later this month, will ask the payers to certify that they exercised due diligence in getting correct TINs from those to whom they paid interest, dividend or other types of payments.

Legislation enacted in 1983 requires payers to obtain TINs, which are social security or employer identification numbers, from payees. This is usually done with Form W-9, Request for Taxpayer Identification Number and Certification, at the time accounts are opened. Payers include TINs on information returns, such as Forms 1099, they send to the IRS reporting payments made.

With the TINs, the IRS is able to match information returns against tax returns to ensure that the income has been correctly reported on the tax returns.

A penalty of $50 against the payer is prescribed for each information return sent to the IRS missing a TIN, or having one which differs from IRS records, if the payer did not exercise due diligence in attempting to obtain a correct TIN.

Payers receiving the notice are not required to contact the payees, but within 60 days of the notice they are to respond to IRS certifying that due diligence was exercised. Those instances where the payer determines that due diligence was not exercised are reported by the payer to the IRS on form 8210, "Self-Assessed Penalties Return."

Later this year, the IRS plans to contact payers about TINs on 1989 information returns that are different from those in IRS records. At that time payers will notify those customers where a discrepancy exists to provide within 30 days a TIN certified as correct. If TIN certification is not provided, payers will begin "backup" withholding of federal income tax at a 20 percent rate on all future payments.

Taxpayers who get such a notice later this year should review it carefully as it will explain how to resolve TIN discrepancies. Additional information about providing TINs to payers of interest, dividends and other types of payments is available from the IRS by calling 1-800-424-1040.

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