June 06, 1990
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
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
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
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