SEC. 14.TIN MATCHING FREQUENTLY ASKED QUESTIONS (FAQ’S)
1. What is a TIN?
The term “TIN” is defined as the identifying number assigned to a person under Internal Revenue Code,
Section 6109. Specifically, a TIN may be a Social Security Number (SSN), Employer Identification Number
(EIN), Individual Taxpayer Identification Number (ITIN), or Adoption Taxpayer Identification Number
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(ATIN). A valid Social Security Number may only be issued by the Social Security Administration. An EIN,
ITIN or, ATIN may only be obtained through the Internal Revenue Service.
2. What are the requirements for providing a payee TIN to the IRS?
Internal Revenue Code (IRC) Section 6109(a) (1) provides that any payer required to file an information
return must include the payee’s correct TIN. IRC 6109(a) (2) requires the payee to furnish their correct
TIN to the payer. IRC Section 6109(a) (3) requires a payer to request a payee’s TIN and include it in any
returns filed with IRS. IRC Section 3406(a)(1)(A) provides that reportable payments are subject to backup
withholding if the payee does not provide a correct TIN to the payer. The payer is required to withhold
28% of a reportable payment if the TIN is not provided at the time of the payment. IRS sends a CP2100
or CP2100A, “Notice of Possible Payee TIN Discrepancy”, to payers if the TIN/name combination on the
information return does not match IRS tax records. Once a payer receives a “Notice of Possible Payee
TIN Discrepancy”, for a payee, the payer is required to track whether or not another is received within 3
years. If another “Notice of Possible Payee TIN Discrepancy”, for that payee is received, the second notice
requires the payer to backup withhold on any proceeds disbursed to the payee until IRS gives permission
to stop, even if a Form W-9 is provided by a payee. Additional information regarding requirements to
provide a payee TIN and, backup withholding guidelines, may be found in IRS Publication 1281 “Backup
Withholding for Missing and Incorrect TINs – Including Instructions for Magnetic Tape and CD/DVD
Formats ”.
3. What is a Form W-9?
Form W-9, “Request for Taxpayer Identification Number and Certification”, certifies the payee’s name
and TIN, that the payee is not subject to backup withholding, and they are a U.S. person, including a U.S.
resident alien.
4. What is the penalty for a payer who furnishes an incorrect name/TIN to IRS?
IRC Section 6721 provides a payer may be subject to a penalty for failure to file a complete and accurate
information return, including a failure to include the correct payee TIN. The penalty is $50 per return,
with a maximum penalty of $250,000 per year ($100,000 for small businesses). The penalty for intentional
disregard is $100 per return, with no maximum penalty.
5. How does IRS differentiate between an ‘invalid’ and a ‘missing’ TIN?
A missing TIN is either completely missing, or contains invalid characters such as alphas or hyphens. An
invalid TIN is one that doesn’t match IRS records for that name/TIN combination. A TIN not currently
issued cannot be found in either IRS or SSA records.
6. Who will be able to use the TIN Matching Program and how will it help me to reduce errors on my payee
TINs?
Payers or their authorized agents, who submit Forms 1099-INT, DIV, PATR, OID, MISC and/or B* to
IRS may be eligible to enroll in the e-Services TIN Matching program. TIN Matching assists the payer in
determining if the payee TIN/name combination contained on their Form W-9, matches the TIN/name
combination contained in IRS tax filing records.
NOTE: The TIN Matching program currently cannot enroll payers who do not submit at least one of these
six forms, nor employers submitting Forms W-2, to use the TIN Matching system. Payers may only perform
TIN Matching for the TIN/Name combinations for income subject to backup withholding and reported on
Forms 1099-B, DIV, INT, MISC, OID and/or PATR.
7. What is an authorized agent?
An individual or company contracted to transmit information returns to the IRS on behalf of the payer
firm. This would include third party service providers, transmitters, service bureaus, etc. An authorized
agent must perform TIN Matching research under the account established by the payer firm through
eServices.
[How to sign up stuff remove to fit character limit.]
23. What should I do to secure an accurate TIN from my Payee?
It would be useful to refer to the Instructions for Form SS-4, lines 1 and 2, (http://www.irs.gov/pub/
irs-pdf/iss4.pdf) to determine what name may have been submitted to the IRS. Ultimately, the name
submitted for TIN Matching should be the legal name from line 1 or the trade name from line 2 if a
return using this name has already been filed and accepted. The legal name of the entity will create the
best potential to match because IRS maintains prior name controls for an EIN even after a name change
has been made.
