Taxpayer asks:
I work for a small corporation. We routinely issue w9 forms whenever asked. However, a new customer asked me to send them a w9 form with our name and the address of our other manufacturing location. We have multiple manufacturing locations all covered under the same tax ID, name, etc. She wants her W9 to have another address; I am assuming because that is where she sends her purchase orders; however she pays her bills to this location.
Any thoughts?
Taxgirl says:
I try not to second guess what other taxpayers are doing. Most of the time, it’s better for my client if we don’t know what the “other guy” is doing. That’s not our worry.
With that said, it sounds like you can accommodate this new customer with no worries on your end. The name of the company and the EIN are the same – just the address is different. Interestingly, there’s not even a discussion of address on the actual form. If it’s a legitimate address where you conduct business (and you noted she sends POs there), I’d do it. I don’t see any down side. Does anyone else?
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
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Taxpayer asks:
Hi there. I work for a church that has musicians perform on a regular basis (at least once a month). We cut them a check each time they perform; nothing is run through payroll. Do they need to fill out a W-9? If yes, what do I need to do on my end? Appreciate any help you can offer.
Taxgirl says:
If you intend to treat the musicians (who I am assuming are not incorporated) as independent contractors, then you should have them fill out a form W-9. I don’t know the going rates for musicians these days (as a pretty sad trombone player and only a decent floutist, I can’t say) but I’m guessing that it is likely that you would pay out more than $600 in a taxable year. To ensure that you’re in compliance at the end of the year, I would issue a form W-9 to the musicians in advance of their performances. If you’ve already paid out some for 2009, just issue one now, no worries. It’s just easier to do it at the beginning in case there are compliance or backup withholding issues.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
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Taxpayer asks:
I have a Q. We run a large tow truck company. We tow for the Police, Sheriff, and Highway Patrol, as well as Federal Military Police. We also take private callers with disabled vehicles. We do our taxes every year with our CPA.
We received an emergency call in January. It was a construction company that their truck had been run off the road by a vehicle going the wrong way. We responded, as we usually do,and pulled this truck back on the highway….A recovery situation. Normally, we impound the vehicles until payment is made. However, this time, the vehicle was running OK, and the driver iof the recovered vehicle wanted to drive away. He gave us a PO from his established company. We trusted the large company.
Then, they refused to pay us the $300 for tow services unless we filled outa W-9. As a matter of principle, I refused to submit my SSN or Federal ID, as recommended by my CPA. It was like extortion. I threatened to turn them into collections,. Now the company has told me they reported me to the IRS for failure to fill out a W-9.
I am not an independent contractor. We do not contract with them. This is the one and only time they called us to respond to this emergency call. I already prepare my taxes every year with a CPA. What is going on here? Do I have to worry? When you go to the store to buy groceries, you don’t force the market to fill out a W-9? We are no different. We are an established business.
Thank you.
Taxgirl says:
Based on these facts, I’m guessing that the company does not have to file a form 1099 for money paid to your company. That would mean that they don’t need you to complete a form W-9.
I’m also guessing however, that this “big company” routinely issues forms W-9 as a matter of practice. This is because companies who fail to obtain a proper tax ID number when it’s actually required can be subject to a fine. So, as a matter of course, many of those companies issue a form W-9 to every vendor to cover themselves. Most of the time, I advise my clients to complete the form to avoid the agita. Rarely does anything come of it.
That said, I appreciate that you feel that you didn’t have to complete the form and that you should be paid for the work that you’ve done. If you insist on not completing the form W-9, I would ask your CPA (or attorney) to send a letter to the company asking why they believe it is necessary for you to complete one and note that in the absence of a valid reason, you expect to be paid promptly. My guess is that there is no valid reason. And in the absence of a valid reason, there’s no harm, no foul on the IRS side for not completing the form (the form itself doesn’t get sent to the IRS).
But one more word of advice: I highly recommend doing a quick cost analysis. The cost to you – in fees and time – to get paid for the time that you’ve already expended providing a service is probably more than the payments due you. In situations like this, as sucky as it is, I usually advise my clients to bite the bullet, fill out the form and call it a day. And maybe next time, let ‘em sit by the side of the road for a bit… 
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
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Taxpayer asks: In doing some side work, a client sent me a W-9 to fill out and return. Why would they do that, and why is this the first time I’ve received one from a client? Is my new client somehow reporting this income or putting it down as an expense, maybe?
Taxgirl says: Independent contractors don’t usually have anything withheld on their checks, like employees do. However, if you refuse to give your tax ID or if you are a foreign taxpayer (and certain other taxpayers), the person paying you is required to withhold taxes. So, basically the payer ask you to swear that you’re not one of those people by completing the form W-9 (or form W-8 for foreign taxpayers and other special circumstances). You’d know if you were subject to back-up withholding.
Think of it as a CYA thing for the companies. Companies who expect to pay out over $600 (and thus issue a form 1099) or big companies who have lots of payees find it easier for record keeping purposes to make everyone fill one out do it. It’s just for record keeping and to help them with reporting later in the year.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
Have a question? Ask the Taxgirl!
