Internal Revenue Service Form W-9 is used to obtain the taxpayer identification number for an individual or corporation. Companies use this form to obtain TINs for new vendors. After an initial IRS Form W-9 is obtained, companies are not required to obtain updated forms for established vendors; vendors are responsible for providing an updated Form W-9 if certain information changes.
A vendor is obligated to furnish a company with a new Form W-9 if the name or TIN for the vendor changes. In addition, if the business structure of the vendor changes its taxation requirements, a new Form W-9 should be provided.
The IRS requires companies to file a Form 1099 to report payments to certain vendors in excess of $600. Form W-9 ensures that the company will have enough information to make a Form 1099 filing, if necessary.
The IRS allows companies to use their own forms rather than Form W-9 if it requests substantially similar information. For example, a company may create its own vendor setup form and mail it to all new vendors. This form could include both vendor information specific to the company as well as the information contained on Form W-9.
Form W-9 solicits a vendor’s name, mailing address, taxation classification and Social Security number or employer identification number. Form W-9 or an equivalent substitute must also require the vendor to certify that the taxpayer identification number provided is accurate, that the vendor is a U.S. citizen, and that the vendor is not subject to backup withholding.
If a company requests a Form W-9 from a vendor, and the vendor fails to comply, the vendor may be subject to a penalty of $50 unless failure is due to a reasonable cause rather than willful negligence. A vendor may also incur civil and criminal penalties if false information is provided.
