Tax Year Prior to 2020: Sub-contractor paid won't give social security number

[irrogical]

0's does not work any more.

[lisarnavarro]

0's do not work. You would think they would offer some help with this as it's surely a fairly common problem.

[busymommylist]

I just got the 000 to work but at first it didn't but only because i forgot to re enter the ssn lol

[busymommylist]

I mean, it is technically not Turbo Tax's responsibility lol. It is ours for not having the ssn. We have 1 driver who has been refusing to submit his number but he did work for a few months and then we had to let him go.

[Lizzy18]

What if they gave you one but it was the wrong one and the IRS sends you a letter letting you know, after you filed for 2018. You no longer have this sub contractor working for you and haven't since 2019 started so you can not withhold anything .. what are you to do following the letter from the IRS? How do you respond ? What are the steps that need to be taken?

[Carl]

If you submit a 1099-MISC without a valid SSN on it, then you the issuer will be fined by the IRS. I don't know how much. But they'll bill you for it.

I can understand why someone would not want to give you their SSN. You understand too. But maybe the contractor isn’t aware of just how fast and easy it is for them to get an EIN (Employer Identification Number)?  Make them aware that they can go online to http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-... and it will only take them about 10 minutes to get an EIN – which they can then provide to you as required by federal law.

Assuming you have already requested this information from your contractor, and they still refuse to provide it. here is the procedure that you must follow, in order to issue the 1099-MISC without the SSN or EIN.

First, understand that you can not e-file your 1099-MISC's without the SSN or EIN. You will have to print, sign and mail it to the IRS. There is no alternative or workaround for this.

Next, print out a form W-9 (Request for Taxpayer Identification Number and Certification) from the IRS website at http://www.irs.gov/pub/irs-pdf/fw9.pdf.

Fill out the W-9 form with all the information that you know.

Make 2 additional copies of the filled out W-9 for your own records.

Mail the form to the contractor via certified mail. Don’t lose your post office receipt.

The contractor has 10 calendar days to respond. If they respond with the information you need, then you’re good to go. If they have not responded, then on the 11^th day after you mailed it certified mail:

Select the “print and file” option for your 1099-MISC's forms. This will print only the documents required for filing, along with an instruction sheet that contains the address of the specific IRS processing center you will mail it to.

Include in your mailing a copy (not an original) of your proof of notification (the certified mail receipt you got at the post office), and a copy of the W-9 that you sent to the caregiver.

That’s it. While this will delay your refund (it’ll be 6-8 weeks before you get it), you’ll still get it. At this point, it’s no longer your problem – it’s the contractor's.

This action will also negate any penalties being assessed to you.

[Jbroo]

Why would a contractor want to apply for an EIN number and use that? If they don't end up paying taxes on the EIN number wont that link back to their ssn eventually anyways? 

[KarenM90]

Depending on the form of business the contractor is operating under, they may be required to have an EIN.  

Please see the attached link for reasons a contractor may be required to have an EIN:  Do I need an EIN?

[Jbroo]

If they were a sole prop and decided to use an EIN number and didnt pay taxes on those 1099's under that EIN, would it link back to their ssn number and they'd be subject to backup withholding, or would their business just get closed? 

[VictorW9]

Ideally, you should have gotten your subcontractor to fill out a W9. That would have given you the details of whether he is subject to backup withholding. However a company EIN, so long as it is valid, could be linked back to the responsible individual. 

[mikeinaustin62]

Carl, if you are mailing in a 1099-misc (or 1099-nec), don't you have to send in a 1096 with it?  Also, are you saying you only have to provide proof you mailed it and not that they signed for it?

[DMarkM1]

Yes,  mail in exactly what you have along with 1096.  Here are 1096 instructions in case you need.  

[mikeinaustin62]

assume you have sent the contractor a w9 request and did not get a response:

when you paper mail in your 1096 and 1099-misc to the irs along with proof of attempt, do you still send the subcontractor his copy of the 1099-misc?

[DMarkM1]

Absolutely and make a record of that as well to include in your IRS mailing.  

[Anna801]

What do I do If I have already paid the contractor and have no other wages to pay in order to take out backup withholding.

Can I take backup withholding from a cotractor's check before I get the notice from the IRS that the SS was not submitted with the Form1099?