CP 2100-A Incorrect contractor name/TIN

Technical topics regarding tax preparation.
#1
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Client received an IRS CP 2100-A which states the name/TIN (tax ID number) of a few contractors reported on Form 1099 are incorrect.

Client has W-9 of each of these contractors on file.

The notice says no response is needed, but asks the client to just take steps to make sure the name/TIN in future filings will be correct. It also states the possibility of the need to do backup withholding on these contractors.

Questions:

(1) is there a standard procedure that client needs to follow now? Does he have the right or is it legal for him to ask for the social security card of these contractors to confirm the information?

(2) The timing when backup withholding should start started in the notice is vague. So at what point should client start doing backup withholding on these contractors?

(3) is there anything that he needs to do if these contractors do not provide service for him anymore?

Thank you.
 

#2
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1. Ask each of those contractors to fill out a new Form W-9, and get it right this time. (Note: I find that sometimes the problem is that the name on the 1099 is a business name, like an LLC, but the TIN belongs to an individual, thus creating a mismatch. So you may have to coach them through it.)

2. After the IRS sends another notice next year when there's still a mismatch. That notice will order you to start backup withholding on the contractors that still won't provide the correct info.

3. No.
 

#3
Joan TB  
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Also double check when the TIN is handwritten. Some people have HORRIBLE handwriting! Nines can look like fours, numbers can be transposed, etc. Call and have them confirm verbally so you can be sure what they wrote, if you need to. Then also double-check with the 1099s you prepared for those same kinds of glitches.

If you find an amended 1099 is needed, then get those done. Otherwise, not much else to do until the "2nd strike".
 

#4
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That is a good point.

Also, sometimes the IRS incorrectly processes 1099's that are perfectly legible. Like maybe they'll pick up on just the first letter of the first name & last name - and then it's no wonder why the last name they processed (only 1 letter long) doesn't match the name control (first 4 letters of last name).
 

#5
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Is it legal for the client to ask for social security card from his contractors?
 

#6
HowardS  
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Retired, no salvage value.
 


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