Taxpayer Indentification Number

Definition of TIN.

TIN is a Taxpayer Identification Number.

Types of TIN.

They are many types of TINs: Social Security Number (SSA), Employer Identification Number (EIN), Individual Taxpayer Identification Number (ITIN), Adoption Taxpayer Identification Number (ATIN), and Preparer Identification Number (PTIN).

Self-employee:

If you are self employee, you probably are using a SSA, EIN, TIN, and or a PTIN; depending on many factors such as type of work and entity.  You must provide the correct TIN number to the vendor you provide services to so that he or she can prepare/submit the necessary forms to you and the IRS at year end.

Employers:

All employers are required to obtain the correct TIN from vendors they get service from to be in compliance with the IRS regs and applicable IRC law.  Failure to do obtain the correct TIN and do the due deligence documentation required can make you subject to penalties.  In the event you do everything possible to obtain accurate information you are required make all payments to the payee subject to backup withholding. In some cases is 28% and others 30% of the amount paid. 

Payments that can be subject to backup withholding include: interest, dividends, rents, royalties, non-employee compensation, broker and bartering exchange transactions.

Due Diligence from Employers: (some of notice are below)

1-Ascertain that the TIN provided is correct

2-Update information from provider

3-Solicit and proerly document all efforts to obtain correct information

4-Make all efforts by the due date

5-Have Policies and Procedures

Failure to know the IRS regulations and keep documentation cannot relief you from being penalized by the IRS.

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