A first year business owner (S corp) did not know to get a W-9 from an independent contractor he hired and paid over $600. After repeated attempts, he is unable to contact the contractor. He has no known address. He filed an extension for the 1099, but it appears that he will not be able to get the needed information to file a 1099. What should be his procedure from here?

ANSWER

The BIDaWIZ Team's Answer:

First and foremost, please make sure that the client doesn't pay another contractor without first receiving a completed W-9 Form. TIN matching via the IRS should also be considered.

In this case, please make sure the client maintains record of the attempted correspondences with the contractor. In the 1099 form, the client should write "refuse to provide" in the space for the taxpayer identification number (TIN).

Separately, going forward, please make sure the client withholds taxes from monies paid to this contractor.

References: IRS Publication 1220; IRC Section 6041
State: TN