Financial institutions are often interested in how to request the information which is necessary for the IRS contractor payment report. To get essential data from vendors, a W-9 is to be used. Normally, such records are sent by letter.
Kinds of Vendors
There are several variations of such collaborators. The following table shows which details they have to provide depending on the kind of entity they represent.
|Type||Name||Legal Name||Address||Legal Address||TIN||SNN||Signature|
|Individual/single member LLC/ sole proprietor
|+||+ (if applicable)||+||+ (if applicable)||+||+|
All in all, the requesting form requires to disclose whether the party is set up to do business as an individual or some other type of entity.
Tax Guide: Do I Need W-9 from all Vendors to Whom I Pay?
Each party should be interested in how to get and fill out a document before the settlement is rendered to avoid any withholding issues. A payee may refuse to complete the records. But in this case, the company will have to deduct taxes from its payment at a rate of 24%.
By putting one’s name to a document, the following is certified:
- The correctness of TIN/ SNN.
- No backup withholding procedure has been started against him.
- His U.S. citizenship or resident status.
- Exemption from Foreign Account Tax Compliance Act reporting – or, the validity of the entered FATCA codes.
Collaborators from foreign countries must complete other kinds of papers. For example, Canadian vendors must fill out W-8 Series forms.