Tax ID Verification Service
Avoid filing 1099 Forms with TIN errors.
Updated December 15, 2022
It is a common mistake to report incorrect Tax ID or name when filing 1099 forms with the IRS. Sometimes it could be typos, and it could also be because the vendor provides their business name with their social security number (SSN), or vice versa. The IRS has recently increased its penalties for incorrect filing. To prevent the IRS penalties for inaccurate reporting and reduce the cost associated with issuing B-Notices and withholding federal tax payments, we highly recommend that you verify the accuracy of the recipient’s Tax ID, before filing 1099 forms.
With the TIN checking service, name and tax ids of the 1099 vendors are checked with the IRS records. TIN checking allows you to make sure you are filing your 1099 with the actual vendor name and tax id.
The IRS number of proposed penalty notices IRS sends increases every year. The IRS penalty for a mismatched Tax ID/name combination could be as high as $280.00 per mismatch. You can avoid this penalty by using our TIN Matching service. Our TIN Matching service allows you to verify the TIN and name before submitting the information to the IRS. Internal Revenue Code 6724 provides that any penalties under Section 6721 may be waived if the filer shows the failure to file a correct TIN on an information return was due to reasonable cause and not willful neglect. Filers may prove due diligence and receive a waiver from proposed penalties if they use the TIN matching program.
How does the TIN checking service work?
Our TIN checking service works seamlessly with our e-filing system. Just choose the option for TIN Matching when submitting your forms. If you have selected the TIN matching service, our system will automatically send out the TIN matching request before e-filing your forms. If the TIN match result detects a discrepancy, we inform you so that you can verify the information with your recipient and correct it. We resend your information to verify. If it is a match, we e-file your forms.
The IRS displays one of the following “Match Indicator” codes next to the TIN and name combination:
Is TIN Matching required when filing 1099?
TIN matching is not required, but we recommend it to make sure you are filing 1099 accurately. When you file 1099 with inaccurate TIN and name combination, the IRS issues CP2100 or CP2100A notices letting you know that you may be responsible for backup withholding. You are then required to send B-Notices to the payee and try to collect correct information on the W-9 form or start backup withholding.
Are you confused? You are not alone, filing wrong TIN information on 1099s could result in headaches. It is easier to use the TIN matching service and avoid all this extra work and problems. We at eFile360, always advise our clients to match TINs before filing 1099 forms.
What happens if the TIN does not match IRS records?
If you use our service to match TINs and the result comes out negative, meaning the TIN and name combination does not match the IRS records, you can contact the payee (recipients) to provide the correct information. You can then update the payee record, and our system automatically performs another TIN check. We continue this process (time permitting) until we have a match.
It is always a best practice to collect W-9 form your vendors before making any payments. The vendor is more likely to oblige before the payment, than once they have received the payment. Once you have their W-9, institute a process to use the TIN matching service to check TINs in advance. Waiting for the last moment to collect vendor information can add to your anxiety and increase chances of errors.
How does TIN checking work with eFile360?
When filing your 1099 forms with eFile360, we offer the TIN Checking service as an optional service. At the check out, you can add or remove this service. By checking the TIN Checkbox, you can avoid all the hassle associated with filing incorrect TIN and name information. There is a small cost, but it is worth it.
Please contact us to learn more about our 1099 TIN Matching service.
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TIN Match (Taxpayer Identification Number Matching) is a service where we match the taxpayer identification number (EIN or SSN) and name for 1099 vendors with the IRS records. It helps in identifying any potential errors in vendors' names or tax id before filing 1099 forms.
To verify TIN using our service, select the TIN match option at the time of check out. That is all you need to do. We then verify the TIN with the IRS and report any errors to you, allowing you to fix the mistakes before filing 1099 forms.
There could be many reasons for the TIN and not to not math. Most likely there is a typo in the name or TIN, the name of the person has changed. The vendor has used their name with their business tax id or vice versa. Sometimes the vendors use their DBA (Doing Business As) name instead of their legal entity name. The IRS only recognizes the legal entity name.
The TIN Match cost starts at $1.00 per TIN match request. The more forms you have, the better volume discount your get. Check out our TIN match pricing here.
TIN is the tax identification number of the vendor receiving the 1099 form. It could be the Employer Identification Number (EIN) or the Social Security Number (SSN) of the vendor.
The TIN verification process is used to verify vendors' tax ID. However, please note that you can only use the TIN matching service for the 1099 filing purposes. TIN matching is not allowed for any other purpose. Payers having reportable payments subject to the backup withholding provisions are allowed to verify tax ID.
If the SSN is wrong, you must file a correction form to fix the error. The IRS matches the name on the 1099 form with the tax ID (SSN or EIN), and if they don't match the IRS records, the form is flagged. Type 2 correction is needed to fix errors in SSNs. Check out the details to see more information on Type 2 corrections. You must file the correction with the IRS as well as provide a corrected copy to your recipient.
With our optional TIN Check Service, we can verify that the Taxpayer Identification Numbers (TIN) used in your forms are correct. We match the name and tax id combination of the vendor with IRS records. A TIN can be either a Social Security Number (SSN) or an Employer Identification Number (EIN).
It is a good practice to collect Tax Id from vendors on form W-9 before making any payments. A vendor is supposed to provide their TIN with businesses they work with. If the vendor is not registered as a business, their Social Security Number (SSN) is used.
The main difference between the TIN and EIN is that an EIN is used for identifying companies. In contrast, a TIN is used for identifying taxable individuals in the U.S. While both are used for reporting and identifying purposes, the difference lies in the scenarios in which a particular number can be used.
Not really. For the IRS, as long as the number is a valid nine-digit number, it is not important how it is formatted. EIN is formatted like XX-XXXXXXX whereas SSN is formatted as XXX-XX-XXXX. This difference in formatting is only useful when printing the TIN.
A tax identification number of the vendor is required filed on 1099 form. TIN is the only way the IRS determines the tax liability of the recipient of the 1099 form.
Yes, using our website eFile360.com, you can verify TINs online. When you submit your 1099 forms, you can select the option TIN check service, and we would verify TIN for your vendors.
The Taxpayer Identification Number (TIN) Matching Program is a free web-based tool offered by the IRS through e-services and was established for payers of reportable payments subject to the backup withholding provisions of section 3406 of the Internal Revenue Code.
It is possible to file 1099s without the payee's tax ID. You can use all 0s in place of tax ID. Generally, for missing or incorrect tax Ids reported on 1099, the IRS issues CP2100 notices instructing you to initiate a TIN request from your vendor. To comply, it is a good practice to collect TIN information form your vendors ahead of time.
"TIN" – means the taxpayer identification number that a payee is required to furnish to a payor. The TIN may be an Employer Identification Number (EIN), a Social Security Number (SSN), or an Internal Revenue Service Individual Taxpayer Identification Number (ITIN).
Some independent contractors (a type of sole proprietor) use an Employer Identification Number rather than their Social Security number to safeguard against identity theft. Sole proprietors sometimes use an EIN to show their status as independent contractors rather than employees.
As a payer, when you file 1099 with incorrect TIN (EIN or SSN), the IRS issues you CP2100 or CP2100A notice that tells you that you may be responsible for backup withholding. That means next time you make any payments to the vendor identified, you are required to withhold a certain percentage from the money you pay to the vendor and pay to the IRS.
If your payee refuses to provide you their TIN, you should begin backup withholding immediately on any reportable payments. You are required to request TIN from the vendor on an annual basis. You should backup withhold until you receive a TIN.
Suppose you have received a CP2100 or CP2100A notice from the IRS for incorrect or missing TIN on a 1099 form. You should send B Notice to your payee requesting their TIN information. If you have not started backup withholding, begin to do so immediately and continue until you receive a TIN.
A "B" Notice is a backup withholding notice that you send to your payee if they have not provided you their TIN. You must send the "B" Notice and a Form W-9 to your payee after receiving the CP2100 or CP2100A Notice for soliciting a correct Name/TIN combination.
You must file correction forms immediately to correct the TIN on the 1099 form. Check out our corrections filing process for 1099 forms.