Why Aren t You Using the IRS TIN Matching System? Breakout Session #2295 Presented by: Sandy Champion Independent Jan Wallace Director of Accounts

Transcription

1 Why Aren t You Using the IRS TIN Matching System? Breakout Session #2295 Presented by: Sandy Champion Independent Jan Wallace Director of Accounts Payable - Freeman

2 05/12 2

3 Discussion will include: Benefits of using the TIN Matching Program Registra=on in the IRS Website Individual and Bulk TIN Matching Submissions Match Indicator Codes How to handle discrepancies Demonstra=on of the TIN Matching Program 05/12 3

4 Benefits No=fica=on of name/tin mismatch prior to 1099 filing Reduc=on or elimina=on of B- No=ces Penalty avoidance Cleaner vendor file Reduced fraud risk And it is FREE!! 05/12 4

5 RegistraHon IRS e- services Lengthy and takes over 2 weeks to register for each par=cipant Requires par=cipant s Social Security #, Adjusted Gross Income for previous tax year, and current home address 05/12 5

6 Eligible OrganizaHons Filers of 1099s, including B, INT, DIV, MISC, OID, PATR (forms that require backup withholding) Organiza=ons that filed Forms 1099 within the past two years Organiza=on s name/tin must also match and must have filed taxes under that combina=on during the prior year Cannot be an individual 05/12 6

7 The ApplicaHon Process Registra=on by a Principal of the organiza=on Receipt of a le`er from the IRS with confirma=on code Online Login and Confirma=on Applica=on for authorized users of the system 05/12 7

8 What is a Principal? The registered principal should be an officer of the company, a 5% owner, or someone who has the authority to legally bind the company. You should be able to obtain something in wri=ng or an from an officer, owner, or a person who signs the tax return sta=ng that you may be considered a principal for the purposes of using the IRS TIN Matching program. Explain the benefits of using the system to your management: Saving the company from the addi=onal work of processing B- no=ces and reducing the likelihood of associated penal=es. Management likes to save =me and money! 05/12 8

9 TIN Matching Process Interac=ve TIN Session You can submit up to 25 Name/TIN combina=ons to be matched against IRS records, and receive the results instantly in your browser. Print the Saved results screen for your records. Bulk TIN Session You can submit a.txt file containing up to 100,000 Name/TIN combina=ons, and receive a response within 24 hours. You will receive an no=fica=on that your response is wai=ng, and you will have 3 days to retrieve the results. 05/12 9

10 Analyzing the Results If the result is 0, 6, 7, or 8 you can breathe a huge sigh of relief, because you have a MATCH! 05/12 10

11 Analyzing the Results If the code is not 0, 6, 7, or 8, you smll have work to do: Check for typos in your submission Retrieve the Form W- 9 and make sure you are submikng the correct informa=on Contact the vendor, explain that the Name/TIN combina=on in your records does not match per the IRS, and request a new Form W- 9 05/12 11

12 Print the Screen The Interac=ve TIN Session page states: Filers may prove due diligence and receive a waiver from proposed penalmes if they prove the TIN and name combinamon they submired matched IRS records. Providing a copy of the Print Screen of your InteracMve Results will be considered proof of due diligence. 05/12 12

13 Don t Phish! WARNING, WARNING The TIN Matching Func=onality will be suspended for the next 96 hours due to a security viola=on. Specifically, you have exceeded the limit for submission of duplicate TIN s. DO NOT SUBMIT THE SAME TAX ID NUMBER MORE THAN TWICE IN ONE DAY. 05/12 13

14 Bulk TIN Matching Process Submit up to 100,000 records at one =me! File name must have no spaces ex: WIBulkFile.txt Strict file format - No punctua=on (periods, commas, dashes, colons, apostrophes, etc.) - No empty lines, including at end of file - 9- digit Tax ID number with no dashes - Forma`ed in.txt file - Use semi- colon between fields 05/12 14

15 Bulk TIN Matching Format 3; ;ABC COMPANY; = Unknown Tax Id Format = Federal Tax ID Number ABC COMPANY = Company Name = Vendor Number 2; ;JONATHON DOE; = Social Security Number Format = Social Security Number JONATHON DOE = Individual Name = Vendor Number 05/12 15

16 Bulk TIN Matching Process Submit file on- line through website Will validate file format immediately - If error, error message on what to correct appears (You must log out of the website and re- enter aqer making correc=ons to the file) - If okay, confirma=on is received Results obtained in less than 24 hours - Receive to go to IRS website Logon Go to Mailbox Read results Download file and work issues ex:3; ;abc COMPANY;543210;0 ex:2; ;jonathon DOE;765432;3 05/12 16

17 What to do with the IRS File Results Define a field in your vendor data base to designate that the tax informa=on has been verified with the IRS If the informa=on is valid, note YES and the informa=on will not have to be revalidated in the future If the informa=on is not valid, note NO in the vendor file and inac=vate the vendor Work all vendors with incorrect IRS informa=on by reques=ng a new W- 9 Verify the new W- 9 against the IRS website, make the correc=ons where necessary, change your NO to YES and reac=vate the vendor You can pull a report based on the YES/NO field to list the vendors that have to be worked 05/12 17

18 Demonstra=on 05/12 18

19 Ques=ons? 05/12 19

20 Sandy Champion - Independent schampion1@tx.rr.com Jan Wallace - Freeman jan.wallace@freemanco.com