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I Have an Independent Contractor Who Refuses To Provide A Form W-9, What Do I Do?

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I Have an Independent Contractor Who Refuses To Provide A Form W-9, What Do I Do?

Who is a "U.S. person?"

The term "U.S. persons" doesn't just refer to "people." In legal terms, a U.S. person can, of course, be an individual, as long as he is a U.S. citizen or legal resident. It could also be a corporation, an association or company, or an estate or trust organized under the laws of the United States. Foreign estates are not "U.S. persons."

When do I use a Form W-9?

Use Form W-9 to collect the taxpayer ID number or Social Security number of any U.S. person you plan to engage in a business activity. Use a Form W-8 for foreign entities or individuals, or Form W-7 for individuals who become U.S. residents for tax purposes but who aren't eligible for a Social Security number.

What is included on a Form W-9?

Form W-9 asks for the taxpayers' name, business name and taxpayer ID number, which is either the taxpayer's Social Security number or Employer Identification number. The signer, or "payee," must sign the form certifying  the information is correct, and  the signer is either a U.S. citizen, resident alien, or the representative of a company, corporation, partnership or other U.S. person.

What happens if a W-9 is not filled out?

If you don't fill out a W-9  requested by an employer, partner or other entity duly entitled to your taxpayer ID information, you may be penalized $50 for each instance. You may also be subject to backup withholding, which means the payer will withhold 28 percent of your check and forward the proceeds to the IRS. If you file a false statement that results in no backup withholding, and you are not exempt from the backup withholding requirement, you may be subject to a $500 penalty per incident. If you falsify information, you may be prosecuted for criminal behavior, and even imprisoned.

If you receive a W-9 from a worker or vendor, and you misuse that confidential information or disclose it improperly, you may be subject to criminal and civil penalties.

In other words, if you’re asked to complete a W-9 form by someone you’re doing work for, it’s best to do it promptly and accurately.

What Should You Do If an Independent Contractor is Refusing To Provide Their Social Security Numbers/EIN or Complete the Form W-9?

We always recommended clients get a W-9 completed and signed prior to any payments.  

If the payment has been made and the Independent Contractor is refusing to complete the Form W-9, take the following steps:

  • Attempt to contact the Independent Contractor by phone and inform them  they are required to provide the ID number or be subject to a $50 penalty for failure to furnish a TIN.  Inform the Independent  Contractor  it is your policy to file the Form 1099 with “refused” listed in the field for the EIN and SSN.
  • If no response, mail the partially completed Form W-9 with a return receipt requested.
  • If still no response, mail the Independent Contractor the Form 1099-MISC with "refused" for the EIN or SSN tax ID number.
  • If still no response, file Forms 1099-MISC with IRS .with "refused" for the EIN or SSN tax ID number.


Understand that any future payment would require a backup withholding at a rate of 28% .

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