What are the rules on collecting W-9's for those we donate to and/or are a charitable contribution?


Payments to tax-exempt organizations are not reportable. Nevertheless, it's a sound policy to request a W9 from any domestic entity ("U.S. person" and including resident aliens) to which you are making payments (there are other forms from nonresident alien and foreign payees).

The reason is so that you have documentation from the entity as to its status with regard to backup withholding. The IRS does not require anyone to gather W9s at all, but the W9 is the form that protects you in an IRS audit when questions arise as to taxpayer ID or status pertaining to reporting or withholding. Failure to do back up withholding or report 1099 payments for a vendor who qualifies can result in significant penalties to your organization. Several 1099 consultants have indicated that when "in doubt" report it. It does not harm an organization if they are not a reportable entity.

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