I have a vendor that is pushing back, saying that we are not required to get a completed W-9 for services he provided since the charge is under $600 and he will not be doing business with us again.

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Q. (cont.) I have read the W-9 Purpose of Form; can you verify he is correct even though it is not best practice? if he is not correct can you point me in the direction to provide him documentation as to why we are required to get it?

A. The vendor is correct; he has no legal requirement to supply you with a W-9, and there is no law you can invoke to compel him to give you one (unless you were to receive a B-notice on him).

You want to have a vendor’s correct tax ID and tax classification, along with his address, and you want this before you pay, because if you end up paying $600 or more to the vendor (which you might not know at the outset) and do not have a tax ID number (TIN), then you are required to withhold 28 percent of the total payment. That withholding is the leverage you have to get the TIN from the vendor. (There is no requirement to collect a W-9 specifically unless/until a B-notice has been issued.)

You should document your efforts to obtain a W-9, along with information about how you obtained the information you do have.

In this case, since the payments you made to him are under $600, it is not reportable and no backup withholding is necessary.

      

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