New 1099 Rules and Backup withholding

[BulldogTom]

OK, this might be a little ridiculous but under the new 1099 rules, will backup withholding apply if you don't get a TIN from the vendor? Say I call PG&E because I do more than $600 with them and ask for their TIN. If they don't give it to me, do I withhold 28% of the bill and send it to the IRS?

If that is the case, then I might have some fun with the vendors that piss me off on a regular basis. Can you say "Backup withholding for AT&T"?

Just asking.

Tom

Lodi, CA

[Randall]

Yes and then they cut off your electric.

[jainen]

>>will backup withholding apply<<

I nominate Bulldog Tom for Post of the Week!

Let's start a protest movement with a goal of 100 million W-9's sent to the IRS.

[Jack from Ohio]

If we start right now requesting W-9s from all vendors for our businesses and personal payments, we could tick off enough big businesses that the uproar "MAY? " be heard in Congress? I am fashioning a letter already to send to all my payees! City, County, and State government agencies as well!

[BulldogTom]

At my day job, we are sending out a letter in October that states if you do not provide a W9, there will be no AP check. I anticipate a large number of collection calls in January and February.

On the lighter side - Back to backup withholding.

What happens if I go into my local Staples to get my supplies in January, and the total comes to over $600? Do I ask the clerk for a W9? What if she can't give me one? Do I write the check for 28% less and walk out with my supplies? I can't wait to try that one. Can you imagine the look on the clerk's face when you tell him/her that they can get the rest on their tax return?

This could be a lot of fun.

Tom

Lodi, cA

[jainen]

>>write the check for 28% less<<

But Your Honor, I DID renew my registration on time! DMV just wouldn't give me new tags because I withheld the required 28%.

[TAXBILLY]

At my day job, we are sending out a letter in October that states if you do not provide a W9, there will be no AP check. I anticipate a large number of collection calls in January and February.

On the lighter side - Back to backup withholding.

What happens if I go into my local Staples to get my supplies in January, and the total comes to over $600? Do I ask the clerk for a W9? What if she can't give me one? Do I write the check for 28% less and walk out with my supplies? I can't wait to try that one. Can you imagine the look on the clerk's face when you tell him/her that they can get the rest on their tax return?

This could be a lot of fun.

Tom

Lodi, cA

Kinda early to panic. The law goes into effect in 2012, not 2011.

taxbilly

[Randall]

Kinda early to panic. The law goes into effect in 2012, not 2011.

taxbilly

Yes, but it does point out some of the flaws. I do expect some changes but I don't know to what extent.

[BulldogTom]

Kinda early to panic. The law goes into effect in 2012, not 2011.

taxbilly

Yes, the requirement is to provide the 1099s in 2012 for payments made in 2011. Good luck trying to get a W9 at the end of 2011 after the payments are made. That is why we are requiring a W9 on file by Jan 1 of 2011. It is not panic, it is just preparation.

Tom

Lodi, CA

[TAXBILLY]

Yes, the requirement is to provide the 1099s in 2012 for payments made in 2011. Good luck trying to get a W9 at the end of 2011 after the payments are made. That is why we are requiring a W9 on file by Jan 1 of 2011. It is not panic, it is just preparation.

Tom

Lodi, CA

Not according to the IRS:

http://www.irs.gov/pub/irs-drop/n-10-51.pdf

taxbilly

[Randall]

Yes, the requirement is to provide the 1099s in 2012 for payments made in 2011. Good luck trying to get a W9 at the end of 2011 after the payments are made. That is why we are requiring a W9 on file by Jan 1 of 2011. It is not panic, it is just preparation.

Tom

Lodi, CA

I think the requirement is effective for payments made in 2012, reporting 1099s in Jan 2013. But I don't have an official citation. This was from a PPC source.

[michaelmars]

how about payments to the US Treasury [iRS]. we can all withhold 28% there too.

[jainen]

>>we can all withhold 28% there too<<

I'll be sure to tell my employer to withhold 28% of my withholding, and send it to the IRS with my withholding.