In this article, we shall make it clear what a business or client can undertake in case the vendor, or the contractor rejects to provide the necessary taxpayer identification number for filling out the W-9 form. But before that, it’s crucial to make it clear what penalties one can expect for either missing or falsifying the TIN in a fillable W-9.
Possible Penalties for Misinformation
If the contractor chose not to or perhaps forgot to state his/her taxpayer identification number in the requested W-9 form, a penalty worth $50 is to be expected. Additionally, making false statements in the form may result in a significant penalty – $500. This may, as well, lead to prosecution for a criminal behavior. As a result, in this case, the contractor may even be sued and imprisoned.
Setting Backup Withholding
So, after getting W-9 forms to print, contractors should be utmost attentive not to disclose or misuse any information requested to bypass as criminal so civil penalties.
Anyway, if you still, as a client can’t make your contractor state his TIN for the printable W-9 form, it will be wiser to start backup withholding on his/her payments. This way, IRS will send the notice about the missing data and the backup withholding directly to the contractor and not the business owner. The contractor will be obliged to send the identification number to avoid further withholding.