Taxpayers to Provide Correct
Taxpayer Identification Numbers (TINs)

WASHINGTON - About 2 million taxpayers nationwide will soon be asked to provide correct taxpayer identification numbers (TINs) to those who pay them interest, dividends, rents, royalties, non-employee compensation and brokerage transactions.

Notices are being sent by financial institutions and other payers to make certain they have the taxpayers' correct identification numbers. The numbers are required on information returns payers file with IRS to report payments made to taxpayers, Social Security Numbers are individuals' taxpayer identification numbers -- businesses have employer identification numbers.

Taxpayers who receive notices must respond to the payer, not the IRS, within 30 days by providing their TIN and certifying it as correct. The notices taxpayers receive will include a TIN certification form to use. Payers will start withholding federal income tax at the rate of 20 percent from future payments if no response is made.

The notices provide guidance for those taxpayers who also will need to contact Social Security Administration, such as where the name on a social security card needs correction.

Once started, withholding will continue until the taxpayer provides the payer a certified TIN. Amounts withheld will be sent directly to IRS by payers and taxpayers will claim credit for the tax payments when filing their tax returns.

In September IRS provided listings of 5.6 million TINs to payers. These TINs were on information returns filed by payers that IRS could not match against TINs in its records. Payers sent IRS 500 million forms 1099 INT, DIV, MISC, OID, PAIR, and B to report the payments they made in 1989.

Payers are reviewing their records to see if the mismatches came from payer mistakes, such as transcribing TINs incorrectly onto information returns. Only those mismatches which payers cannot resolve by reviewing their records will result in notices to taxpayers.

Withholding tax from payments to those who do not provide correct TINs is required by the Interest and Dividend Compliance of 1983, enacted to improve tax compliance on income not normally subject to withholding. Correct TINs enable IRS to properly match information returns against filed tax returns to ensure income is property reported on tax returns.

Previous | Next

1990 IRS News Releases | News Releases Main | Home