FAQ
Find quick answers to the most common questions about IRS TIN Matching, vendor compliance, W-9 collection, OFAC screening, and 1099 reporting. This section is designed to help your team understand key requirements, avoid common mistakes, and stay compliant with IRS regulations.
IRS Name Control Rules Explained
IRS Name Control rules define how the IRS matches taxpayer names to EINs and SSNs, typically using the first four characters of a business name or the first four characters of an individual's last name. Name control mismatches are commonly caused by using DBA names, missing LLC/Inc. suffixes, formatting differences, and outdated vendor legal names.
What Happens If a Vendor Provides the Wrong SSN?
If a vendor or contractor provides the wrong SSN, the IRS may reject the name/SSN combination and later issue CP2100 mismatch notices, triggering B-Notice outreach requirements and potential backup withholding. If the incorrect SSN is used on a filed 1099, your organization may also face penalties and may need to file corrected returns.
What Happens If a Vendor Provides the Wrong EIN?
If a vendor provides the wrong EIN, your business may experience IRS TIN/name mismatches, CP2100 notices, B-Notice requirements, and possible backup withholding obligations. If the error is not caught before filing, it may also lead to corrected 1099 filings and penalty exposure such as IRS Notice 972CG.
Why Does the IRS Reject TIN/Name Combinations?
The IRS rejects TIN/name combinations when the taxpayer name and EIN/SSN/ITIN provided do not match IRS records, even if the TIN itself is valid. The most common causes include typos, missing business suffixes like LLC or Inc., vendors using DBA names instead of legal names, and incorrect taxpayer name formatting.
What is a TIN (Taxpayer Identification Number)?
A TIN (Taxpayer Identification Number) is a unique number used by the IRS to identify individuals and businesses for tax reporting and compliance purposes. Common TIN types include EINs, SSNs, and ITINs, and collecting accurate TIN data is essential for W-9 compliance and correct 1099 filing.
W-9 Reminder Email Template (Vendor Follow-Up Email)
If your organization collects W-9 forms by emailing a PDF attachment, reminder emails are essential to keep vendor onboarding and payment setup moving. The best reminders reattach the W-9 form every time and clearly instruct the vendor to complete, sign, and return the form by replying to the email.
What is a W-9 form and when is it required?
A W-9 form is an IRS document used to collect a U.S. vendor’s legal name, tax classification, and TIN (EIN or SSN) for proper tax reporting and 1099 filing. It is typically required during vendor onboarding before payments are issued to prevent IRS mismatches, B-Notices, and compliance penalties.
What is a B-Notice (First vs Second B-Notice)?
A B-Notice is an IRS-required letter businesses must send to vendors when the IRS reports a name/TIN mismatch after 1099 filing, typically triggered by CP2100 or CP2100A notices. A First B-Notice usually requires a corrected W-9, while a Second B-Notice requires stronger IRS or SSA-issued proof of the correct taxpayer ID.
EIN vs SSN vs ITIN Validation: What’s the Difference?
EINs, SSNs, and ITINs are all IRS taxpayer identification numbers, but they apply to different types of taxpayers—businesses, U.S. individuals, and non-U.S. individuals. Validating these identifiers requires confirming both the TIN format and that the legal name/TIN combination matches IRS records to prevent compliance issues and IRS notices.
OFAC screening requirements for vendors
OFAC screening is the process of checking vendors against U.S. sanctions lists to ensure your business is not paying or onboarding restricted parties. Best practice is to screen vendors at onboarding and rescreen periodically, especially for high-risk industries and high-value payments.