Information On The W9 Form

The W9 Form is employed by organizations to file returns with the United States Internal Revenue Service on payments made to others.  Information such as the name, address, and the social security number (or other taxpayer identification number) is supplied,though the form itself is never truly sent to the Internal Revenue Service.  Instead, a Form W9 is kept by the business or whoever is responsible of filing returns.  It is maintained for affirmation requirements, for example in the case of an audit.  The information on the form, including the payment made, is generally reported on another, for example the Form 1096 or 1099.

There is an additional reason for the Tax Form W-9.  It is to help the person paid (technically called a “payee”) prevent something called “backup withholding.”  On an accurate scale of 1-10, if the payer acknowledges the primary ingredients involved in the tax stew then the “payor” is assured a 10, or to be more realistic a 9, from the scale particularly since no one is thrilled by giving money away but the outcomes do continue to be quite satisfactory. Maybe there is a way to get a perfect 10 if done illegally and swiftly but the reasonable outcome stays at a 9.

The payor (that is, “payer,” the one making the payment – namely, the employer) is legally compelled to acquire withholding taxes on certain kinds of income, payments that has to be reported to the Internal Revenue Service.  But the payee has the legal right to not have such taxes collected on his or her behalf, opting to do so him or herself when filing tax returns during tax season.  In such a circumstance, the payee must certify on the W-9 that the payee is not subject to backup withholding in order to receive the full amount, which action lets the payor off the hook, so to speak, with the Internal Revenue Service.

So, to recap: the IRS Form W-9 serves two general purposes, as suggested by its official name of “Request for Taxpayer Identification Number and Certification.”  First, it is used by employers to file what’s known as an information return with the United States Internal Revenue Service on their employees – namely, how much they were paid.  It is stored on file by the employer and not truly filed with the Internal Revenue Service, but subject to disclosure to that agency. 

Second, it can be utilized by the employee to certify his or her not being subject to backup withholding taxes.  The employee then takes personal responsibility for paying all the taxes owed at the end of the year, instead of having the employer subtract them automatically with every pay period.  Whatever the case, the W-9 is still the responsibility of the employer to sustain, to keep on file.