1099 contractor won&#x27;t complete W9 form

Account Closed

Contractor · Raleigh, NC · Member since 2014 · 651 posts · 510 votes

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@Mark Gagner I would inform him that he is required by law to provide you with that information and that you will be including the transaction, with his name, in your tax return anyway. He will be in trouble with the IRS. I would also try to document the request and his refusal.

I've had to deal with this before too and learned: No completed W-9; No payment. :)

Bill Gulley

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

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Had an electrician that did that, he did the work and paid him as a third party where the owner cleared the payment.

When we asked he refused.

Told him that we would send a 1099 in with his name and business name and date of his corporate filing with an annotation that the tax payer refused to complete the form or give SSN.

Then told him, to prepare for an audit. He came in and filled it out.

Now, I have no idea what the IRS would do or say about submitting such a 1099, but it doesn't really matter, he thought I'd send it in and that was enough motivation for him to act, that's all I cared about.

After that we began requiring 1099s names and SSN of anyone stepping foot on a construction site before any disbursement as owners were not aware. Everyone learns.

Another ploy, file a small claims suit for the tax loss, when he receives the notice to appear he will probably change his tune, be sure to include costs of filing to settle. :)

4 Reply

Rob Gillespie

Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes

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Hey Mark, I have been in that same situation before and I've learned to never give him any money until they fill out the W9. With that said I know it is water over the dam now but the one thing I could suggest is to have another job for him to start, and have him start doing the work on it, and when he asks for money…… And have a W9 and say as soon as you fill this out I will give you money. I know it seems a little underhanded, but you were only playing the game by the rules that he is making, LOL. Good luck man!

1 Reply

Andrew S.

Investor · Raleigh, NC · Member since 2013 · 1k+ posts · 708 votes

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I'm interested in this topic too because I've almost been caught up in it too. Sometimes it's not obvious at the outset that you even need to get a W9. Example, I hired a guy to clean some gutters for me. Cost 100 bucks, so clearly, did't need to bother with a 1099. Had hime come back a few more times, and eventually, right before the end of the year exceeded $600, so now I needed the W9. Fortunately, after some prodding, he complied, but I can appreciate how one can get into this sort of jam.

@Steven Hamilton II , do you have any words of wisdom on the original question. Just file 1099misc anyway and take some heat from IRS (as suggested by Steve B?)? Leave SS or TIN info blank?

OP

Residential Real Estate Broker · Campbell, CA · Member since 2013 · 38 posts · 29 votes

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Originally posted by @Steve Babiak:

Send him a 1099-MISC. The IRS will be a little unhappy and send you a letter to the effect to not do that again. Since you are now more savvy, you probably won't repeat that.

Steve, if I don't have his social security number and he doesn't have a filed business name, can I still send a 1099-MISC?

Steve Babiak

Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes

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Originally posted by @Wayne Brooks:

You'll still need his SS no.

The missing SSN or Tax ID is what makes the IRS unhappy ;)

Mark Cruse

Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes

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A lot of people hire illegal immigrants to do massive amounts of work. I know damn well they wont sign that so how do they get around this? This is interesting because I will be putting together a crew soon.

Wayne Brooks

Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes

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They're paying cash, and not being able to deduct the payments. Or they're deducting them, then waiting for a really big hammer to drop upon an audit. (seen it drop)

1 Reply

Andrew S.

Investor · Raleigh, NC · Member since 2013 · 1k+ posts · 708 votes

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Originally posted by @Steve Babiak:

Originally posted by @Wayne Brooks:

You'll still need his SS no.

The missing SSN or Tax ID is what makes the IRS unhappy ;)

OK, unhappy, but in the end, what is preferable - filing an incomplete 1099misc, or filing no 1099misc? I mean that as a serious question, no sarcasm

Steve Babiak

Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes

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If the IRS wants to, they can look up a Tax ID or SSN for anybody (and a lot more easily than you and I could). If it is an uncommon name, even easier for them. So better to file the incomplete one IMO.

[email protected]224-381-2660

Steven Hamilton IIPro Member

Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes

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Originally posted by @Mark Gagner:

Hi BP,

In 2014 I hired a recommended contractor to do a quick job for me at the end of a project, but later learned that he was unlicensed (yes, I know I should have known that upfront AND got a W9 filled out before work started). After he did the work, I flipped the house, so the full amount of the work should be a write-off to my company. I won't bore anybody with more details on how I let this happen to me, just to say that I find myself in a predicament now. I need to send him a W9 form to fill out, but the gentleman who recommended him tells me he probably won't fill it out because he only does work "under the table". At the time he completed work, I wrote him a $2300 check to his personal name (evidently he doesn't actually have a business). I would like to know what (if any) recourse I have against this guy. In my tax bracket, it represents over $800 loss if I can't write off the expense. Of course, I don't want to spend $1000's in legal expenses to go after him....so can I just send him a 1099, even though I don't have a signed W9 from him? What are my options if he won't respond to my request to complete the W9 form? Thank you!

Write out the 1099 and put refused for his SSN.

5 Reply

BeBe Cheng

Investor · San Jose, CA · Member since 2014 · 65 posts · 52 votes

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@Steven Hamilton II Thank you!

@Steve Babiak @Steven Hamilton II

OP

Residential Real Estate Broker · Campbell, CA · Member since 2013 · 38 posts · 29 votes

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Thank you guys for your good advice. My CPA has also verified to send 1099 without SSN.

Mark

Anthony Giannette

Residential Real Estate Broker · Renton, WA · Member since 2014 · 87 posts · 33 votes

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The 1099 is really a great tool for your business. Not only does it bring all those working with you into the straight and narrow, but it also gives you strongly documented expenses. It's pretty difficult to refuse your deductions when most of them are supported with information reporting under this annual process.

Mark Gruetzmacher

Investor · Box Elder, SD · Member since 2014 · 228 posts · 43 votes

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I just read this thread and had a question. When is a 1099 required? I know over the $600 limit but it is for any person or business you pay more than that to? What about businesses that you have do things like a carpet store for example. Is there a list or set of examples of when it is required? Is it only for tax deduction purposes? If I company shingles my personal house do I have to request the info as well?

Sorry for the basic dumb question but it is something I am not familiar with.

Thank You.

1 Reply

OP

Residential Real Estate Broker · Campbell, CA · Member since 2013 · 38 posts · 29 votes

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Mark,

As I understand, a 1099 is required of any individual (not a company) that you pay over $600 for their services. It is required by the IRS for income tax purposes. If you pay a "roofing co" to replace your roof, there is no 1099 required because it is a company.

Paul Wurster

Investor · San Antonio, TX · Member since 2014 · 129 posts · 79 votes

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Of course this doesn't matter unless you get audited, but what if you thought you were paying a company (official receipts with business name) and later found out they were not. Or never found out. What is it that causes the hammer to drop?

OP

Residential Real Estate Broker · Campbell, CA · Member since 2013 · 38 posts · 29 votes

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Paul,

When the contractor completes the W9 form they are required to put either their social security number (individual) or Fed tax ID (company) on it. It is up to the contractor to fill this out accurately. If they don't, you will get a notice from the IRS saying the information provided was inaccurate. Then, it is up to your contractor to either prove or correct the accuracy of the info. I received such a notice when one of my contractor's names did not exactly match what was on their social security records. I believe I ended up leaving that to the contractor to correct (per the IRS notice). Either way, I do not believe you are responsible directly for the accuracy of how the W9 is completed.

Mark

Joseph Palladino

New York City, NY · Member since 2016 · 2 posts · 0 votes

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Hello all.

so just to help quickly understand, if the client or supplier i ship a 1099Misc to and he never gave the S/S#. will he still pay taxes once he receives the 1099 ? (without his SS#)

thanks

Joseph Palladino

New York City, NY · Member since 2016 · 2 posts · 0 votes

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i know he is required to file but without his SS # am i doomed?

John Farr

Member since 2018 · 1 post · 0 votes

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Just to clarify, a Form 1099 is only not required for a business that is a corporation. For example, if you hire a roofing company that is doing business as a Single Member LLC or Partnership you still have an obligation to issue a Form 1099. The "corporation" exception only applies to C and S corporations. Question 3 on Form W-9 requires the service provider to indicate their federal tax classification so you can determine if they are exempt.

Elizabeth R.

Ridgewood, NY · Member since 2017 · 16 posts · 3 votes

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@Mark Gagner i know its important to obtain a W9 and SS# can you take it a step further and request ID and proof of address? Because a dishonest person can put bogus information.

Eamonn McElroy

Accountant · Atlanta, GA · Member since 2015 · 1k+ posts · 1k+ votes

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@Elizabeth R.

You can request anything you want. That doesn't mean they're obligated to give it to you.

Your due diligence and record keeping is done by requesting and obtaining a signed W-9 from the contractor.

They're signing the W-9 under penalty of perjury...