Are you having tenants fill out a W-9 Form?

[Enrique Jevons]

I just heard about a property management company having their tenants fill out a W-9 Form when they lease them up.  This is for the purpose of reporting to the IRS any security deposit refunds of more than $600.

I'll check with my CPA on Monday to see what she says, but it doesn't seem logical to me to report a payment of over $600 to a tenant if that money was simply a refund of their own money.  It's not as if that money is income that should be taxable?  Am I missing something?  How many folks out there are also having tenants fill out IRS W-9 Forms?