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Nancy, you are also "partially correct," and everyone should
"have an accountant that keeps them straight" -- and broke.
If you are a corporation, the Federal Tax Code requires that
you have all payee's Tax Identification Numbers (TINs) on file.
CFR Title 36, Sec. 31.3406(h)-1 (b) Definitions. defines it as
"Taxpayer identification number--(1) In general. Taxpayer
identification number means the identifying number assigned
to a person under section 6109 (relating to identifying numbers,
generally a nine-digit social security number for an individual
and a nine-digit employer identification number for a nonindividual,
e.g., a corporation, partnership, trust, or estate)."
Some company's routinely use the W-9 Form; however, it is
not required per CFR Title 36, Sec. 31.3406(h)-3 Certificates.
"(b) Prescribed form to furnish a noncertified taxpayer
identification number. With respect to accounts or other
relationships where the payee is not required to certify, under
penalties of perjury, that the taxpayer identification number
being furnished is correct, the payor or broker may obtain the
taxpayer identification number orally or may use Form W-9,
a substitute form, or any other document, but the payee is
not required to sign the form." This provision covers most
"corporation-to-corporation" relationships.
If a person or a "nonindividual" refuses to give you their SSN
or EIN, you are obligated by the Tax Code to initiate "backup
witholding," which we don't want to get into.
The TIN positively identifies the recipent of payments for the
IRS so that they can make sure the recepient has correctly
reported the payments. Most corporations will require you
to give them your Tax ID Number prior to issuing a purchase
order. I always include my Tax ID in any bid or proposal, so
that it isn't necessary for the client to send a formal request.
At 12:12 AM 4/23/1999 -0700, you wrote:
>
>Joe is partially correct. That's why I have an accountant that keeps me
>straight. I do what I do best and let him do what he does best!
>
>I would like to explain that when I used the term "1099-type relationship"
>(note the hyphen) I meant a relationship in which the payor (corp1) does not
>withhold income tax from the payee (corp2). It is corp2's responsibility to
>make sure the appropriate tax is withheld. Actually, if I remember
>correctly, it's a W-9 form that is used to establish a corp-to-corp
>relationship. Perhaps I should have said a W-9 relationship???
>
>Nancy
Joe Schrengohst
Contract Technical Writer
Cisco Systems
Network-to-Users BU
170 West Tasman Drive
San Jose, CA 95134
E-Mail: jschreng -at- cisco -dot- com
Cisco Phone: (408) 527-9844
Cisco Fax: (408) 527-1488
Home Phone: (775) 782-4129
Home Fax: (775) 782-5585
