ID Verification for IRS Purposes Is Vital
Tax ID Numbers (TIN) require accurate reporting. An often-overlooked part of 1099 compliance is making sure you are reporting the correct Tax ID/Name combinations. To prevent the IRS from levying penalties for incorrect reporting and to reduce the costs associated with issuing B-Notices and withholding federal tax from 1099 payments, you should verify the accuracy of the 1099 SSN/EIN database.
Failure to correct a mismatched TIN can be exceptionally expensive if your organization is flagged for incorrect reporting. For example, failing to correct after 30 days of discovering the mistake can result in penalties of up to $565,000. In the case of errors that go uncorrected for more than 30 days, the maximum penalty is nearly $1.7 million before Aug. 1 and almost $3.4 million after Aug. 1. If the IRS determines that there was intentional disregard, there is no limit to the penalties that may be incurred.
Having experts assisting you with your filings is the best way to avoid these types of issues. Tab Services Company provides SSN validation services as part of our capabilities to ensure you won’t have to worry about possible mistakes. Our TIN verification service makes it easy to stay on the right side of compliance. Should you make any mistakes that become filed, however, our post-filing correction processing services make it easy for you to correct them.