The IRS TIN Matching service is a valuable tool that every A/P manager should know about. This free-of-charge e-service allows ‘authorized payers’, defined by the IRS as one who has filed information returns with the IRS in at least one of the two past tax years, to match 1099 payee information against IRS records prior to filing information returns.
By integrating the TIN Matching program into your processes, you can reduce errors in validating TINs and decrease your backup withholding and penalty notices. In addition, it’s a control to aid in the prevention of fraudulent activity.
The IRS offers two methods to match: interactive TIN matching that will accept up to 25 TINs and Bulk TIN matching which accepts up to 100,000 TINs, submitted as a txt file, to be matched at one time.
The following link takes you to the IRS website and will get you started http://www.irs.gov/taxpros/article/0,,id=109646,00.html.
Backup Withholding for Missing and Incorrect Name/TIN(s)
Before you get started with the IRS TIN Matching service, you may wish to review publication 1281 from the IRS that covers Backup Withholding for Missing and Incorrect Name/TIN(s). It contains frequently asked questions on the topic, how to handle missing and incorrect name/TIN combinations (and even provides flowcharts for further clarification), explains the IRS matching process, and more.
Here is the latest publication http://www.irs.gov/pub/irs-pdf/p1281.pdf.
What do you think? I welcome your thoughts and feedback.