6109 Penalty

What is a 6109 penalty (your subject line, I'm too lazy to look it up).

Except for attorneys, there is no penalty for not providing a W-9, unless you consider backup withholding a penalty.

From 1099-MISC instructions:

"If the attorney fails to provide its TIN, the attorney may be subject to a penalty under section

6723 and its regulations, and you must backup withhold on the reportable payments."

Otherwise, "If the recipient does not provide a TIN, leave the box for the recipient?s TIN blank on the Form 1097, 1098, 1099,

3921, 3922, 5498, or W-2G. [...]. Backup withholding may apply; see part N." [general instructions for Forms 1098, 1099, etc]

On 2012/05/25 17:14, Mark Bole wrote: .

OK, I got bored and tried to find code or regulations that would add some clarity on this, silly me.

I could not find anything that would make an attorney a special case when it comes to W-9 forms and payees. Yet the instructions seem to imply that attorney is a special case.

I also found instructions for W-9 that said there is indeed a $50 penalty for anyone who fails to provide TIN. This does not seem to be routinely applied, at least not historically.

So to answer the OP, I don't think it's a matter of anyone "imposing a penalty amount back on their supplier", but rather of the IRS imposing a penalty on anyone who refuses to fill out and sign a W-9 when required to do so.

The issuer of the 1099-MISC is also subject to penalty for missing info, but the penalty can be waived for reasonable cause including that the payee did not provide the TIN after being solicited properly to do so. So, there would not normally be a penalty in the first place to impose back on the supplier.

I take the Code to impose a penalty on the issuer for failure to obtain the TIN and other info. The IRS has not, in my 20+ years, seen the IRS go after the vendor.

They seem to want to bill their vendor, whom they pay or paid, if there is a penalty levied to them. Can they do that? Legal question I know, but....

Has anyone else seen the client bill their vendor for IRS penalties imposed on a 1099 issue?

As our moderator likes to say, "not bound by precedence".

There is a penalty on the issuer for failure to obtain TIN, but there is a waiver for reasonable cause, which includes the situation where the recipient does not provide a TIN after being requested.

The regs also contain a penalty for failure to provide a TIN requested via W-9, from what I see. Just because the IRS doesn't enforce it doesn't mean it isn't law. Same thing with providing spouse's SSN on a MFS return -- there is a $50 penalty for not doing so, but does the IRS enforce it?

Read it again. Where did they say they were going to bill their vendor? All they said was, "you may be subject to a $50 penalty imposed by the IRS under 6273". What is untrue about that statement?

No. The relevant question is, has anyone seen the IRS impose penalties on 1099 issuer where there is reasonable cause for not providing the recipient TIN? Also, has anyone seen the IRS impose penalties on a 1099 recipient for not providing a TIN via W-9 request?