How can I send a 1099-Misc if a contractor won't provide an EIN or SSN?

Question

Acording to AICPA and this IRS Publication, as a landlord who paid for services for over $600 last year, I am supposed to be sending out 1099-MISC forms to the plumbers, handymen, electricians, etc.

However, I have had a devil of a time getting them to provide me any kind of taxpayer ID number. Now that I've already paid them for their services, I don't have a lot of leverage to go demanding information from them. It isn't so much that they refuse, they just don't respond to my inquiries for this information.

I'd hate to run afoul of the tax rules and be subject to fines.

So what can I do in this situation, is it acceptable to file the 1099-MISC with the Taxpayer ID box left blank?

Update:

I found this information on a site selling tax software (so I won't spam for them by providing the source here), but it seems to indicate sending a 1099 without a TIN is enough for the IRS to fine you. I'm not sure how to act in good faith here with an uncooperative maintenance person.

If you fail to file a correct 1099 information return by the due date and you cannot show reasonable cause, you may be subject to a penalty. The penalty applies if you fail to file timely, you fail to include all information required to be shown on a 1099 return, or you include incorrect information on a return. The 1099 penalty also applies if you file on paper when you were required to file 1099s electronically, you report an incorrect TIN (Tax Identification Number) or fail to report a TIN, or you fail to file paper 1099 forms that are machine readable. The amount of the 1099 deadline penalty is based on when you file the correct information return.

Answer 1

There's a regulation for that, however I suggest consulting with an experienced EA/CPA licensed in your State as to how to proceed.

There is no federal law which prevents a withholding agent from legally making a payment to a payee for the sole reason that the payee does not have a TIN. However, sections 6721, 6722, and 6723 of the Internal Revenue Code allow the IRS to impose penalties on withholding agents who fail to report payee TIN's on information returns and payee statements (Forms W-2, 1099, 1042-S, etc.) which report payments made to payees.

However, Treasury Regulations found at 301.6724-1 contain "reasonable cause" criteria which a withholding agent can use to establish acceptable reasons for not providing a payee TIN on an information return or a payee statement, and thus avoid the penalties which the IRS might otherwise impose on the withholding agent for not providing payee TIN's on information returns and payee statements.

My understanding is that you do send the form without the TIN, and document and keep all the communications where you requested the TIN from the payee. Next time, make sure to get the W9 before making the payment, so that you could have that leverage you don't have now. They're required to provide it to you.

Read the text carefully though, and as I said - better get a professional to guide you. There are several different situations described, and in some you need to file an affidavit of your efforts, in others you don't. See which one applies to you.

Answer 2

They are required by law to give you a W-9 when requested. The reason they refused is so that they don't want that income reported.

Just issue them the 1099 regardless and report them to the IRS for non compliance.

They should contribute and pay taxes like all of us. Being an LLC also does not exempt them from having to submit a W-9.