I have a tenant in a residential rental property who wants to pay rent through their company. They are asking for my SSN because they say their CPA needs it. Should this raise any red flags?
I disagree with the other respondents.
If your tenant is an individual, renting in their individual capacity, there is no reason they need your SSN. They will not be sending a 1099 to you.
If your tenant is a business, then your property is not a residential property. It is at least a "corporate housing", and you would have noticed that the contract was signed by a company representative in the capacity of being a company representative, not an individual person. In that case, that representative would also ask you to fill a form W9, on which your tax ID should be reported.
I would suggest let the tenant figure out their tax avoidance issues without you being involved.
The company that's apparently going to pay this rent wants to treat it as a business expense. They are asking for your SSN because they expect to issue a 1099-MISC. (They probably gave you a Form W-9? It's not mandatory but it's common to request a taxpayer ID on this form.)
There are a couple of issues at play here:
- Rents paid by a business are generally reportable on Form 1099-MISC. In that sense, the request appears to at least not be a scam. https://www.irs.gov/pub/irs-pdf/i1099msc.pdf It's definitely conceivable in this case that the renter is at least attempting to follow the law, even if, as in the following bullets, they are misguided in their approach.
- You are effectively running a business as a landlord. In that respect, you should expect that you'll encounter other situations that require you to give up a tax payer ID for essentially the same reason. You might be able to get a tax-payer identification number (TIN), as noted in the answer by JohnFx, that differs from your SSN. I would investigate this, but there are limits on who can get a separate number. (EDIT: As noted by @littleadv in the comments, this bullet assumes that renting is a primary business for you. If you're a "small landlord" then this part does not apply. See, for example, http://www.forbes.com/sites/irswatch/2013/03/06/should-landlords-be-filing-1099s-for-service-providers/#6d6f76245872 and http://www.auburnmainecpa.com/1099s-required-small-landlords/ for more information.)
- It's not completely clear that the arrangement between employee and employer is completely legitimate here, although I'm not sure that's your problem. It would seem more common for the employer to provide a housing allowance to the employee, in which case you're out of that part of the deal and would not need to provide any TIN.
- You have no contract with the tenant's employer, so I don't see how they can argue that you're obligated to give them a TIN. (If you had leased directly to the tenant's employer, probably you would be obliged, but then the "tenant" would be the company not the person.)
Maybe you should consider setting up a Taxpayer Identification Number (TIN) for your business dealings as a landlord and consider providing that instead of your SSN for this type of thing. I am assuming (if this is legitimate) they want it so they can send you a 1099 as they might be obligated to do if they are claiming the rent as a business expense.
Also, I'd suggest having the tenant tell their employer to contact you directly. There is no need for the tenant in this situation to also get your SSN/TIN.