4 ms·

In the U.S. at least, you are still legally required to report the legal identity of any contractor to the IRS and must ask them to fill out an I-9 form: https:

In the U.S. at least, you are still legally required to report the legal identity of any contractor to the IRS and must ask them to fill out an I-9 form: https://www.uscis.gov/i-9-central/complete-and-correct-form-i-9 https://www.uscis.gov/i-9-central/complete-and-correct-form-... Any contractor making >= $600 have to fill the payment and they receive a 1099. There are very few exceptions to that and they are listed in the article.

varsketiz 4y ago
Thats interesting. I have contracted with multiple entities in the US for many years and they never asked for anything like that.
- jimmygrapes 4y ago
  I think what they meant to say is the legal entity, rather than identity; a LLC or other business formation should suffice for most reporting requirements. There may be some exceptions in some areas, but I've contracted with with thousands of entities and never once had to verify the identity of their employees unless it was for individual access (passes/badges, etc.).
  - whynotkeithberg 4y ago
    So basically any real job?
- shrubble 4y ago
  If you are located outside of the USA then they are not required to gather this info. However if they believe you are a USA citizen or reside in the USA while doing the work, then they are supposed to.
mgkimsal 4y ago
(not from the article) but from a quick google search... "businesses that contract with S Corps do not need to issue them a Form 1099-MISC" I'm an s-corp, and yet I still have people 1099ing me. It's more annoying than anything because I get all my tax stuff done quickly, and someone will send out a late 1099 with slightly different numbers (typically error on their end) and... I've just given up caring about that. "You don't send 1099s to your landscaping service, or your office supply store purchases, or the energy company, but you've contracted services with them." "Oh, but you're a person"... with an s-corp registered for 10+ years and a separate employer TIN.
morpheuskafka 4y ago
You are required to solicit the taxpayer identification of anyone for whom you are required to file a 1099-NEC form--this is normally done on Form W-9. If the contractor fails to furnish a TIN, you are not required to cease business with them, however you will likely have to respond to the IRS and show that they refused to tell you when you file the 1099s each year. The IRS can assess a $50 civil penalty against the contractor (doubt they bother due to low amount set in statute), but more importantly the employer must withhold 30% backup withholding due to the failure to provide TIN. The employer will have to report the income and withholding on their tax return, which will likely be held up while the IRS verifies the match. I-9/E-Verify is for employees of your entity only and is not completed for independent contractors, nor for temp/contract labor who is employed by a different company (they do the form).
- pc86 4y ago
  Half of what you said supports the comment you're replying to, and half of it is irrelevant.
  - morpheuskafka 4y ago
    The part about I-9 compliance directly contradicts the parent comment which stated, "any contractor . . . and must ask them to fill out an I-9 form." The part about the 1099 reporting does agree with the parent comment, however, added some additional context about what happens if the contractor refuses and what exactly the business's responsibility is, which I thought was relevant to this discussion.
Canada 4y ago
How ridiculous is this? Do you really have a right to free association if you have to file a report if you pay someone $600 to do something for you?
- hn_throwaway_99 4y ago
  > Do you really have a right to free association if you have to file a report if you pay someone $600 to do something for you? Yes, you do.
  - Canada 4y ago
    How much is that worth if you aren't legally allowed to give anyone any money?
    - klyrs 4y ago
      No rights are absolute, they all have limitations when they impede on other rights. A history of unfair labor practices has established a precedent of limitations on "free association." Even the right to life has limitations in the US, if a judge finds you sufficiently heinous.
      - Canada 4y ago
        I'm not trying to advocate for some absolute freedom of action here. I'm saying it is, in my view, unreasonable that anyone who pays someone else a grand to do something suddenly has an obligation to report that to the government. To me, it seems excessive, and incompatible with the principles of a generally free society. I'm not convinced that any history of unfair labor practice justifies such reporting obligations, which imply some obligation to refuse to accept payment in exchange for performing some perfectly legal work. It seems to be that the purpose of this requirement is the convenience of enforcement of tax compliance and nothing more.
        chipotle_coyote 4y ago
SiberianDweller 4y ago
"Oh say, can you see ... Land of the free"

varsketiz 4y ago

Thats interesting. I have contracted with multiple entities in the US for many years and they never asked for anything like that.

jimmygrapes 4y ago
I think what they meant to say is the legal entity, rather than identity; a LLC or other business formation should suffice for most reporting requirements. There may be some exceptions in some areas, but I've contracted with with thousands of entities and never once had to verify the identity of their employees unless it was for individual access (passes/badges, etc.).
- whynotkeithberg 4y ago
  So basically any real job?
shrubble 4y ago
If you are located outside of the USA then they are not required to gather this info. However if they believe you are a USA citizen or reside in the USA while doing the work, then they are supposed to.

mgkimsal 4y ago

(not from the article) but from a quick google search... "businesses that contract with S Corps do not need to issue them a Form 1099-MISC" I'm an s-corp, and yet I still have people 1099ing me. It's more annoying than anything because I get all my tax stuff done quickly, and someone will send out a late 1099 with slightly different numbers (typically error on their end) and... I've just given up caring about that. "You don't send 1099s to your landscaping service, or your office supply store purchases, or the energy company, but you've contracted services with them." "Oh, but you're a person"... with an s-corp registered for 10+ years and a separate employer TIN.

morpheuskafka 4y ago

You are required to solicit the taxpayer identification of anyone for whom you are required to file a 1099-NEC form--this is normally done on Form W-9. If the contractor fails to furnish a TIN, you are not required to cease business with them, however you will likely have to respond to the IRS and show that they refused to tell you when you file the 1099s each year. The IRS can assess a $50 civil penalty against the contractor (doubt they bother due to low amount set in statute), but more importantly the employer must withhold 30% backup withholding due to the failure to provide TIN. The employer will have to report the income and withholding on their tax return, which will likely be held up while the IRS verifies the match. I-9/E-Verify is for employees of your entity only and is not completed for independent contractors, nor for temp/contract labor who is employed by a different company (they do the form).

pc86 4y ago
Half of what you said supports the comment you're replying to, and half of it is irrelevant.
- morpheuskafka 4y ago
  The part about I-9 compliance directly contradicts the parent comment which stated, "any contractor . . . and must ask them to fill out an I-9 form." The part about the 1099 reporting does agree with the parent comment, however, added some additional context about what happens if the contractor refuses and what exactly the business's responsibility is, which I thought was relevant to this discussion.

Canada 4y ago

How ridiculous is this? Do you really have a right to free association if you have to file a report if you pay someone $600 to do something for you?

hn_throwaway_99 4y ago
> Do you really have a right to free association if you have to file a report if you pay someone $600 to do something for you? Yes, you do.
- Canada 4y ago
  How much is that worth if you aren't legally allowed to give anyone any money?
  - klyrs 4y ago
    No rights are absolute, they all have limitations when they impede on other rights. A history of unfair labor practices has established a precedent of limitations on "free association." Even the right to life has limitations in the US, if a judge finds you sufficiently heinous.
    - Canada 4y ago
      I'm not trying to advocate for some absolute freedom of action here. I'm saying it is, in my view, unreasonable that anyone who pays someone else a grand to do something suddenly has an obligation to report that to the government. To me, it seems excessive, and incompatible with the principles of a generally free society. I'm not convinced that any history of unfair labor practice justifies such reporting obligations, which imply some obligation to refuse to accept payment in exchange for performing some perfectly legal work. It seems to be that the purpose of this requirement is the convenience of enforcement of tax compliance and nothing more.
      - chipotle_coyote 4y ago

SiberianDweller 4y ago

"Oh say, can you see ... Land of the free"