"Harlan Lunsford" <lunstax[at]bellsouth.net> wrote in message
news:seAul.15241$v8.10330[at]bignews5.bellsouth.net...
- quote -

Harlan,

It seems I incorrectly stated that you have to wait to be told to backup
withhold. IRS page http://www.irs.gov/efile/article/0,,id=98145,00.html
says -

What should I do if a payee refuses or neglects to provide a TIN?

Begin backup withholding immediately on any reportable payments. Do the
required annual solicitation (request) for the TIN. Backup Withhold
until you receive a TIN.


And their page at
http://www.irs.gov/publications/p17/...blink100032380 says -

Backup withholding can apply to most kinds of payments that are reported
on Form 1099.
The payer must withhold at a flat 28% rate in the following situations.
You do not give the payer your TIN in the required manner.
The IRS notifies the payer that the TIN you gave is incorrect.
You are required, but fail, to certify that you are not subject to
backup withholding.
The IRS notifies the payer to start withholding on interest or dividends
because you have underreported interest or dividends on your income tax
return. The IRS will do this only after it has mailed you four notices over
at least a 210-day period.

See Backup Withholding in chapter 1 of Publication 505 for more
information.

So, it seems that my statement that we have to wait to be told to backup
withhold was incorrect.

Backup withholding seems to be REQUIRED for all payments where the recipient
does not furnish a TIN.

Sorry for the mistake,
Gene E. Utterback, EA, RFC, ABA

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Gene E. Utterback, EA, RFC, ABA wrote:
- quote -


Hmmm.. uh... That's not what I thought, Gene. (and I thank you for
your kind words in your reply).

But I must take issue with your statement above. If a payor does not
have a TIN on file he must immediately start backup withholding. You
may have noticed that many financial institutions backup withhold for
customers when they do not have the SSN on file in the proper format or
on the proper form even though they might have the SSN in file elsewhere.

ChEAr$,
Harlan

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"DF2" <replyvia[at]newsgroup_please.com> wrote in message
news:nluir4tulps1h36iv452n4merms79a5d5l[at]4ax.com...
- quote -

NOPE!

Payments made to most corporations are exempt from withholding and the
issuance of a 1099.

And YOU do not get to decide when to start backup withholding, you have to
wait for the IRS to tell you to do so.

- quote -

a check as to be issued. This way you have all the information you need so
you'll know how to proceed when the time comes. If you have the name,
address and ID number of the recipient then you are good to go.

BUT if you let a subcontractor work for you and he refuses to give you his
ID information that refusal is insufficient to justify not paying him. AND
since you have NOT been instructed by the IRS to start backup withholding,
you can't hold back any of his money either. Hence, you have no choice but
to issue the check.

This leaves you in the unfavorable position of trying to figure out whether
you should issue a 1099 or not and if so what do you put on it. Remember,
if you should issue one and don't your only success is to have
inappropriately circumvented the safe harbor allowance for reporting.

This is just one example of why a decent tax pro is worth what he charges,
and top shelf guys )like me, Harlan, Dick, Paul, Phil and several others)
are worth even more.

It is also why NO ONE should attempt to do their own business return, at
least not the first one anyway, without first seeking the advice of a
competent tax pro. There are so many things that nonprofessionals miss,
mostly because they don't know about them, that could be costing them big
money. And even if they've done everything right, what have they lost in
opportunity because they had to learn the tax aspects of their business, or
how much sleep have they lost wondering if they missed something.

I am all for people keeping their costs down, but don't be penny wise and
pound foolish!

Gene E. Utterback, EA, RFC, ABA

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In misc.taxes.moderated, Harlan Lunsford wrote:

- quote -

If a subcontractor failed to give you a tax ID number, wouldn't you
be required to withhold?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Gene E. Utterback, EA, RFC, ABA wrote:
- quote -

Gene has just said it all and very correctly and very eloquently I think.

I recommend also that any payer not be tempted to accommodate a sub
contractor for fear of being re classified by IRS with dire consequences.

IOW, don't bait the bear.

ChEAr$,
Harlan Lunsford, EA n LA

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Grip" <grip[at]cybermesa.com> wrote in message
news:73730866-8e56-44b4-bd65-942eb7fc7393[at]c11g2000yqj.googlegroups.com...
- quote -

In the paraphrased words of Elmer Fudd - BE VEWY, VEWY CAREFUL HERE!

Contractors and employee's get separate tax treatment. Blurring that line
could come back to bite you in a way that you are not prepared to deal with.
If you start treating this IC as an employee, by withholding and remitting
tax for them, do NOT be surprised when the authorities step in and
reclassify the IC as an employee. That would put you on the hook on for
HALF of the FICA taxes PLUS Federal and State unemployment, worker's comp
coverage and any fringe benefits you pay to other employees (like yourself)
for things like health insurance, retirement plans, vacation and sick leave,
etc.

If your IC is having trouble making quarterly payments - likely because they
spend the money and have none left - the better solution is for them to
remit the taxes more often than quarterly.

We have a few IC clients who have trouble saving enough to mail in quarterly
payments. So we print twelve (12) estimated tax payment coupons for most of
them - for one of them we actually print 52 quarterly payment coupons. This
way they can mail in the money every month, or week. Now they don't have to
save up the money, they send it in as soon as they get their checks.

Were you my client I would tell you ABSOLUTELY NO, you cannot withhold and
remit taxes for them UNLESS you are ready to make them an employee.

Be careful,
Gene E. Utterback, EA, RFC, ABA

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Grip" <grip[at]cybermesa.com> wrote in message
news:73730866-8e56-44b4-bd65-942eb7fc7393[at]c11g2000yqj.googlegroups.com...
- quote -

It is possible.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Grip" <grip[at]cybermesa.com> wrote
- quote -




Yes you can. Most commonly it's done because the IRS instructs you to -
called backup withholding.


Pay the taxes as you would your employees payroll withholding, but the tax
type is 945 instead of 941, so the tax deposit is made separate from your
employee payroll tax. The annual report to file to reconcile the tax
withheld and paid with the 1099 is Form 945 - here:
http://www.irs.gov/pub/irs-pdf/f945.pdf with instructions here:
http://www.irs.gov/pub/irs-pdf/i945.pdf




--
Paul Thomas, CPA
Watkinsville, Georgia

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I have a subcontractor who has trouble pay her quarterly estimated
taxes. She wants to know if I can withold taxes from her checks and
send it into the IRS. I'm willing to accommodate her because I do
like her, but don't know if this is possible.

Can I withhold taxes from an subcontractor's paycheck at their request
and send it to the IRS?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >