The term TIN is defined as the identifying number assigned to a person under the Internal Revenue Code. A TIN may be a Social Security Number (SSN), Employer Identification Number (EIN), Individual Taxpayer Identification Number (ITIN) or Adoption Taxpayer Identification Number (ATIN).
The penalty for a payor who furnishes an incorrect name / TIN to the IRS is $50 per return with a maximum penalty of $250,000 per year ($100,000 for small businesses). The penalty for intentional disregard is $100 per return, with no maximum penalty.
The IRS has established a program called Taxpayer Identification Number (TIN) Matching Program. A program participant may check the TIN furnished by the payee against the name / TIN combination contained in the IRS database maintained for the Program. The matching details provided to participating payors will help avoid TIN errors and reduce fines and reduce the number of backup withholding notice required by the IRS. TIN Matching is an internet-based program offered by the IRS that allows payers to check if a payee’s name and TIN matches. It requires registration to receive a log on. Log onto IRS TIN Matching Program Web Page through www.irs.gov(E-Services)
Enrolled users may TIN Match in one of two ways:
· Interactively – a user can submit up to 25 name/TIN combinations at a time during a session and receive a response from the IRS within 5 seconds.
· Bulk- users may download .txt files composed of up to 100,000 name/TIN combinations and receive a response from the IRs within 24 hours.
Remember the Best practice for ALL accounts payable departments is - Never set up a new vendor without TIN Matching for verification.
To find out more about the TIN Matching Program, go to the e-Services home page at, https://la.www4.irs.gov/e-services/Registration/index.htm. An On-Line Tutorial provides a full range of information for Interactive and Bulk TIN Matching, as well as other e-Services products.
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