Avoid receiving TIN errors on your filings by using a TIN validation tool, like TINCorrect prior to submitting your filing.
What is TINCorrect?
TINCorrect allows you to verify SSNs (Social Security Numbers) or company EINs (Employer Identification Numbers) prior to submitting your tax forms to the IRS. Submitting tax forms with the wrong TIN information can result in additional IRS scrutiny on your filing in addition to having to correct your filing, re-file your forms, and re-issue corrected employee copies.
With TINCorrect, you can make sure your TINs are correct before you file.
What is a TIN?
A TIN (Taxpayer Identification Number) can be either a Social Security Number or an Employer Identification Number. The IRS uses a TIN to verify the identity of each payee.
How does the TINCorrect process work?
For checking a handful of TINs at once, you can use our on-demand search to get verification results within seconds.
For larger batches, you can use our simple drag and drop file import. We will automatically remove any invalid TINs, and we can return the results of this search typically within a day. (This may take longer during peak tax season.)
Why is this beneficial?
By catching TIN issues before you file, you give yourself the opportunity to fix these issues prior to filing where the IRS would take notice of these issues. This also gives you the opportunity to do a TIN solicitation to get the most up to date information from your payees to fix these issues and show that you’ve made a good faith effort to correct your invalid TIN information.
The IRS ACA instructions state if you fail to file correct information returns, you may be subject to a penalty. The ACA penalty for failure to file a correct information return is $310 per form for which the failure occurs, not to exceed $3,783,000.
These penalties may be waived if the failure was due to a reasonable cause and not willful neglect.
Form W-2 & 1099 Series Penalties
The IRS Form W-2 and 1099 instructions state if you fail to file correct information returns and you cannot show reasonable cause, then you may be subject to a penalty. This penalty amount is based upon when you file the correct information return.
- $60 per information return if you correctly file within 30 days
- Maximum penalty $630,500 per year
- $120 per information return if you correctly file more than 30 days after the due date but by August 1;
- Maximum penalty $1,891,500 per year
- $310 per information return if you file after August 1 or you do not file required information returns;
- Maximum penalty $3,783,000 per year
There are some exceptions to the penalty, though. More information regarding exceptions can be found in the IRS instructions.
If you fail to file Form 1099 corrections and don’t meet any of the exceptions to the penalty, then the penalty is $310 per information return.
We have a plethora of resources to ensure that you’re up-to-date on the latest tax news. Check out our Essential Guides to master all of your filing requirements and for more information on preparing your filings.
Sign up with TINCorrect today and begin your free trial!
BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.