Dealing With The W-9 Form And IRS

[SovereignMan]

Well, I'm traversing the path of living without the number.

I've ran up against a few people I do business with that are now requiring a W-9.  They are refusing to pay without filling out the W-9 from. 

What has worked for you in the past in this situation?

[Pat McCotter]

Sounds like you mean the I-9 form. This would be the INS form.

All U.S. employers are responsible for completion and retention of Form I-9 for each individual they hire for employment in the United States. This includes citizens and noncitizens. On the form, the employer must verify the employment eligibility and identity documents presented by the employee and record the document information on the Form I-9. The list of acceptable documents has been amended in the 2007 version of the Form I-9 and can be found on page 4 of the forms.

[SovereignMan]

Not that I-9.  It's the W-9 form.  I work for myself, and some clients are demanding the W-9 form to be completed before they will pay me.

Anyone else have experience with this?

[doobie]

Start a corporation and get a EIN.

[Pat McCotter]

Ah, yes. I filled one of those out once. Then when that project was done I continued in my W-4 job.

Sorry, can't help you there. Most (all) companies I know aren't going to buck the IRS on third-party reporting requirements.

[MTPorcupine3]

Keep looking for people who will hire you without kowtowing to Big Brother. No, it isn't always easy. It's easier than suing those who refuse to hire you for lack of Slave Surveillance Number and Infernal Revenue Service forms. I've not used either since January 2002... and then "under duress", which I wrote under my signature and under the SSN. Think that'll end up in court as evidence against me?

[Roycerson]

Not that I-9.  It's the W-9 form.  I work for myself, and some clients are demanding the W-9 form to be completed before they will pay me.

Anyone else have experience with this?

Yes.  You have to make a choice.  Were you under the impression that not playing by the rules wasn't going to hit you in the pocketbook?

[SovereignMan]

It is not a matter of not playing by the rules.  I'm sure you are all familiar with the fact that we do not have to opt into this system.  And that an employer, contractor, or client does not have to demand this form or SSN from you or I.

It is the fraudulant IRS system that is not playing by the rules. 

My question is with those currently realities how have you been able to work with clients or employees that are asking for the W-9 from?

 

[Roycerson]

If they insist on the paperwork I tell them I can't work with them.  Usually I still pick up smaller jobs from them.  They might think I'm crazy but I'm a likeable kind of crazy and it's the work that matters.  For example, there's one guy that won't use me for any commercial work anymore like slicing and dicing stripmalls and office space, which is something I can do fast and cheap but he will use me for residential work since his reporting requirements are different and it's likely he just doesn't report some portion of his residential work.  As far as employees go, in my business no one complains about getting paid in cash.

All in all, staying under the radar requires a significant hit to my potential income.  I'd recommend anyone considering that route be aware of that in advance. 

[FTL_Ian]

Perhaps "accidentally" put down the wrong SS number.  These just go into their files and don't actually to the IRS, right?

[Roycerson]

These just go into their files and don't actually to the IRS, right?

Sometimes they don't check right away, sometimes they do.  The guy I referred to above had gotten in trouble w/ employees having fake SSNs before and it cost him a significant amount of money.  Come tax time, that fake number goes to the IRS along with how much the purported owner of that number was paid.  Even if you could get away with that, then you have to play around in the moral gray area about it's OK to sign a false statement because I am only doing so under duress which to me is not all so clear, particularly if your employer is more than happy to comply with the IRS and doesn't wish to do business w/ people who aren't.  There's also the risk of them coming after you for fraud.  If one project is going to account for 20% of your business for a year that might seem like too much to walk away from but if that one project gets the IRS looking into what you were doing for the other 80% of the year it doesn't look so good anymore. 

I have in the past been willing to have a small amount of income reported, less than 5,000 a year.  One could argue it's better that way since it shows you have some money which could explain how you pay for your cell phone but it's still under the reporting requirement.  Anymore, I just don't sign any IRS/INS forms for any reason.  I know several people who have run afoul of the thugs for fudging paperwork or not filing after having an employer/client report their income but have never met anyone who didn't fill out any paperwork at all who have had IRS problems.