05.25.07
Yet Another Brilliant Idea
This week we continue to look at the tax gap proposals presented by the Bush administration. Another proposal to keep your eye on is the one calling for businesses to verify taxpayer identification numbers (TINs).
Currently, if you pay an indepedent contractor $600 or more for services annually, you are required to send that individual a Form 1099. Traditionally, as a business owner, you’ve relied on using whatever taxpayer identification number that they provide to you. However, under this new proposal, you would have to verify that contractor’s TIN with the IRS. If the IRS can’t verify the number, then the business would have to withhold taxes on payments made to the contractor.
If this legislation passed, you would then have to potentially add the responsibility of tax collector to your list of “things to do and be” as a small business owner.
