Tax Equity and Fiscal Responsibility Act

[Erik Anderson]

I sent an invoice to a company I did business for and received this in response:

As a vendor of xxx, we need to inform you of the following:

Tax Equity and Fiscal Responsibility Act requires withholding 31% on any payment for services rendered if the payee has not furnished a nine-digit SS number or Federal Employee number.

Teh include a W-9 to fill out and return. This is the first time I've run into this. I trust the owner, but this seems odd to me. Can anyone shed some light onto this?

[Dennis Murray]

It's basically a form the IRS wants companies to keep to show that they paid a non-employee $x amount for services and the non-employee entity (Company or individual) is responsible for filing and paying taxes on their own.

$600 is traditionally the threshold for being required to file a W-9.

[Erik Anderson]

That's why I thought this way odd. I've done large jobs with no requirement for this, so it came as a bit of a surprise.

[Andrew Wheeler]

Actually your best bet would be to have a completed W9 ready to go.

I always submit a W9 with an invoice, or the first invoice, with a client. That way most large companies can set you up as a vendor and thus you'll get paid.

Andrew

[Erik Anderson]

Andrew,

Great idea! Thanks!