Form W-9 is mandatory when requested as the requester needs your taxpayer identification number to file the necessary tax forms. When this demand is not met, there are penalties.
Get the most recent Form W-9 for 2023.
These penalties are mostly a one-time monetary fine that can further be more than just that. This article will go over everything you need to know about the W-9 penalties.
Monetary penalties
Failure to file Form W-9 is punishable by a monetary penalty. The penalty amount is $50. Although this may not seem as much, this is per instance. As the number of W-9s you don’t file adds up, do so the penalties. For example, if there are a total of 15 Forms W-9 left unfiled, you’ll pay $750 in penalties.
Backup withholding
Other than the $50 monetary penalty, there is also the backup withholding. Not every taxpayer will be subject to this but as you make it difficult for the requester, the chances are you will.
That said, backup withholding is more than a possibility in most cases. What this refers to is simple enough. The payer will hold a portion of your income and forward the proceeds to the Internal Revenue Service. The reason for this is because you’re not handling your fair part, the information returns can’t be filed. As all taxpayers must report their income and pay taxes on them, the payer will withhold taxes as if they were your employer.
These are the two penalties for Form W-9.