Whose Ox is Gored

[Corduroy Frog]

Ever notice what is offered as "truth" depends on whose ox is gored? I recall this conversation:

Background: Crew of 6 shows up one Thursday to quickly build the wall on a block building.

Contractor: "Yessiree!! We'll get this job done in no time flat. These are MY men and they do what I tell them to do. If one of them gives you a problem, just let me know and I'll chew him up one side and down the other."
Paymaster: "I'm glad you've got such control. Doesn't happen often. I think that's admirable."
Contractor: "It's getting close to 4 o'clock. We'll be done by 5:00. There won't be any problem getting me a check for $1600, will there?"
Paymaster: "Oh no, sir. I'll have it ready. Let me first ask you to give me your social security # and address on a W-9?"
Contractor: "What on earth for?"
Paymaster: "So I can send you a 1099 at the end of the year. There is a $600 threshhold, and I'm paying you $1600."
Contractor: "Let me go check with my crew first. I'll be back in a minute."

...after a few minutes pass:

Contractor: "Here is a list of these six people, and the amounts they are to be paid. NONE of them are over $600."
Paymaster: "Yes, but we contracted with you for the work."
Contractor: "Sir, these are six independent contractors. They don't really work for me. They just do jobs around town and sometimes they work with me."
Paymaster: "I thought they worked for you and you said you had total control of them."
Contractor: "Yes, but they're really each and every one of them working for themselves for tax purposes."

A convenient "truth".

[ChEAr$]

More to the story.

If employer agreed to this arrangement even at this late date, he would have to have W9 filled out by each one of them.
If not, he would have to withold on each one not providing W9 information (whether on the w9 or acceptable substitute form). That part does not depend on the $600 threshhold.

[DaveO]

Good point Harlan.

[Nashville]

Not Ditto

If employer agreed to this arrangement even at this late date, he would have to have W9 filled out by each one of them. That part does not depend on the $600 threshhold.

Not ditto on this Harlan and Dave. Does a requirement exist to procure a Name, Address, SS# for a recipient who does NOT meet the $600 threshhold? And even if it does, is there any among us who would waste a client's time chasing down these numbers for people who are NOT going to get a 1099?

I would not argue against a good practice of getting these numbers on the front end in case a recipient gets more money before the year is over. But a requirement?? Code & Regs? Maybe. Real World? I doubt it.

As Charlie Brown would say - "Good Grief..."

[ChEAr$]

Yes. All recipients of payments for services must provide required data.

And it's a good requirement since even if you make one payment of say $ 350, you don't know if later in the year you might make another of same amount to the same person.

The real reason for this is that recipient swears or affirms that he is not subject to backup withholding.

[Nashville]

Good Reason

The real reason for this is that recipient swears or affirms that he is not subject to backup withholding.

A good reason Harlan, and worthy of note...