Alternate FEIN numbers?

[Nashville]

A couple of rental landlords have asked me about issuing 1099s to maintenance companies bearing something other than their social security numbers.

Here's the scenario: Over the course of the year, they pay repairmen over $600 so they HAVE to issue 1099s for labor performed. But in this era of identity fraud they don't want every repairman in town to know their SS#. They have asked me if there is something they can submit on the 1099s other than their SS#.

I sorta sympathize with them. Tax preparers now have PTIN #s, so their SS# is no longer appearing on tax returns that we sign.

Anyone have a solution to this? (Outside of incorporating, or creating an LLC with a 9-digit FEIN #. They want to remain individuals)

[ATSMAN]

If the repairman does not want his social security # on the 1099-Misc, then get an EIN for the business and the 1099-Misc can be issued to that EIN. You don't have to be a LLC or Corp. to get a EIN. Sole props can get their own EIN.

Do not fall into the trap of issuing a 1099-Misc to a bogus SS#. I fired a client who asked me to do that.

[Y2KEA]

SS-4 Box 10

Get an EIN by checking "Banking" in box 10 of the SS-4.

[RLymanC]

ON Line EIN

This should help with your 1099's,,,get EIN immediately

http://www.irs.gov/Businesses/Small-Businesses-%26-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online

[ChEAr$]

I know we've batted this about previously, here and/or there, but instructions for 1099misc prominently say "Trade or business reporting only." on page 1.

Add to that the fact that publication governing rental income and expenses does not mention any requirement for 1099-misc from individual who own rental property.

Instead of trade or business, rental property is investment property anyway.

[Gene V]

I know we've batted this about previously, here and/or there, but instructions for 1099misc prominently say "Trade or business reporting only." on page 1.

Add to that the fact that publication governing rental income and expenses does not mention any requirement for 1099-misc from individual who own rental property.

Instead of trade or business, rental property is investment property anyway.

Seems like in 2011 the Schedule E form added question A to PART 1.

instruction from Schedule E

Line A
If you made any payments in 2013 that
would require you to file any Forms
1099, check the “Yes” box. Otherwise,
check the “No” box. See the 2013 General
Instructions for Certain Information
Returns if you are unsure whether you
were required to file any Forms 1099.
Also see the separate instructions for
each Form 1099.

Generally, you must file Form
1099MISC
if you paid at least
$600 in rents, services, prizes,
medical and health care payments, and
other income payments. The Guide to
Information Returns in the 2013 General
Instructions for Certain Information
Returns has more information, including
the due dates for the various information
returns.
TIP

[JON]

I believe for both 2011 and

2012, the IRS had said for rentals on 1040 Schedule E there was no requirement to answer the 1099 question. We pretty much have our have trained our landlords to do 1099s so we have answered.

[Burke]

This requirement was repealed for landlords by the Comprehensive 1099 Taxpayer Protection......Act on 4/14/11. However, see the article by AICPA.org regarding this issue. https://www.aicpa.org/interestareas/...irements.aspx?

[Black Bart]

1099s required for landlords or not?

This requirement was repealed for landlords by the Comprehensive 1099 Taxpayer Protection......Act on 4/14/11. However, see the article by AICPA.org regarding this issue. https://www.aicpa.org/interestareas/...irements.aspx?

The suggestion to apply for an EIN to mask the SSN was a good one, but this AICPA article which purports to answer the question of whether landlords MUST file 1099s doesn't seem quite clear to me. It seems to imply that the very appearance of questions A & B on Schedule E or that the occasional attorney payment make it mandatory to file 1099s at all times.

Any other opinions? Should landlords always file? Yea or nay?

P.S. I don't file them (using the "trade or business" rationale), but I do answer "No" to question A on Schedule E.

[Nashville]

Thanks to All

Your responses are appreciated. This has become more controversial since the IRS plugged in the two questions atop the Schedule E.

And if rental income is "ruled" a business by a court, then a case can be made that it is taxable under self-employment tax, but NOT taxable under the Obamacare 3.8% investment income.

[taxea]

I know we've batted this about previously, here and/or there, but instructions for 1099misc prominently say "Trade or business reporting only." on page 1.

Add to that the fact that publication governing rental income and expenses does not mention any requirement for 1099-misc from individual who own rental property.

Instead of trade or business, rental property is investment property anyway.

I also know that this is what the IRS says....but even though the IRS doesn't look at a rental property as a "business", the general public does. I issue 1099's to workers to insure that I don't end up paying their taxes because they are not reporting the income even when the check is written to a business (they could be cashing the check rather than depositing it. Even for other personal repairs etc to my own home I issue 1099's. I am sure the IRS is not going to refuse to accept the reporting nor do I believe they will disregard the 1099 when comparing income on the workers return.

The bank requires a EIN to open a rental account because they consider it a business. Get an EIN for the rental account and use it.

[taxxcpa]

I have a corporate client who had been paying two so-called independent contractors without obtaining a SSN. I had made about three requests that he obtain their SSNs which he ignored. Finally I sent him a scary letter about how he might have to pay a lot of payroll taxes if the IRS ever noticed it and some other implications like what would happen if one of his "independent contractors" filed for unemployment compensation and listed his company as their last employer.

The next day he gave me the SSNs.