Discussion:1099 Interest S Corp
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Discussion Forum Index --> Basic Tax Questions --> 1099 Interest S Corp
Discussion Forum Index --> Tax Questions --> 1099 Interest S Corp
| 10 February 2008 | |
| I have a S Corp client who paid over $1000 in interest to an individual in 2007. I believe we must file a 1099 INT for this. My client has given a W-9 to the individual to request information but they refuse. How do I handle this? Tried to get thru to the IRS several times but line is always busy. Any ideas?
Thanks Steve | |
| February 10, 2008 | |
| Stop paying the interest, which is what is required by IRS. | |
Michaelstar (talk|edits) said: | 10 February 2008 |
| Actually, in this situation, if the S-Corp provides a W-9 to the individual and they refuse to provide a completed copy, the S-Corp has a manditory backup withholding requirement to follow. I am unaware of the obligation to stop paying the interest on the loan itself. | |
| February 10, 2008 | |
| Just the general rule that you don't pay until/unless you get the SS#. That's the rule, I thought for MISC's, assume the same for INT. True or not, it's what I'd tell the recipient. | |
Bottom Line (talk|edits) said: | 10 February 2008 |
| Remind the individual that the IRS can charge a $50 penalty for them not providing this info. | |
Msmith7305 (talk|edits) said: | 10 February 2008 |
| I believe the "best" policy would be to consult your attorney regarding not paying a legal obligation before I flat out quit paying what I am obligated to pay. Do the backup withholding if required. That will usually get someone's attention. For a 1099-MISC recipient, best thing is to quit using them if no ID provided. | |
| 10 February 2008 | |
| Backup withholding is necessary for the 1099 INT; for the misc, you withhold payment for the compensation without a w7 on file.
Just as banks withhold taxes on interest if subject to backup withholding, so the S corp or any other entity is required to do the withholding and remit it to IRS.... | |
Michaelstar (talk|edits) said: | 11 February 2008 |
| JR - well deep down I might agree with you about freezing payments, it is really only a gut reaction to someone who refuses to provide a completed W-9. Now for services, even in one refuses to provide a completed W-9, it may be legally incorrect to withhold full payment for services provided but w/out one the sucker is subject to withholdings.
As for holding payment on a note, in my mind that would only cause the interest to accrue in effect increasing the o/s debt. None of this is a pleasent place to want to be placed in when one refuses to provide a completed W-9 but when it happens, forcing the withholding issue, may very well cause the idiot who started the mess by the refusual to comply and fill one out. | |
