Expert: Ed McFarland - 5/12/2006

Question
I use a subcontractor for some work that is out of my skill set.  He does great work. Last year I paid him 605.00
I requested that he fill out a W-9.  I never got a response.  He had done some work for me this year around 660.00. Again no response.  I was going to send him a check tomorrow but I want to make sure I get a w-9 first.  Any suggestions?

Answer
Penalties for not reporting W9 information can be tremendous. By law, you have the right to garnish all payments by 30% until the correct information is on file. This is called back-up withholding.

It use to be a hit or miss thing about reporting. Now, with the technology, it is easier for the tax agencies to catch up.

Good luck