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1099-NEC and Payer's TIN

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Wilson

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Jan 16, 2024, 5:28:56 PMJan 16
to
On the form 1099-NEC, it asks for the Payer's TIN and will only accept
numbers in the format of XX-XXXXXXX. This is the only guidance that seems to
tell me my client needs a TIN whereas we have used his Soc. Sec. EIN forever.

What Publication clearly states that the Payer's TIN must be used. It's a
Sole Proprietorship with no employees. It's a fishing vessel and payments to
the workers must be recorded with the 1099-NET instead of 1099-MISC.

Thanks.

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Stuart O. Bronstein

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Jan 16, 2024, 5:59:05 PMJan 16
to
Wilson <now...@nearyou.com> wrote in news:uo6ut4$1hqe5$1...@dont-email.me:

> On the form 1099-NEC, it asks for the Payer's TIN and will only accept
> numbers in the format of XX-XXXXXXX. This is the only guidance that
> seems to tell me my client needs a TIN whereas we have used his Soc.
> Sec. EIN forever.
>
> What Publication clearly states that the Payer's TIN must be used.
> It's a Sole Proprietorship with no employees. It's a fishing vessel
> and payments to the workers must be recorded with the 1099-NET instead
> of 1099-MISC.

A Social Security Number has the same number of digits as an EIN. Just
fill in the digits and don't worry about the dashes.


--
Stu
http://DownToEarthLawyer.com

Bob Sandler

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Jan 16, 2024, 7:44:17 PMJan 16
to
>On the form 1099-NEC, it asks for the Payer's TIN and will only accept
>numbers in the format of XX-XXXXXXX. This is the only guidance that seems to
>tell me my client needs a TIN whereas we have used his Soc. Sec. EIN forever.
>
>What Publication clearly states that the Payer's TIN must be used. It's a
>Sole Proprietorship with no employees. It's a fishing vessel and payments to
>the workers must be recorded with the 1099-NET instead of 1099-MISC.

What is "it" that will only accept an EIN? The IRS form has
just a blank box for the payer's TIN. There is no
publication that clearly states that it has to be an EIN,
but there are IRS instructions that clearly state that it
can be a Social Security number (SSN). The IRS 2023 General
Instructions for Certain Information Returns say the
following on page 14.

"The TIN for filers of information returns, including sole
proprietors and nominees/middlemen, is the EIN. However,
sole proprietors and nominees/middlemen who are not
otherwise required to have an EIN should use their SSNs."

So as far as the IRS is concerned it's perfectly acceptable
for a sole proprietor to use a Social Security number. If
you are using software that insists on formatting it as an
EIN you need to contact the software provider or find
different software for issuing 1099-NEC forms.

You can download the IRS instructions from this link:
https://www.irs.gov/pub/irs-pdf/i1099gi.pdf

Bob Sandler

retired1

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Jan 16, 2024, 10:50:07 PMJan 16
to
The OP might also find this info re TINs helpful

https://www.irs.gov/individuals/international-taxpayers/taxpayer-identification-numbers-tin

or http://tinyurl.com/2s44r76x

Basically "TIN" is a catchall acronym/phrase for the 5 specific TINs.

Taxpayer Identification Numbers
Social Security number "SSN"
Employer Identification Number "EIN"
Individual Taxpayer Identification Number "ITIN"
Taxpayer Identification Number for Pending U.S. Adoptions "ATIN"
Preparer Taxpayer Identification Number "PTIN"

Wilson

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Jan 17, 2024, 11:31:55 AMJan 17
to
My software is H&R Block Business. If I try to put a SSN in the Payer's TIN,
111-11-1111 will be recorded by the software as 11-1111111. This isn't just
for this year, the software has required the latter format since 2021.

I can get a TIN in the latter format from the IRS in short order. I can't
imagine H&R Block hasn't heard of this 'glitch' in their software by now.
Thanks.

Adam H. Kerman

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Jan 17, 2024, 2:27:36 PMJan 17
to
Wilson <now...@nearyou.com> wrote:

>>. . .

>My software is H&R Block Business. If I try to put a SSN in the Payer's TIN,
>111-11-1111 will be recorded by the software as 11-1111111. This isn't just
>for this year, the software has required the latter format since 2021.

>I can get a TIN in the latter format from the IRS in short order. I can't
>imagine H&R Block hasn't heard of this 'glitch' in their software by now.
>Thanks.

Waitaminit. The person performing data entry MUST NOT be required to enter
the hyphens. If entering hyphens is optional, then the hyphens should
be removed before parsing the number to see if it's an SSN or EIN. The
hyphens, which makes the number more human readable, should be used for
display only. But they are not part of the number itself.

TINs that aren's SSNs are assigned from reserved blocks of numbers that
aren't assigned as SSNs. A long long time ago, the first group of numbers
in the SSN indicated which office had assigned the number. After Social
Security card issuance was centralized in 1972, the first three digits
were assigned to a specific state based on the ZIP code in the mailing
address. It was a hint as to where the person was living at the time he
first got a job or applied for driver's license training. The two middle
digits indicated which blocks of serial numbers were available for
assignment at a given time and was a vague hint about whether the number
was genuine. The geographic indicator went away with randomization,
starting in 2011, and the middle two digits no longer represented blocks
of serial numbers that were open for assignment at a specific period of
time.

Similarly, the first two digits of the EIN indicated which IRS district
or key district assigned the EIN in the days in which the employer was
assigned a specific office to apply to based on its location. However,
if an application or return required an EIN and the employer didn't yet
have one, the IRS office that received the application or return would
assign an EIN out of its own pool of numbers and the employer would end
up with an EIN from a different geographical pool. Due to the possibility
of an employer being assigned a number from multiple offices, one could
end up with more than one number. This happened to me. I had to ask for a
letter from IRS instructing me to use one number and not the other number.

Today, EINs from a pool of numbers of whichever office did the work when
the application was received.

But the ranges of number from which SSNs are not assigned are well known.
A quick pattern match of the first five digits is sufficient to tell
that the number isn't an SSN and therefore assigned by IRS. Within the
ranges of numbers assigned by IRS, blocks of numbers are reserved for
all the other TINs that aren't EINs assigned by IRS. ATINs and ITINs are
each assigned from reserved ranges. An ATIN is used only for a dependant
on an individual tax return and no where else. If it's used on a 1099,
it must be rejected in software.

I can't think of a scenario in which an ITIN would appear on a 1099, but
a foreign national without a visa allowing him to work (which means he's
ineligible for Social Security) can receive interest belonging to
someone else as a nominee.

As far as a PTIN, that is NOT a taxpayer identification number for the
purpose of reporting payments, as either payee or payor, on a 1099. It
appears ONLY on a tax return prepared by a third party.

Why are PTINs assigned from reserved ranges of nine-digit numbers?
That's outrageous.

Yes, I know why IRS did it, as their computers were programmed to use
the preparer's SSN initially, but that the number identifying the
preparer should have been entered into a separate block during the
transition between use of the preparer's SSN and the new identifying
number. With 20-20 hindsight, obviously the preparer's SSN never should
have been required to begin with for privacy reasons.

Bob Sandler

unread,
Jan 17, 2024, 3:48:00 PMJan 17
to
>Why are PTINs assigned from reserved ranges of nine-digit numbers?
>That's outrageous.
>
>Yes, I know why IRS did it, as their computers were programmed to use
>the preparer's SSN initially,

A PTIN is not a 9-digit number. It's the letter P followed
by 8 numeric digits.

Bob Sandf;er

Adam H. Kerman

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Jan 18, 2024, 12:14:08 AMJan 18
to
Bob Sandler <bob_u...@yahoo.com> wrote:

>>Why are PTINs assigned from reserved ranges of nine-digit numbers?
>>That's outrageous.

>>Yes, I know why IRS did it, as their computers were programmed to use
>>the preparer's SSN initially,

>A PTIN is not a 9-digit number. It's the letter P followed
>by 8 numeric digits.

Glad to hear that they weren't assigned out of the pool of SSNs.

Wilson

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Jan 18, 2024, 4:57:14 PMJan 18
to
On 1/16/2024 5:27 PM, Wilson wrote:
> On the form 1099-NEC, it asks for the Payer's TIN and will only accept
> numbers in the format of XX-XXXXXXX. This is the only guidance that seems to
> tell me my client needs a TIN whereas we have used his Soc. Sec. EIN forever.
>
> What Publication clearly states that the Payer's TIN must be used. It's a
> Sole Proprietorship with no employees. It's a fishing vessel and payments to
> the workers must be recorded with the 1099-NET instead of 1099-MISC.
>
> Thanks.
>
In the Instructions for Forms 1099-MISC and 1099-NEC (Rev. January 2024), on
pg. 10, it says this and note the format:

'Recipient's TIN Enter the recipient's TIN using hyphens in the proper
format. SSNs, ITINs, and ATINs should be in the XXX-XX-XXXX
format. EINs should be in the XX-XXXXXXX format.'

It is that second format, that I have been using for years, XX-XXXXXX. These
EINs can be applied for at
https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

The IRS constantly uses TIN and EIN interchangeably. In those first two
boxes on form 1099-NEC it asks for 'Payer's TIN' and shows format XX-XXXXXX.

In the next box, it asks for 'Recipient's TIN' and shows format XXX-XX-XXXX.

Obviously two different forms describing the 'TIN.' VERY CONFUSING.

Usually, I get good advice from this group, but this time, I'm thinking I'll
have to rely on my own understanding. Thanks to all that tried answering my
question.

Ira Smilovitz

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Jan 18, 2024, 4:57:14 PMJan 18
to
While there aren't supposed to be any, mistakes have happened. A quick
Google search will reveal many instances of SSN/EIN overlaps.

Ira Smilovitz, EA
Leonia, NJ

Bob Sandler

unread,
Jan 18, 2024, 5:47:24 PMJan 18
to
>The IRS constantly uses TIN and EIN interchangeably. In those first two
>boxes on form 1099-NEC it asks for 'Payer's TIN' and shows format XX-XXXXXX.
>
>In the next box, it asks for 'Recipient's TIN' and shows format XXX-XX-XXXX.

The IRS Form 1099-NEC does not show any format in the boxes
for Payer's TIN and Recipient's TIN. They are just blank
boxes. You are looking at H&R Block's interpretation of the
form or some other interpretation of the form, not the
actual IRS form. If there is any confusion it is caused by
whoever is adding their own embellishments to the form.

Here is a link to download the IRS Form 1099-NEC from the
IRS web site.
https://www.irs.gov/pub/irs-pdf/f1099nec.pdf

Bob Sandler

Adam H. Kerman

unread,
Jan 18, 2024, 7:47:55 PMJan 18
to
Ira Smilovitz <irasmi...@gmail.com> wrote:
>On Wed, 17 Jan 2024 14:25:43 -0500, Adam H. Kerman wrote:
>>Wilson <now...@nearyou.com> wrote:

>>>>. . .

>>>My software is H&R Block Business. If I try to put a SSN in the Payer's
>>>TIN, 111-11-1111 will be recorded by the software as 11-1111111. This
>>>isn't just for this year, the software has required the latter format
>>>since 2021.

>>>I can get a TIN in the latter format from the IRS in short order. I
>>>can't imagine H&R Block hasn't heard of this 'glitch' in their software
>>>by now. Thanks.

>>Waitaminit. The person performing data entry MUST NOT be required to
>>enter the hyphens. If entering hyphens is optional, then the hyphens
>>should be removed before parsing the number to see if it's an SSN or
>>EIN. The hyphens, which makes the number more human readable, should be
>>used for display only. But they are not part of the number itself.

>>TINs that aren's SSNs are assigned from reserved blocks of numbers that
>>aren't assigned as SSNs. . . .

>While there aren't supposed to be any, mistakes have happened. A quick
>Google search will reveal many instances of SSN/EIN overlaps.

I withdraw my comment that the nine-digit string stripped of hyphens may
be parsed to determine if it's an SSN or EIN. Therefore, the H&R Block
software should have used an additional character for TIN type.

Given that there are certain fields on information returns that can have
either an SSN or an EIN, and the data is transmitted electronically to IRS
as a 9-digit all-numeric string, then IRS itself has no method of parsing
which number it is and would have to perform the name match against more
than one database.

This page has a list of valid EIN prefixes and which office assigned
them. There is a reserved prefix used for assignment by Small Business
Administration.

https://www.irs.gov/businesses/small-businesses-self-employed/how-eins-are-assigned-and-valid-ein-prefixes

The EIN page on Wikipedia says that the EIN system was created in 1974.
It would have been so simple for IRS to enumerate employers without
making the EIN appear to be an SSN.

SSN was first issued in 1936. I'm surprised that employers weren't first
enumerated at the same time as employees.

Adam H. Kerman

unread,
Jan 18, 2024, 7:47:55 PMJan 18
to
Wilson <now...@nearyou.com> wrote:

>. . .

>The IRS constantly uses TIN and EIN interchangeably. In those first two
>boxes on form 1099-NEC it asks for 'Payer's TIN' and shows format XX-XXXXXX.

>In the next box, it asks for 'Recipient's TIN' and shows format XXX-XX-XXXX.

>Obviously two different forms describing the 'TIN.' VERY CONFUSING.

It's not being used interchangeably. If a payment is reportable for tax
law compliance, then both the payor and payee need Taxpayer
Identification Numbers. An individual has a Social Security Number and a
business or nonprofit or estate has an Employer Identification Number.

On payroll information returns, the data entry in the field takes the
EIN for the employer or the SSN for the employee.

On information returns for non-payroll payments, almost always, a
business/nonprofit/estate or an individual may appear as the payor or
payee.

>Usually, I get good advice from this group, but this time, I'm thinking I'll
>have to rely on my own understanding. Thanks to all that tried answering my
>question.

Hey! I'm the only one who gave the wrong answer. I thought a 9-digit
string could be parsed to determine if it's an SSN or EIN, but it turns
out that it cannot be. Everyone else in this thread gave decent answers.

Stuart O. Bronstein

unread,
Jan 18, 2024, 10:08:06 PMJan 18
to
Wilson <now...@nearyou.com> wrote in news:uobid8$2ku8u$1...@dont-email.me:

> The IRS constantly uses TIN and EIN interchangeably. In those first
> two boxes on form 1099-NEC it asks for 'Payer's TIN' and shows format
> XX-XXXXXX.

TIN is the larger category. An EIN is one type of TIN. It's not the only
type of TIN, however.

--
Stu
http://DownToEarthLawyer.com

Wilson

unread,
Jan 19, 2024, 12:30:30 PMJan 19
to
On 1/18/2024 7:44 PM, Adam H. Kerman wrote:
> Wilson <now...@nearyou.com> wrote:
>
>> . . .
>
>> The IRS constantly uses TIN and EIN interchangeably. In those first two
>> boxes on form 1099-NEC it asks for 'Payer's TIN' and shows format XX-XXXXXX.
>
>> In the next box, it asks for 'Recipient's TIN' and shows format XXX-XX-XXXX.
>
>> Obviously two different forms describing the 'TIN.' VERY CONFUSING.
>
> It's not being used interchangeably. If a payment is reportable for tax
> law compliance, then both the payor and payee need Taxpayer
> Identification Numbers. An individual has a Social Security Number and a
> business or nonprofit or estate has an Employer Identification Number.
>
> On payroll information returns, the data entry in the field takes the
> EIN for the employer or the SSN for the employee.
>
> On information returns for non-payroll payments, almost always, a
> business/nonprofit/estate or an individual may appear as the payor or
> payee.
>
>> Usually, I get good advice from this group, but this time, I'm thinking I'll
>> have to rely on my own understanding. Thanks to all that tried answering my
>> question.
>
> Hey! I'm the only one who gave the wrong answer. I thought a 9-digit
> string could be parsed to determine if it's an SSN or EIN, but it turns
> out that it cannot be. Everyone else in this thread gave decent answers.
>
The group has always helped. It's better than staying online waiting for an
answer from the IRS for up to an hour.

The IRS should use unique identifiers and they don't. I have used, without
correction from the Soc. Sec. office where forms that also use the 1096 are
sent to.

On the form 1099-NEC, before you get to numbered boxes, right under the
Payor's address are two boxes - one on the left called 'Payor's TIN' and the
second box to the right of that is the 'Recipient's TIN.

Last night, I applied for an Employer Identification Number (not my fault
the box on the 1099-NEC calls it an EIN) and I got a reply after completing
their questions.

They sent the notice 'CP 575 G (Rev. 7-2007);.' It contained the following:

'Date of this notice: 01-18-2024
Employer Identification Number:
XX-XXXXXXX (X's entered by me to obscure the EIN)
Form: SS-4
Number of this notice: CP 575 G'

Hope that helps somebody else. To get this EIN (TIN), I went to
https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

Thanks and didn't mean to cause any hurt feelings. I was having a rough day.
- Wilson
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