IRS TIN Matching: How to avoid year-end errors, penalties

As year-end inches closer, there’s one surefire way CFOs can guarantee more accuracy for information returns: IRS’s TIN Matching tool.

Sure, your finance staffers have heard about this verification tool. But are they actually using it – and using it to its fullest potential?

Whether your staff’s forgone TIN Matching in the past or has been dutifully using the system for years, a quick review of the finer points can help all of your staffers become experts for this year-end.

As a result, you can have increased confidence that information returns are accurate for year-end reporting – and that you won’t see as many troublesome backup withholding or penalty notices afterward.

3 keys for accuracy

Here are three best practices to share with your finance staff for using the TIN Matching program:

1. Register early. Often, the biggest setback for TIN matching is the lead time it takes to get registered and ready to go. So, it’s a good idea for your finance staff to be proactive and get the registration process rolling as early as possible to avoid delays later.

Of course, you know workdays can get busy and tasks can get pushed off. So, along with speaking to your staff soon, you may want to put a reminder on your calendar a few weeks out to check in and see that they followed through on your advice.  

2. Review the right publication. Next, encourage your staffers to take time to look over Publication 1281: Backup Withholding for Missing and Incorrect Name/TIN(s). It’s filled with FAQs, how-to instructions for TIN matching and detailed directions for handling TIN errors.

3. Pick the right process. Remind your staff that IRS offers two different methods for TIN matching:

• Interactive match accepts up to 25 TINs and provides immediate results.
• Bulk match accepts up to 100,000 TINs (uploaded as a txt file) and sends you the results within 24 hours.

Have your staffers discuss and decide which method would be more efficient based on the time they have, the staff they have and number of TINs they need to check.

Need more information?

Premier Learning Solutions is offering a workshop, TIN Verification and B Notices: How to Avoid Costly Mistakes and Penalties, available on-demand.

Some of the topics it covers include:

• Guidelines for accurately registering with and leveraging IRS’s TIN Matching system
• Critical protocols for handling and responding to B Notices
• How your company can prevent costly mistakes and avoid fines from IRS
• The difference between first and second B Notices and their required responses

The speaker is Miles Hutchinson, a CGMA and experienced businessman who has served as an auditor with PriceWaterhouseCoopers and the Chief Financial Officer of a $1 billion real estate development company. He has presented over 2,500 seminars and training sessions on a myriad of business and financial topics, including tax, regulatory compliance, financial analysis and financial modeling, accounting matters, strategic planning and compliance with the Sarbanes-Oxley Act.

Click here for registration and more information.