As businesses evolve, the need to comply with regulatory reporting accelerates. Compliance allows businesses to maintain good standing with the federal agencies, enabling them to function smoothly without hassles.
However, while a majority of the regulatory reporting and compliance protocols are followed strictly, there is one area that still has plenty of scope for improvement. And that is reporting accuracy –more specifically, TIN Matching.
It’s true that the IRS issues B notices, such as the CP2100 CP2100A to thousands of businesses every year. Something as simple as a TIN mismatch can quickly drain out the savings of a small business because the penalty repercussions of a TIN discrepancy with the IRS will cost the business a whopping $250 penalty for every incorrect TIN reported.
Sure, $250 is not much. But for a business that reports 100 TINs in a tax year, the penalty figures to $250 x 100 TINs = $25,000 (just penalties). And this number goes further up when the interest is assessed every month until the notices are addressed by the filer properly.
This is the cost of a simple TIN discrepancy for a small or mid-size firm. The sum of penalty will double or may even triple as businesses onboard more vendors. The more vendors you hire, the more you compensate them, resulting in more TIN reports.
Sure, not all TINs are going to be wrong. You could get the right TIN information from your contractors through W-9 forms.
But how are you sure that these TINs are correct? That these TINs are in accordance with the IRS records? That these TINs are accurate and will not result in TIN discrepancies with the IRS?
The only way you can guarantee such masterful accuracy of TINs is through IRS TIN Matching. But what exactly does TIN matching mean in the tech-savvy era of 2022?
When you obtain the TIN and legal name of your independent contractor through a W-9 form, you will want to validate the information to ensure that the vendor has, indeed, provided the correct information to you (per the official IRS records).
When you check the TIN and legal name of the vendor against the IRS records, the search queries will return with a TIN Match or a TIN Mismatch report.
TIN Match is when the TIN/legal name combination provided by your vendor matches the records of the IRS.
In a nutshell, when the TIN matches the IRS records, it’s a TIN Match. And if the information doesn’t match, it’s a mismatch or incorrect.
Real-time = as it‘s happening right now.
The IRS tends to update its records and databases with the latest TIN/name records from time to time as submitted by the taxpayers.
So, when you search for the TIN/name records against the IRS database, you will want the most recent, or rather, the latest results to check and validate the information. This is real-time TIN Matching.
Let’s say that one of your vendors unintentionally provides their older TIN and legal name instead of their renewed details and you match it against the previous IRS database records. The TIN information will match the older records, but the results are not current and the IRS will reject the returns for incorrect TIN reports. This is because the IRS has the latest, renewed TIN and legal name of your vendor and will not accept historic information.
Real-time TIN Matching will help you match the vendor TINs against the real-time IRS records, giving you real-time TIN match results – giving you the much-needed accuracy.
When you have Compliancely by your side, you have a powerhouse of real-time identity checks to help you gain insights into the real identities of businesses.
Real-time identity checks, such as real-time IRS TIN Matching from Compliancely enable you to check the vendor TIN and legal name against the real-time records of the IRS.
And we are not connected with an unknown third party. We’re connected with the source – the IRS. This way, you get the most accurate TIN match results, helping you report vendor TINs confidently.
Compliancely is trusted by thousands of businesses across a variety of industries. This means we understand the identity validation requirements of a variety of verticals.
Rely on our TIN Matching API to identify, validate, and verify the identities of businesses and professionals in a few quick steps and let us take it from there.