Each fall, the Internal Revenue Service (IRS) sends Duke University (Duke) a notice and list of Forms 1099 filed for the previous calendar year for which the payee name and/or Taxpayer Identification Number (TIN) reported does not match IRS records. Duke is required to attempt to correct the missing or incorrect payee information. In early November, the Corporate Tax department will prepare and mail letters (called a “B” Notice) to the recipient of each incorrect Form 1099 reported for calendar year 2006 with instructions for correcting the mismatched information. Unless a response is received by Corporate Tax within 30 days of the date of the letter, Duke is required by law to begin backup withholding at the rate of 28% of all reportable payments to the payee. Please contact Julie Easter in the Corporate Tax department with any questions concerning this process at 668-0835 or by email at julie.easter@duke.edu . The following are some of the more frequently asked questions regarding this process. Please direct the payee to contact the Corporate Tax department with any questions not answered below. Q1. My customer/vendor received a letter with an IRS Form W-9. What should they do with this? A1. The payee should complete the Form W-9, Request for Taxpayer Identification Number, and send it to the Corporate Tax department at Box 104132 , Durham , NC 27708 . Q2. My customer/vendor received a letter that stated a Form W-9 is not acceptable documentation. Why is it not acceptable? A2. This payee has received previous notices for which we have received no response, or the response received in a prior year is still generating a payee name and/or TIN mismatch. The IRS requires that in such case, the payer (Duke) cannot accept a Form W-9 as certification of the payee's name/TIN. Ask the payee to follow the instructions in the letter to correct the mismatched information. Q3. My customer/vendor had tax withheld from a check requested by my department. What should I do? A3. Ask the payee to contact the Corporate Tax department at 668-0835 for an explanation of the reason for the tax withheld and instructions on how to stop the withholding. Do not submit a check request for the amount withheld. Q4. My customer/vendor says they responded to the letter with a Form W-9 but tax is still being withheld from their payments? A4. The Form W-9 may not have been sent to the Corporate Tax department and therefore, the backup withholding was not stopped. Also, this may not be the first year a notice was sent to the vendor. A Form W-9 is not acceptable to stop backup withholding for recipients of previous notices. Ask the payee to contact the Corporate Tax department at 668-0835 for further instructions. Q5. Can the payee be refunded the tax withheld if they provide the required documentation? A5. The IRS allows a payer to refund tax only if withheld in error and during the same calendar year the erroneous withholding occurred. Q6. Can a vendor claim he or she is exempt from backup withholding? A6. Yes. Payees who may be exempt from backup withholding include tax-exempt organizations, government agencies, and corporations. The vendor must provide a Form W-9 to the Corporate Tax department, certifying they are exempt from backup withholding. Q7. What happens if a payee refuses or neglects to provide a TIN? A7. Duke will begin backup withholding immediately on any reportable payments. The backup withholding will continue until the payee provides the proper certification of their TIN. Q8. What if we no longer do business with a payee who received a notice? A8. If the payee does not respond to the notice, we will mark the vendor record for backup withholding in case there are future payments made to the vendor. Other Duke departments may be doing business with and making payments to the vendor. Q9. Is a payee who is a nonresident alien subject to backup withholding? 9. Yes. A nonresident alien will be subject to backup withholding until we receive a signed Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, for him or her
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