What is TIN Matching?

TIN Matching is a service the Internal Revenue Service (IRS) provides that allows payers and authorized agents to verify the accuracy of Taxpayer Identification Numbers (TINs) and names provided on 1099 forms. This service helps ensure that the information submitted to the IRS matches the agency's records, reducing the risk of mistakes and potential penalties for incorrect TINs. Individuals and businesses can also use third-party services to help streamline TIN matching for their use cases.

What's the TL;DR?

TIN Matching is a critical service that helps taxpayers verify the accuracy of TINs and corresponding payee names before submitting information returns. By reducing errors, ensuring compliance, and preventing penalties, TIN Matching provides significant benefits for businesses and other entities. Effectively using the TIN Matching service, including the interactive and bulk options, and following best practices can help payers maintain accurate records, streamline their tax reporting processes, and avoid costly mistakes.

  • Needed for Compliance Purposes: Ensures accuracy of TINs on 1099 forms and other tax documents to reduce any potential delays or errors that could result in lengthened and penalized tax submissions, B-Notices, and backup withholding.
  • Eligibility: Available to payers and authorized agents who submit 1099 forms.
  • Online Access: Available through the IRS e-Services platform, individuals will first apply to participate in the complimentary program. Once approved, they will have access to the TIN Matching submission portal. This portal supports both individual and bulk TIN matching requests, making it ideal for businesses with many contractors or employees.
  • Simplified Tax Reporting: Streamlines the preparation and submission of accurate tax information, saving businesses money and time. Since the program began, thousands of businesses' tax compliance has improved.

Tell Me More

TIN Matching is a crucial process for businesses and entities that submit information returns to the IRS. These returns, such as Forms 1099 and W-2, require accurate TINs and corresponding payee name reporting. Errors in these returns can lead to penalties, backup withholding, and B-Notices (notifications from the IRS indicating mismatched TINs).

By using the TIN Matching service, payers can verify the accuracy of TIN and name combinations before submitting their information returns. This proactive step helps ensure compliance with IRS regulations and reduces the likelihood of receiving error notices and incurring penalties.

How TIN Matching Works

TIN Matching is available to payers who must file Forms 1099-B, 1099-DIV, 1099-INT, 1099-K, 1099-MISC, 1099-OID, and 1099-PATR. To use the service, payers must be authorized users of the IRS e-Services portal.

There are two primary methods for TIN Matching:

  • Interactive TIN Matching: This option allows users to simultaneously enter up to 25 TIN/name combinations and receive immediate results. It is ideal for verifying TINs on an as-needed basis or for small volumes of TINs.
  • Bulk TIN Matching: This option allows users to upload a file containing up to 100,000 TIN/name combinations. The IRS processes the file and returns the results within 24 hours. Bulk TIN Matching is suitable for large volumes of TINs that must be verified simultaneously.

Benefits of TIN Matching

  • Accuracy: Ensures that the TIN and name combinations submitted on 1099 forms are correct.
  • Compliance: Helps businesses comply with IRS regulations and avoid filing errors.
  • Penalty Reduction: Decreases the likelihood of receiving penalties for incorrect TINs, which can result from mismatched or invalid TINs, before they become problems, maintaining smoother operations.
  • Efficient Processing: Streamlines preparing and submitting accurate information returns, especially for payers with large volumes of data.

Using the IRS e-Services Portal

Payers must register for the IRS e-Services portal to access the TIN Matching service.

Steps to Access TIN Matching:

  1. Registration: Payers must first register for an IRS e-Services account. This includes providing personal information and verifying identity.
  2. Authorization: After registration, the payer must apply for approval to use the TIN Matching service. This includes submitting Form 8655 (Reporting Agent Authorization) and potentially other documentation to the IRS.
  3. Access: Once authorized, users can log in to the e-Services portal and navigate to the TIN Matching application.

Steps for Interactive TIN Matching:

  1. Login: Login to the IRS e-Services portal.
  2. Navigate: Navigate to the TIN Matching application.
  3. Enter Data: Enter up to 25 TIN/name combinations.
  4. Submit: Submit the data for verification.
  5. Receive Results: Receive immediate feedback on the accuracy of the TIN/name combinations.

Steps for Bulk TIN Matching:

  1. Prepare File: Prepare a file containing up to 100,000 TIN/name combinations in the required format. It must be a .txt file with the following information:
    1. TIN Type; TIN Number; Name; Account Number (optional)
      1. TIN Type will be a one-digit number, where "1" represents an Employer Identification Number (EIN), "2" represents a Social Security Number (SSN), and "3" represents an unknown TIN type. Only choose one of these options.
      2. TIN Number will be the 9-digit SSN or EIN for the taxpayer.
      3. Name is the taxpayer's full name or business name. Omit any special characters in the business name except hyphens (-) and ampersands (&).
      4. Account Number is an optional field containing payor-provided information such as a bank account number.
  2. Login: Login to the IRS e-Services portal.
  3. Upload File: Navigate to the TIN Matching application and upload the file.
  4. Submit: Submit the file for processing.
  5. Receive Results: You will receive the results file, typically within 24 hours, indicating which TIN/name combinations are accurate and which are not.

Common Issues and Solutions

  • Mismatch Errors: If a TIN/name combination does not match IRS records, the TIN Matching results will indicate a mismatch. Users should verify the information and make any necessary corrections before resubmitting.
  • Technical Issues: Problems with file formatting or uploading can occur during Bulk TIN Matching. Users should ensure their files meet IRS specifications and seek assistance from the IRS e-Services help desk if needed.
  • Authorization Delays: Obtaining authorization to use TIN Matching can take time, especially if additional documentation is required. Users should start the process well before filing deadlines to avoid delays.

TIN Matching Best Practices

  • Verify Early: Perform TIN Matching well before filing deadlines to allow time to resolve any issues.
  • Maintain Records: Keep detailed records of TIN Matching results and any corrective actions taken. This documentation can be helpful in the event of any IRS inquiry.
  • Regular Updates: Regularly update and verify TIN information for payees to ensure ongoing accuracy and compliance.
  • Educate Staff: Ensure that staff responsible for TIN Matching are well-trained and familiar with the process and requirements.
  • Use Accurate Data: Double-check the accuracy of TIN/name combinations before submitting them for verification to reduce mismatches.

Examples of TIN Matching Use

  • A payroll service provider uses TIN Matching to verify employee TINs before submitting W-2 forms to the IRS.
  • A financial institution verifies TINs for all account holders who receive interest income reported on 1099-INT forms.
  • A business owner uses TIN Matching to correct contractor TINs before issuing 1099-MISC forms.

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