Updated: January 25, 2023
Vendor Teams typically know to require the IRS Form W-9 (W-) at new vendor setup. Once collected, the Vendor Legal Name and Tax ID are verified against IRS records, and the address on the form is recorded as the tax address (in some Accounting Systems or ERPs) where the applicable 1099 will be sent (if reportable). The W-9 should be retained as support for the information collected at the time of setup for your company requirements and for any future IRS audit.
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Does the IRS Form W-9 Expire?
The short answer is no. Unlike the IRS instructions on the expiration of the IRS W-8 forms (December 31st of the 3rd year), there is no verbiage in the W-9 Instructions that indicate that the form expires.
Confusion can also from the recent frequent revisions of the IRS Form W-9. Just in the 2010s, there were 5 revisions which left some Vendor Teams wondering if they needed to collect the newly revised W-9 from their existing vendors. In reality, when new forms were released, the IRS provided a buffer period where those forms were not required to be collected from vendors (when collection was necessary), and there was no requirement to proactively require them for existing vendors. After the grace period, any scenario that required the collection of a W-9, the most recent version of the form was required. This was to ensure that changes to certifications, exemption codes, and FATCA reporting codes were captured. The December 2014 form, for example, added the 4th certification for FATCA codes. At least for this revision, Vendor teams could use this certification as a concrete reason for requiring that new version.
So, the long answer to the expiration question is that older versions of the W-9 should not be used after the grace period. The latest version of the form is October 2018 and that is the version your Vendor Team should require from your vendors.
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When You Should Collect a New IRS Form W-9
When the original IRS Form W-9 is collected and the vendor certifies (signs), the onus is on the vendor to submit a new IRS Form W-9 if their information changes. However, if the Vendor team, Procurement or the internal employee that has the relationship with the vendor becomes aware of any changes – be proactive to update the vendors information. Here are some scenarios that may be a signal you need to collect a new IRS Form W-9:
Changes to Vendor Legal Name – This can come about after receiving a notice from the vendor or having errors or issues when trying to post invoices if the vendor record legal name does not match the invoice.
Changes to Vendor Tax ID – Vendors may send a notice information your company of the change or it may be a result of the Vendor team revalidating the data during a Vendor Master File clean-up.
Changes to Vendor Tax Address – If your mailed 1099’s or 1042’s are returned undeliverable. This could mean the tax address has changed.
IRS CP2100 Notice Is Received – The IRS sends out CP2100 and 2100A Notices in October and the following April to let companies know they may need to backup withhold from vendors where TINs are missing from IRS records or have incorrect name/TIN combinations.
Unreported changes can expose your company to IRS penalties and fines, so it’s best to be proactive and keep your vendor master file clean. To learn best practices when updating those changes in the Vendor Master File – see a related blog post “Vendor Master File: When an Existing US Based Vendor Changes Their Legal Name or Tax ID or Both”.
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Debra R Richardson, MBA, APM, APPM, CPRS is an accounts payable speaker, consultant, and trainer with over 20 years of experience in AP, AR, general ledger, and financial reporting for Fortune 500 companies including Verizon, General Motors, and Aramark.
Debra has experience with Global Vendor Maintenance activities and implemented a vendor self-registration portal for 140k+ global vendors across five Accounting Systems/ERPs. In her consultancy, she focuses on internal controls and authentication to prevent fraud in the vendor master file. Reach out via email: debra@debrarrichardson.com.
Vendor Process
Debra R Richardson
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