February 1, 1992

          February is known for birthdays of Presidents, Valentine`s Day and for issuing Form 1099s to independent contractors. A Form 1099 is issued to all non incorporated taxpayers who rendered business services to other businesses and are paid $600 or more in one calendar year. Form 1099 was described in the prior letter and is the form issued to the provider of the services by the payor. The Form 1099 includes on it the payee`s name, address, taxpayer identification number, and amount paid. Failure for the payor to provide a correct taxpayer identification number (TIN) results in a $50 penalty per each Form 1099 with a $50,000 maximum penalty.

          In order to obtain the information for the Form 1099s (whether or not you or we are preparing the 1099s) the Form W-9, Request for Taxpayer Identification Number is the official vehicle to give to the payee to have filled out. One advantage of having a signed W-9 is that if the TIN is incorrect, the $50 penalty will be transferred to the payee from the payor. We advise the Form W-9 be sent out as soon as possible and recommend that before that payment is made which reaches the $600 mark, a signed W-9 is obtained.

          Remember, the deadline to send out Form 1099s is February 28. We enclose a copy of a blank Form W-9 for your convenience.