Why solicitation matters
IRC 6724 waives information-return penalties for failures "due to reasonable cause and not to willful neglect." For missing and incorrect TINs, Treasury Regulation 301.6724-1 defines reasonable cause almost mechanically: the payee's failure to give you a correct TIN is an event beyond your control, if you acted in a responsible manner, and acting in a responsible manner means making the required solicitations on the required schedule. Miss a solicitation and the waiver is gone for that payee, regardless of how good your intentions were.
That makes the solicitation log the most valuable document in TIN compliance. It's also the one most organizations don't have, because W-9 requests go out as individual emails from whoever set up the vendor.
What counts as a solicitation
A solicitation is a request to the payee to provide a correct TIN. It can be made by mail, by telephone (if you document the call), in person, or electronically. It must tell the payee that a TIN is required and, for a written request, is usually a Form W-9 or a substitute containing the same certifications. The IRS does not require a specific form for the request itself; it requires that the request was made and that the payee had a way to respond.
Schedule for missing TINs
When a payee never gave you a TIN, the regulation requires up to three solicitations, and each has a deadline.
| Solicitation | When | Notes |
|---|---|---|
| Initial | When the account is opened or the relationship begins, before the first payment. | The W-9 request in vendor onboarding. If the payee gives a TIN here, you're done unless it later proves incorrect. |
| First annual | By December 31 of the year the account was opened. If opened in December, by January 31 of the next year. | Required only if the TIN is still missing. |
| Second annual | By December 31 of the following year. | Required only if still missing. After this, no further solicitations are required to preserve reasonable cause, but backup withholding applies to every payment. |
The gap that costs $340. A vendor set up in March without a W-9, paid all year, and reported in January with a blank TIN has had one solicitation (initial) when two were required (initial plus first annual by December 31). The penalty stands. The fix is a December sweep of every active vendor with no TIN on file.
Separately from the penalty rules, a payee who has not furnished a TIN is subject to backup withholding at 24% from the first payment. See the backup withholding guide.
Schedule for incorrect TINs
An incorrect TIN is one the IRS tells you doesn't match, on a CP2100 or CP2100A. You don't have to solicit in anticipation; the obligation starts with the notice.
- The initial solicitation is the W-9 you obtained at onboarding.
- The first annual solicitation is the First B-Notice sent within 15 business days of the first CP2100 listing the account.
- The second annual solicitation is the Second B-Notice sent within 15 business days of a second CP2100 for the same account within three calendar years.
Those two B-Notices satisfy the annual solicitation requirement for incorrect TINs; you don't also need a December sweep for them. The CP2100 guide covers the mechanics and the templates page has the letters.
What a W-9 has to contain
Whether you use the IRS form or a substitute (a form embedded in your vendor portal, for example), a valid W-9 collects the payee's name as shown on their tax return, business name if different, federal tax classification, address, TIN, and the certification under penalties of perjury that the TIN is correct, that the payee is not subject to backup withholding (or is, if the IRS has notified them), and that they are a U.S. person. It must be signed and dated. A substitute form must contain the same certifications in substantially the same language, and must not include unrelated certifications that could be read as a condition of payment.
The IRS revised the W-9 in March 2024 to add line 3b, a checkbox for partnerships, trusts and estates that have foreign partners, owners or beneficiaries, which affects whether you'll need to file Schedule K-2/K-3 or Form 1042-S for them. Older forms on file remain valid; new solicitations should use the current revision.
Electronic W-9s and e-signatures
The IRS permits electronic W-9s as long as the system ensures the information received is the information the payee sent, documents all occasions of user access that result in a submission, makes it reasonably certain the person accessing the system and submitting the form is the person named on it, provides the same information as the paper form, and includes an electronic signature under penalties of perjury. In practice that means a login or unique link, a captured IP/timestamp, the full certification text displayed, and a signature action the payee takes deliberately. An emailed PDF with a typed name meets the spirit if you keep the email; a proper portal meets the letter and produces the log for you.
The records that prove it
For each payee, keep: the date and method of every solicitation; a copy of the request (or the template plus a log entry); the response and the date received; the TIN match result and date; and, for accounts on a CP2100, the notice, the B-Notice mailed, the mailing date, and the withholding start and stop dates. Retain for at least four years after the due date of the related return, and for CP2100 accounts at least three years after the first notice to apply the second-notice rule.
A spreadsheet works for fifty vendors. Beyond that, a system that timestamps the request, the reminder and the response is the difference between a waiver and a check.
Questions people ask
Do I need a new W-9 every year?
No. A W-9 remains valid until the payee's information changes. Re-solicit when a vendor's name, entity type or TIN changes, when a CP2100 lists the account, or when the W-9 on file predates a name change you know about.
Can I refuse to pay a vendor without a W-9?
You can make a W-9 a condition of onboarding; many organizations do. If you pay anyway, you must backup withhold 24% and still complete the solicitation schedule to preserve reasonable cause on the eventual missing-TIN return.
Does a TIN match count as a solicitation?
No. Matching verifies; soliciting asks. Both matter, but only the solicitation schedule is written into the reasonable-cause regulation.
What if the vendor is an individual who refuses to give an SSN?
Document the refusal (it counts as a solicitation if you asked properly), backup withhold, and file the return with the TIN blank. Reasonable cause protects you from the penalty; the withholding protects you from IRC 3406 liability.