- How to read these documents
- 1. Penalties under IRC 6721 and 6722
- 2. Reasonable cause under IRC 6724
- 3. Backup withholding under IRC 3406
- 4. B notices and the CP2100
- 5. TIN solicitation and Form W-9 reliance
- 6. Who must file: IRC 6041 and the Form 1099-K rulings
- 7. Form 1042-S and withholding agents
- 8. Form 8300 and worker classification
- What the IRS has not said
- Questions people ask
How to read these documents
A written determination is “a ruling, determination letter, technical advice memorandum, or Chief Counsel advice” (IRC 6110(b)(1)(A)) that the IRS must open to public inspection, and the statute is explicit that “a written determination may not be used or cited as precedent” (IRC 6110(k)(3)). The program manager memoranda carry the same warning on the IRS index. So a determination is evidence of how the IRS reasons, not authority; the regulation and the court decisions on the penalty cases page are the authority. Used that way, three things make these documents valuable. First, most of them were written to the examiner, so they describe the test the examiner will apply. Second, several state rules that appear nowhere in a publication: that complying with a CP2100 does not cure the earlier period, that Forms 1096 and W-3 do not start the assessment period, that W-9 liability survives the retention period. Third, the letter rulings on platforms and settlement funds are the only guidance of any kind on who is a third party settlement organization.
Two cautions. Older documents quote the figures of their day: a $50 penalty, a $600 threshold, a 31 percent withholding rate. The year is given on every line below and the 2026 figures page has the current amounts. And a letter ruling is redacted and fact bound; rely on its stated reasoning, not its result.
1. Penalties under IRC 6721 and 6722
Three questions recur: how the intentional disregard penalty works, how the e-file mandate penalty is computed, and when the assessment period starts. Chief Counsel’s answers: there is one penalty per return and the IRS can move from the standard to the intentional disregard amount later by supplemental assessment (CCA 200127043); a knowing pattern of late filing is enough for intentional disregard (CCA 200941012), while a one-off miss on a Form 8300 is not (TAM 200501016); the paper-filing penalty reaches only the returns above the e-file threshold (CCA 201603031); and the three-year period runs from each information return actually filed, so “a Form 1096 or W-3 is not sufficient to begin the section 6501 assessment period” (PMTA-2013-04) and an unfiled return has no period at all (CCA 200142021).
| Determination | What the IRS concluded |
|---|---|
| CCA 200127043 Chief Counsel Advice, 2001 | Only one IRC 6721 penalty applies per return, so the (a) penalty and the (e) intentional disregard penalty cannot both be assessed for the same failure; but if intentional disregard is found after an (a) assessment, the IRS may supplement the assessment under IRC 6204(a) to the higher amount. |
| CCA 200941012 Chief Counsel Advice, 2009 | Intentional disregard means a knowing or willful failure; a history of late filing after the company was on notice of the requirement supports the higher penalty. |
| TAM 200501016 Technical advice memorandum, 2005 | A retailer that missed a Form 8300 on a series of cash purchases owed the IRC 6721(a) penalty but not the intentional disregard penalty; its employees were not separate recipients. |
| CCA 201603031 Chief Counsel Advice, 2016 | When a filer that must e-file intentionally files on paper, the penalty applies only to returns above the e-file threshold (then 250), and the percentage of aggregate amount alternative under IRC 6721(e) is computed on those excess returns; the Code and regulations are silent on the exact method, so Counsel describes a reasonable one. |
| PMTA-2013-04 Program manager technical advice, 2013 | The IRC 6721 assessment period is three years from the filing of each information return and never starts for a return that is not filed; Forms 1096 and W-3 are transmittals, not returns, and do not start it. The IRC 6722 period is unsettled. |
| PMTA-2008-02014 Program manager technical advice, 2008 | No limitations period applies to the IRC 6722 payee statement penalty, because no return is filed for a statement; the IRC 6721 penalty may always be assessed for errors involving TINs, surnames or money amounts, though assessing within three years avoids dispute. |
| CCA 200142021 Chief Counsel Advice, 2001 | Where no Forms 1099 were filed at all, the three-year period for the IRC 6721 penalty has not begun to run; the penalties are assessable without deficiency procedures. |
| CCA 201315017 Chief Counsel Advice, 2013 | Both penalties are imposed per return or per statement, so they are divisible: a filer may pay the penalty on one return and sue for a refund of that amount. |
All 28 on penalties in the finder
Related guides: how the IRS decides intentional disregard, the 1099 penalty statute of limitations, Notice 972CG.
2. Reasonable cause under IRC 6724
The IRS has said in writing what it accepts. A payee’s refusal to furnish a TIN after a proper request is reasonable cause (SCA 200101031: “The donee may demonstrate reasonable cause by showing that the failure was due to the donor’s refusal to provide the TIN.”). Following the specific solicitation rules is acting in a responsible manner (INFO 2001-0245, CCA 201313028). A payer that already solicited under a form’s own procedure can fall within an exception to the annual solicitation requirement (CCA 201234025). The employer letters (INFO 2000-0394, 2001-0144, 2001-0293) walk through the employee who will not give an SSN: file anyway, document the requests, and submit the written statement. And the limit: reliance on a payroll processor by itself is not reasonable cause (PMTA-2007-00013, applying Boyle).
| Determination | What the IRS concluded |
|---|---|
| CCA 201234025 Chief Counsel Advice, 2012 | A casino that solicited a patron’s TIN under the Form W-2G procedures fits an exception to the annual solicitation requirement, so it can show reasonable cause for an incorrect TIN without a further solicitation. |
| SCA 200101031 Service center advice, 2001 | Omitting a required TIN is a failure to file a correct return, but the filer shows reasonable cause by proving the payee refused to give the TIN after it was asked. |
| INFO 2001-0245 Information letter, 2001 | Banks penalized for incorrect TINs on savings bond interest returns are treated as acting in a responsible manner if they followed the TIN solicitation rules in Reg. 31.3406(b)(2)-3(c), and may request an IRC 6724 waiver. |
| CCA 201313028 Chief Counsel Advice, 2013 | A state transportation department must solicit TINs from condemnation payees but faces no penalty if it solicited in good faith under the regulations. |
| INFO 2000-0394 Information letter, 2000 | An employer whose new employee refuses to furnish an SSN must still solicit it, may be penalized for the Form W-2 lacking it, and gets the waiver by documenting proper solicitations. |
| INFO 2001-0144 Information letter, 2001 | An employee who refuses an SSN on religious grounds does not relieve the employer; the de minimis exception may apply and reasonable cause is available if the employer solicited the number as the regulations require. |
| INFO 2001-0293 Information letter, 2001 | The employer files the Form W-2 without the SSN, faces the per-return penalty (then $50), and obtains a waiver only through proper solicitations and a written reasonable cause statement signed under penalties of perjury. |
| PMTA-2007-00013 Program manager technical advice, 1995 | Under Boyle, reliance on a third party payroll processor by itself is not reasonable cause for a deposit penalty, however carefully the processor was chosen; the employer has reasonable cause only if the processor itself had what amounts to reasonable cause. |
All 13 on reasonable cause in the finder
Related guides: Treas. Reg. 301.6724-1, paragraph by paragraph, how the IRS judges a 972CG response, W-9 solicitation rules.
3. Backup withholding under IRC 3406
PMTA-2023-03 is the document every payer with a missing-TIN vendor should read: “the payor must backup withhold during the period during which the TIN has not been furnished in the manner required”, and complying with a later CP2100 does not change that. The rest of the group explains what follows. Because backup withholding is treated as wage withholding, a payor assessed for not withholding can reduce the amount with Forms 4669 and 4670 showing the payees reported the income (PMTA-2020-09). The IRS has authority to require the same EIN on the Form 945 and the Forms 1099 that report the withholding (PMTA-2019-10), which is the mismatch behind most unresolved Form 945 credits. And withholding is only ever required when a 3406(a) condition exists: “Generally we don’t have voluntary backup withholding.” (CCA 200940029).
| Determination | What the IRS concluded |
|---|---|
| PMTA-2023-03 Program manager technical advice, 2023 | Complying with a CP2100 or CP2100A does not cure the earlier period: under IRC 3406(a)(1)(A) the payor must backup withhold for the whole period the TIN was not furnished, whether or not it received or followed a notice. |
| PMTA-2020-09 Program manager technical advice, 2020 | Because IRC 3406(h)(10) treats backup withholding as wage withholding, a payor may seek IRC 3402(d) relief on Form 4670 with payee Forms 4669 showing the payees reported the income; that reduces the withholding collected but not the penalties. |
| PMTA-2019-10 Program manager technical advice, 2019 | The IRS already has authority under IRC 6011 and 6109 to require the same EIN on Form 945 and the Forms 1099 and W-2G that report the withholding. |
| CCA 200940029 Chief Counsel Advice, 2009 | There is no voluntary backup withholding: a condition under IRC 3406(a) must exist, so a payor that holds the payee’s TIN should not withhold. |
| TAM 199906037 Technical advice memorandum, 1999 | Payments to independent contractors were reportable payments, and because the payor never obtained their TINs it was liable for backup withholding under IRC 3406. |
| CCA 202252008 Chief Counsel Advice, 2022 | A government program paying interest to trust beneficiaries must report under IRC 6041 and backup withhold on payees with missing or incorrect TINs. |
| INFO 2000-0211 Information letter, 2000 | A payor may refund amounts withheld in error only before year end and before furnishing the Form 1099; after that the payee claims the credit on their return. Refunding is at the payor’s discretion. |
| PMTA-2007-00035 Program manager technical advice, 1995 | Backup withholding is a tax, not a penalty, so the policy against penalties on federal agencies does not apply; where the payee gave a TIN that is not obviously incorrect, withholding is not required unless another IRC 3406(a) condition exists. |
All 31 on backup withholding in the finder
Related guides: backup withholding, the 31.3406 regulations, Forms 4669 and 4670, the Form 945 compliance check.
4. B notices and the CP2100
The IRS has released little on the notices themselves; what exists is about what a notice does and does not do. A CP2100 does not erase the liability for the period before it (PMTA-2023-03). A Notice 972CG is a penalty notice, not a backup withholding notice, and does not by itself start B notice obligations (CCA 201246028 and its companion CCA 201248022). The timing of stopping withholding after a notified payee underreporting condition is cured follows the Code and the IRM together (CCA 200949039). PMTA-2007-00014, from 1995, records the legal basis for the TIN Matching program that lets a payor learn of a mismatch before filing rather than from a CP2100.
| Determination | What the IRS concluded |
|---|---|
| PMTA-2023-03 Program manager technical advice, 2023 | Following the CP2100 instructions does not affect the backup withholding liability that already existed for payments made while the TIN was missing (see the section above). |
| CCA 201246028 Chief Counsel Advice, 2012 | A Notice 972CG is a penalty notice, not a backup withholding notice: it does not by itself trigger B notice obligations. For slot winnings, backup withholding applies only where the TIN furnished does not have the proper number of digits. |
| CCA 201248022 Chief Counsel Advice, 2012 | Companion advice reaching the same conclusions for the casino’s obligations after the 972CG. |
| CCA 200949039 Chief Counsel Advice, 2009 | No conflict between IRC 3406(c) and the IRM: the Code sets the deadline by which the IRS must act to stop withholding after a notified payee underreporting condition is cured, and the 45-day rule applies only where there was no underreporting or where hardship exists. |
| INFO 2006-0006 Information letter, 2006 | The IRS declined to drop Form 1099-MISC reporting of medical payments because of TIN mismatches with hospitals and practice groups; the letter explains why mismatches arise and how payers should handle them. |
| PMTA-2007-00014 Program manager technical advice, 1995 | The origin of TIN Matching: IRC 3406(a)(1)(B) contemplates notice of incorrect TINs after filing, but IRC 3406(i) authorized the regulation that lets the IRS tell a payor before filing that a name and TIN do not match. |
All 6 on b notices and cp2100 in the finder
Related guides: CP2100 and the B notice, step by step, PMTA 2023-03 and CCA 200941012 in full, IRS TIN matching.
5. TIN solicitation and Form W-9 reliance
Three documents decide what a payer must be able to show. The IRS can assert backup withholding for missing W-9 certifications “even if the three-year period for retaining those forms has passed” (CCA 201037027): keep the W-9, or evidence of it, as long as the account is open. A successor that acquires accounts may rely on the predecessor’s records and procedures and is “required to obtain new Forms W-9 only if no Form W-9 was obtained” (PLR 201308024). A clearing broker may rely on an introducing broker’s notifications and on faxed W-9s (PLR 200107027). The rest confirm that a payor may ask for a TIN before paying (SCA 200040034), must ask (INFO 2000-0040), and how to handle a corporate vendor whose owner gave an SSN (INFO 2011-0095).
| Determination | What the IRS concluded |
|---|---|
| CCA 201037027 Chief Counsel Advice, 2010 | The IRS may assert backup withholding for missing Form W-9 certifications even after the three-year retention period has run; the period limits how long the forms must be kept, not the IRS’s ability to assert liability. The payor must show it obtained the certifications when required. |
| PLR 201308024 Private letter ruling, 2013 | A successor that acquired brokerage accounts may rely on the predecessor’s records and procedures to show Forms W-9 were obtained, need not resolicit unless no W-9 exists, and must be able to retrieve the forms for the retention period. |
| PLR 200107027 Private letter ruling, 2001 | A clearing broker may rely on an introducing broker’s notifications about Forms W-9 and TINs when accounts transfer in bulk, may rely on faxed or electronically transmitted W-9s, and using the TIN the broker furnished satisfies the initial solicitation rule. |
| SCA 200040034 Service center advice, 2000 | Nothing in the Code or regulations prevents a payor from requesting a payee’s EIN before it makes a reportable payment. |
| INFO 2000-0040 Information letter, 2000 | A bank must request a customer’s TIN: IRC 6109(a)(3) requires a person filing a return about another person to request that person’s TIN, and 6109(a)(2) requires the person to furnish it. |
| INFO 2011-0095 Information letter, 2011 | A C corporation vendor whose owner gave only her SSN on the W-9: corporations are generally exempt from backup withholding, but the name and TIN on the W-9 should be the corporation’s; the letter explains how to proceed. |
| PLR 200645008 Private letter ruling, 2006 | A settlement fund paying qualified plan participants may obtain their TINs from the plans, funds or transfer agents rather than soliciting the participants. |
| CCA 201221018 Chief Counsel Advice, 2012 | Interest on a decedent’s unclaimed funds is reported under the decedent’s name and SSN if it belongs on the final return, or the estate’s EIN if it is income of the estate. |
All 21 on tin solicitation and form w-9 in the finder
Related guides: W-9 solicitation rules, LLC and sole proprietor names on the W-9, vendor mergers and new EINs.
6. Who must file: IRC 6041 and the Form 1099-K rulings
The largest group in the set. The one most accounts payable teams need is CCA 201447025: payments to an LLC are “exempt from section 6041 reporting requirements only if the LLC has elected to be classified for federal tax purposes as a corporation” on Form 8832, so a W-9 that says LLC without a corporate election means a reportable payee. The others draw the lines around the payor (management and oversight, paying agents), the corporate exemption (incorporated veterinarians are still reportable), the freight exception, and rebates that are purchase price adjustments rather than income.
Payments, payors and exemptions under IRC 6041
| Determination | What the IRS concluded |
|---|---|
| CCA 201447025 Chief Counsel Advice, 2014 | Payments to an LLC are exempt from IRC 6041 reporting only if the LLC elected corporate classification on Form 8832; an LLC taxed as a partnership or disregarded entity is not an exempt recipient, so the payment is reportable and subject to the backup withholding rules. |
| CCA 201349013 Chief Counsel Advice, 2013 | Incorporated veterinarians provide medical and health care services, so the corporate exemption in Reg. 1.6041-3(p)(1) does not apply and payments of $600 or more (the threshold then) are reportable. |
| CCA 199919032 Chief Counsel Advice, 1999 | The freight exception covers both incidental freight and freight that is an integral part of the business, so neither is reportable. |
| PLR 200106032 Private letter ruling, 2001 | A funeral home paying clergy, florists and other providers as cash advances for families acts without management or oversight or economic interest, so it is not the payor and issues no Forms 1099. |
| CCA 199928029 Chief Counsel Advice, 1999 | An attorney paying clients’ medical bills out of settlement proceeds is the payor if he exercises management and oversight over the payments; if he is merely a paying agent, the client is. |
| PLR 202047002 Private letter ruling, 2020 | Cash rebates a referral company pays home buyers out of its fee are adjustments to the purchase price, not gross income, so no Forms 1099-MISC are required. |
| PLR 202509005 Private letter ruling, 2025 | Commission rebates an insurance agency pays customers are purchase price adjustments to the cost of insurance and are not reportable under IRC 6041. |
| INFO 2016-0026 Information letter, 2016 | California waiting time penalties paid to departing employees are not wages for services, so they go on Form 1099-MISC, not Form W-2. |
All 84 on who must file in the finder
The Form 1099-K series: who is a third party settlement organization
Ten letter rulings between 2012 and 2021 are the only IRS guidance on applying IRC 6050W to platforms. The pattern: a platform that collects from buyers and settles to sellers is a TPSO and “must report on Form 1099-K the gross amount of all payments from Taxpayer to a Seller, including fees deducted by Taxpayer” (PLR 201719009); a company that buys services and resells them is not a TPSO but still a Form 1099-MISC filer (PLR 201539025); a pharmacy benefit manager and a company paying providers on customers’ behalf were not TPSOs on their facts.
| Determination | What the IRS concluded |
|---|---|
| PLR 201719009 Private letter ruling, 2017 | A platform that collects buyer payments and remits consolidated payments to sellers is a TPSO; it reports on Form 1099-K the gross amount paid to each seller, including the fees it deducted. |
| PLR 201604003 Private letter ruling, 2016 | An online marketplace that connects providers and customers and processes payments has established a third party payment network and must report gross payments to each provider above the thresholds; it keeps primary reporting responsibility even when payments route through a third party. |
| PLR 201836008 Private letter ruling, 2018 | A mobile services platform is a TPSO; Counsel addresses how a single service paid for by several recipients is counted for the transaction threshold. |
| PLR 201907006 Private letter ruling, 2019 | A software provider settling payments through two platforms is a TPSO for both and files Forms 1099-K for customers above the thresholds, reporting gross amounts. |
| PLR 202112002 Private letter ruling, 2021 | A rental platform collecting rent from tenants for landlords is a TPSO and reports the rent on Form 1099-K; payments reportable under IRC 6050W are excepted from IRC 6041 reporting. |
| PLR 201539025 Private letter ruling, 2015 | A company that buys services from providers and resells them is not a TPSO, but its payments to providers are for services, so they are reportable under IRC 6041 on Form 1099-MISC and subject to backup withholding when a condition exists. |
| PLR 201201001 Private letter ruling, 2012 | A pharmacy benefit manager is not a TPSO on the contractual structure between plan sponsors, the PBM and pharmacies. |
| PLR 201219013 Private letter ruling, 2012 | A company paying providers on customers’ behalf had not established a third party payment network on the facts presented, so it had no IRC 6050W obligation. |
All 12 on form 1099-k in the finder
Related pages: Form 1099-K, do I need to send a 1099?, marketplaces and gig platforms.
7. Form 1042-S and withholding agents
The rule for TIN penalties on Form 1042-S is different from the Form 1099 rule, and the IRS has said so: penalties for invalid payee TINs “normally should not be asserted unless the withholding agent knew or should have known that the TINs” on the Form W-8BEN were wrong (CCA 201615012), and a Form 1042-S that reports what was actually withheld has no error on it (CCA 201503013). The sourcing and withholding rulings (PLR 200244017, CCA 202547016) show how the 30 percent rate attaches to U.S.-source services and winnings paid to foreign persons.
| Determination | What the IRS concluded |
|---|---|
| CCA 201615012 Chief Counsel Advice, 2016 | Penalties for invalid payee TINs on Forms 1042-S should not be asserted automatically; they generally apply only if the withholding agent knew or should have known the TIN on the Form W-8BEN was incorrect, and IRC 6721, not 6723, is the penalty for an incorrect TIN on a filed 1042-S. |
| CCA 201503013 Chief Counsel Advice, 2015 | No IRC 6721 or 6722 penalty where the withholding agent correctly reported the amounts actually withheld in box 7 of Form 1042-S: there was no error on the forms. |
| PLR 200244017 Private letter ruling, 2002 | A referral fee paid to a nonresident alien attorney is sourced where the services were performed; the U.S. portion is subject to 30 percent withholding and Form 1042-S reporting, the foreign portion is not. |
| CCA 202547016 Chief Counsel Advice, 2025 | Gambling winnings paid to a foreign person are subject to 30 percent withholding under IRC 1441 and reported on Forms 1042 and 1042-S regardless of the domestic Form W-2G thresholds. |
| PLR 200450003 Private letter ruling, 2004 | A global custodian may apply chapter 3 and backup withholding, and Form 1042-S or 1099 reporting, participant by participant in a pooled custody account; the pool is not a joint account and needs no Form W-8IMY. |
| CCA 200521031 Chief Counsel Advice, 2005 | A withholding agent in the IRC 1441 voluntary compliance program owes no interest to the extent later documentation shows no tax, or a lower tax, was due on the Form 1042 due date. |
| FSA 199905005 Field service advice, 1999 | Whether a withholding agent’s failure to file Forms 1042 and 1042-S and deposit was due to reasonable cause could not be decided on the record; Counsel lists the facts examiners must develop about the agent’s knowledge and reliance. |
| PMTA-2022-05 Program manager technical advice, 2022 | A paper filing by a filer required to e-file Form 1042 and other specified returns is treated as a failure to timely file, so the IRC 6651 and 6652 additions apply. |
All 10 on form 1042-s and withholding agents in the finder
Related guides: foreign vendors, the W-8 series and Form 1042-S, chapter 3 withholding for payers, Form 1042-S.
8. Form 8300 and worker classification
Form 8300 shares the IRC 6721 and 6724 penalty rules with the Form 1099, which is why its determinations matter to a penalty response: TAM 200501016 is the clearest IRS statement that a missed filing without more is not intentional disregard. The rest settle who files (“The agent is required to file Form 8300, regardless of the method used to transmit the funds to the principal.”, CCA 200840044) and what counts as cash and a related transaction.
Form 8300 under IRC 6050I
| Determination | What the IRS concluded |
|---|---|
| CCA 200840044 Chief Counsel Advice, 2008 | The agent that receives more than $10,000 in cash on behalf of a principal files Form 8300, whatever method it uses to pass the funds to the principal. |
| TAM 200501016 Technical advice memorandum, 2005 | Multiple items bought at once with a series of cash payments over $10,000 are a single transaction requiring Form 8300; the retailer owed the IRC 6721(a) penalty but not the intentional disregard penalty. |
| CCA 201044014 Chief Counsel Advice, 2010 | Transactions between the same payor and recipient within 24 hours are related, and cash installments on related transactions are aggregated and reported once they exceed $10,000 within 12 months. |
| PMTA-2010-012 Program manager technical advice, 2010 | A business that receives and cashes a check over $10,000 does not file Form 8300: a check is not cash. |
| CCA 201540013 Chief Counsel Advice, 2015 | Successive pawn loans on the same collateral are related transactions where the debt from one loan is shifted to the next. |
| PMTA-2014-13 Program manager technical advice, 2014 | Governmental units (the United States, states, political subdivisions and their integral parts) are exempt from Form 8300; instrumentalities of government are persons that must file. |
| PMTA-2018-11 Program manager technical advice, 2018 | The IRS may ask a non-filer to submit one Form 8300 summarizing multiple cash receipts from one customer in a prior year, with a note in the comments section explaining what it covers. |
All 21 on form 8300 in the finder
Worker classification, section 530 and IRC 3509
For a payer, the classification documents matter because a Form 1099 is the evidence of consistent treatment that section 530 requires (CCA 200038045), because the reduced IRC 3509 rates disappear with intentional disregard (“3509 doesn’t apply if intentionally disregard.”, CCA 200909056), and because backup withholding is the IRS’s fallback where a payer treated workers as contractors but never collected their TINs (CCA 201049027).
| Determination | What the IRS concluded |
|---|---|
| CCA 200038045 Chief Counsel Advice, 2000 | Corporate officers may qualify for section 530 relief and a filed Form 1099 can establish non-employee treatment; Counsel also addresses when an IRC 7436 notice is appropriate and the IRC 3509 rates. |
| CCA 200825043 Chief Counsel Advice, 2008 | An employer reclassifying workers after an IRS determination letter may use IRC 3509 rates for prior years and make interest-free adjustments, if it meets the IRC 3509 requirements. |
| CCA 200909056 Chief Counsel Advice, 2009 | IRC 3509 reduced rates are unavailable where the employer intentionally disregarded the requirement to withhold. |
| PMTA-2011-015 Program manager technical advice, 2011 | A taxpayer claiming a section 530 safe harbor must have actually and reasonably relied on it for the periods at issue, though reliance may have begun after the workers were first engaged. |
| PMTA-2018-15 Program manager technical advice, 2018 | An employment tax exam does not gross up a prior-year wage adjustment for the employee’s FICA and income tax withholding; the employer files and furnishes Forms W-2c for the audit year, and employer-paid employee FICA not collected is additional wages in the year paid. |
| PMTA-2009-035 Program manager technical advice, 2008 | Employment related judgments and settlements are worked in four steps: characterize the payment, decide if it is gross income, decide if it is wages, then report wages on Form W-2 and non-wage amounts and attorney fees on Form 1099. |
| CCA 201049027 Chief Counsel Advice, 2010 | The Tax Court has no IRC 7436 jurisdiction over backup withholding on workers found to be independent contractors, but a worker classification notice may still suspend the assessment period for backup withholding where Forms 945 were filed. |
| CCA 200224008 Chief Counsel Advice, 2002 | Compensation to professionals goes on Form W-2 or Form 1099-MISC according to worker status for each type of service; a worker can have dual status. |
All 16 on worker classification and section 530 in the finder
Related guides: Form 8300 for businesses that take cash, worker classification for payers, section 530 and late 1099s.
What the IRS has not said
Some searches returned nothing, which is itself useful to know. No released determination addresses the inconsequential error rules of Reg. 301.6721-1(c) directly. Only two documents are indexed under IRC 6724 itself; the reasonable cause analysis lives under 6721 and in the information letters. Nothing released under IRC 6050Y (reportable policy sales), 1471 to 1474 (FATCA), 6050X or 7434. The 25 determinations under IRC 6672 are all employment tax trust fund cases, none about backup withholding. No determination carries a deceased payee backup withholding subject; CCA 201221018 (decedent versus estate TIN) is the closest. Chief Counsel Notices are not in the written determinations index and are not covered.
Questions people ask
Can I attach a PMTA to my 972CG response?
Yes, and the examiner will read it, but say what it is: internal advice that is not precedent (IRC 6110(k)(3)). Its value is showing that the IRS itself has applied the rule the way you are asking it to. Lead with the regulation and your records; cite the determination in support.
Which of these is the most important for a vendor file with missing TINs?
PMTA-2023-03. It states the IRS position that backup withholding was due from the first payment to a payee without a TIN, and that a later CP2100 and B notice do not cure the earlier period. The second is CCA 201037027: you must be able to show the W-9 was obtained, however long ago.
Our W-9 says LLC. Do we report?
Unless the W-9 shows a corporate election (the LLC box with C or S), yes. CCA 201447025 says the exemption applies only to an LLC that elected corporate status on Form 8832; a partnership or disregarded LLC is a reportable payee and backup withholding rules apply.
Why are the 1099-K rulings all letter rulings and not Chief Counsel Advice?
Because platforms asked. A letter ruling is issued to the taxpayer that requests it, on its facts, and the marketplace and rental platforms that could not tell whether they were TPSOs requested rulings. Each binds the IRS only for that taxpayer, but together they describe the test the IRS applies.
Where are the court cases?
On the penalty cases page (thirty decisions and rulings with facts, holding and lesson) and in the case and ruling finder, which holds the court decisions alongside the IRS rulings that overlap this set.