Penalties for completing the W-9 form incorrectly

W-9 is a very important document and the independent contractor is fully responsible for filling the form accurately and submitting it without delay.

Penalty for incorrect W-9

So what happens if an independent contractor makes a typo while completing the document? The IRS checks all the data submitted by self-employed workers carefully. If some data you provide does not match your data (name, address, TIN, etc.) in the database, they will send a letter to your employer to notify about the unmatching details. For the first time, you will be asked to resubmit a new form. Next time you will have to pay $50 fine.


If you change name or address, you have to inform IRS about these changes by sending an unscheduled W-9, so they update your details in the IRS database.


Penalty for falsifying data in W-9

Falsifying information on this document will lead to unavoidable penalties. Sending false statements is treated as criminal behavior; it will lead to monetary fines (from $50).

If you fill the blank out with false data for two or more times, the IRS will regard it as a repeating data falsifications, so you will have to appear in court and, in the worst case, be imprisoned.

If you, as an independent contractor, are not exempt from the backup withholding, but file a false form to avoid backup withholding, for the first time you will be penalized and have to pay the amount of withholding and $500 of a fine. If you falsify this information again, you will be a subject to criminal penalty.

Penalty for not-obtaining W-9

If you decided not to complete the form or just forgot to do that in time, you will be subject to a monetary penalty (at least $50). Also, in such cases, your employer has right to withhold 28% of the total amount of your earnings and forward this money to the IRS, as a backup withholding.

Even if you did not get the bland from your work-giver, you still have to complete it and send to the company you work for. Downloadable forms are available through the IRS site.


How to avoid penalties

It’s very easy to avoid the penalties for not filling the W-9 form or completing it incorrectly. All you’ve got to do is to fill in your blank with accurate information (and double check all the data to make sure that everything is correct, no typos) and always send your form in time, i.e. before the fiscal year ends. For example, fiscal year 2018 ends on 09/30/18, so you have to submit your blank before this date.