Procedures to stop IRS Backup Withholding (BUW)

To: First Data Clients

From: Service Organization

Subject: Merchants Procedures to stop IRS Backup Withholding (BUW).

Summary

This alert outlines the process for receiving, reviewing, and approving Form W-9 and Form W-8 documentation in order to stop Federal and/or State backup withholding (BUW). Forms W-9 and W-8 may be received electronically through the Business Track website, by mail, or W-9 by fax (W8 fax is not considered a valid method to submit).

Background

Reportable payments under Section 6050W are subject to BUW under Section 3406,(1) if Payee/Merchant fails to provide a filer with a TIN; or (2) when a filer receives notification from the IRS that a merchant TIN/TFN is invalid, and the merchant fails to take certain corrective actions in a timely manner. BUW will be required.

Merchant Process to stop backup withholding(BUW)

If a merchant has received a “B” Notice, the merchant may submit documentation to turn off BUW via the following methods:

1) ELECTRONICALLY (preferred and most efficient processing)

U.S. Entity or U.S. Citizen or Resident may submit a completed Form W-9 electronically via Business Track. Click here to visit the Tax Validation website and click on the Tax Information Update link. To log in, you will need to enter the Communication ID off of your B Notice. Once you have logged in, you will be prompted to fill out and submit IRS Form W-9 Electronically. You will be able to specify a phone number or email address to receive a confirmation notice when the information is validated. While completing the electronic form, if you select the option “Not a U.S. person” you will be directed to an applicable Form W-8 which will need to be completed and submitted instead of the Form W-9. Allow 48 hours for processing the entered information.

2) FAX or Mail

U.S. Entity or U.S. Citizen or Resident may fax a W-9 form to the fax number below or mail to the address listed below. Please use the W-9 included with your B Notice for fastest processing. Include a cover sheet containing, MID, TFN and address for the account. Form W-9 is considered complete if the form is legible and contains:

* Tax Filing Name
* The appropriate federal tax classification box is marked on the form
* Social Security Number or Employer Identification Number (must be a 9 digit numeric, and must pass preliminary TIN edits)
* Address
* Signature and date

If the merchant does not have the original W-9 that accompanied the B Notice, they can use any Form W-9, however it needs to include the following information:

* TIMS Account number (20- digit number that includes the merchant id) or Omaha merchant account number.
* Tax Filing Name
* The appropriate federal tax classification box is marked on the form
* Social Security Number or Employer Identification Number (must be a 9 digit numeric, and must pass preliminary TIN edits)
* Address
* Signature and date

Merchants may fax to the following fax numbers:

* Allow 3-5 business days for indexing/status update for faxed documents.

Merchants who wish to mail in their documentation should be referred to the following address:

*Standard Mail: First Data, PO Box 6601, Hagerstown MD 21741-6601
*Overnight delivery: First Data, Attn: IDS Tax Dept., 3 Western Maryland Parkway, Hagerstown MD 21741
*Allow 7-10 days for indexing/status update for mailed documents

If, after the standard processing period for your W-9 submission method, the BUW flag on the merchant account is still a ‘Y’ and funds continue to be withheld, the ISO can contact IRSPhase1@firstdata.com.

If you have questions, please open a ticket via ServiceCenter Web or contact the Merchant Response Center at 1-800-337-1222 Option 3, Option 4 with any questions.