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Are W-9s required for all loan customers?

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Are we required to obtain a W-9 on our loan customers. Our data processing company issues a TIN missing or not certified exception on a number of our loan customers. I'm unclear on how to deal with these exceptions.

Only loans to individuals which are secured by real estate are subject to information reporting on IRS Form 1098. However, the SSN need not be certified. (The IRS takes this approach becasue it is in the taxpayer's best interest to provide the correct SSN here - the 1098 is often used in support of a tax deduction.)

If you are notified by the IRS that you are reporting on an incorrect name/SSN combination; i.e. you receive a "B Notice," then you are required to obtain a certified TIN using a W-9 or an equivalent form. You must make annual requests until you receive one.

A preferred, but not required, practice is to obtain a W-9 at the time any loan subject to 1098 reporting is made.

First published on 5/20/02

First published on 05/20/2002

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