Episode 26: Latest W-9 Draft -- IRS Reverses Course on Sole Proprietor EIN Rule

The IRS has released a new draft of Form W-9—and this one brings welcome relief for accounts payable teams.In this episode, Jason breaks down the May 4 draft update and explains why the IRS’s decision to remove the proposed restriction on sole proprietors using EINs is a big deal. That controversial change would have created a massive compliance burden, forcing companies to re-solicit W-9s and revalidate vendor records at scale. For now, that headache is off the table.Jason also walks through what did change in the draft, including: A new backup withholding exemption code tied to broker and Form 1099-DA reporting  Updated (and much clearer) language around TIN reporting—specifically reinforcing that disregarded entity EINs should not be used Even though the EIN restriction is gone, the IRS is making its expectations more explicit—and that has real implications for how W-9s are completed and reviewed.As always, this is still a draft. Jason closes with practical guidance on what AP professionals should be doing right now (hint: keep using the March 2024 version).If you deal with W-9s, vendor onboarding, or 1099 compliance, this is a must-listen update.