Complete Guide to TIN Verification


Verifying taxpayer identification numbers (TINs) is a critical part of complying with tax regulations. In this guide, we’ll explore the WHAT, WHEN, WHY, HOW and WHO of TIN verifications. This includes the different types of TINs, importance of TIN verification, process(es) for verifying TINs, common pitfalls and best practices.

By the end of this document, you’ll understand the difference between a manual and automatic TIN verification process, and hopefully, have some ideas as to which is best for your team.

WHAT - Types of TINs 

There are several types of TINs, including:

  • Social Security Number (SSN) - used for individuals
  • Employer Identification Number (EIN) - used for businesses
  • Individual Taxpayer Identification Number (ITIN) - used for nonresident aliens and certain resident aliens

The important thing to note is that each TIN is tied to a registered, approved entity - regardless of whether that entity is a person or a business. Ensuring that the TIN and the associated name are linked in the IRS database is an important element of the TIN verification process.

WHY - TIN Verification is Important 

Verifying TINs is important for several reasons, including:

  • Ensuring compliance with tax regulations
  • Preventing identity theft and fraud
  • Avoiding penalties and additional compliance for incorrect TINs

Businesses inherently understand why it’s important to remain tax compliant, but not all businesses are aware of the benefits of TIN verification, an optional, but highly recommended element of risk management and cost avoidance (which will be explained more in the below section on Common TIN Verification Mistakes & How to Avoid Them).

HOW - Steps for Verifying TINs

There are many different processes currently used to verify TINs. What is best for your business will depend on many factors, including but not limited to: industry, scale of TIN verifications, data handling requirements, team size and technical ability, budget, and time requirements.  

Manual TIN verification:

  1. Obtain the TIN from the individual or business
  2. Use the IRS TIN matching program to verify the TIN - This service allows authorized users to verify up to 25 TIN and name combinations with the IRS records at one time. (Visit IRS e-services account for more information or to get setup.)
  3. Compare the name and TIN on the W-9 form to the IRS records
  4. Contact the individual or business to verify the TIN if there are any discrepancies

Automated TIN verification:

  1. Select a TIN verification service provider that offers an API or direct integration with your existing tech stack, preferably one that has a drop in component for W-9 capture 
  2. The TIN verification service provider will already have a connection with the IRS TIN matching program, so you will only need to integrate with the provider
  3. Once integrated, businesses may opt to include a W-9 capture field on their website that will immediately process user-entered W-9 information (including TIN and Name combination) OR to integrate directly with their general ledger to feed TIN/Name combinations directly from their data platform into the TIN verification process
  4. A W-9 capture field will prompt immediately for correction of unmatched TIN/Name combinations with IRS records

WHEN - Finding the Balance

While each company must ultimately determine when to perform TIN verifications based on the unique needs of their business, we have found that the most conservative approach is to verify TINs at the time of contractor, supplier or user onboarding. This serves to verify the identity of your future partner and ensure that you have the correct information to pay them appropriately. It also prevents the need to collect the information later on, making for a smoother tax season 😉 

That said, there is a cost to TIN verification whether it’s internal time and resources, or budget for a TIN verification service. Many large companies (especially those in the contract management or marketplace spaces) have found that the upfront cost of TIN verifications is more than offset by the avoidance of fines and additional compliance burden (due to incorrect or incomplete tax payer information) at the time of tax filing. However, knowing that not all users that register will meet the minimum thresholds for 1099 filing (1099-NEC, 1099-K, 1099-MISC, 1099-INT, etc) some large companies, such as banks, prefer only to validate those users that meet minimum thresholds requiring the issuance of a 1099 tax form. 

Take a look at the common TIN verification mistakes below to help determine if and when you should be performing your TIN verifications.

Common TIN Verification Mistakes & How to Avoid Them

The following are common mistakes businesses make when verifying TINs and related impact:

Using an incorrect TIN format

Tax form submissions with incorrect, missing or wrongly formatted TINs (or TIN/Name combinations) may result in penalties to the business and delayed tax returns for contractors, suppliers or users. Specifically, 

  • Up to $280 per form for incorrect information (i.e. TIN or name)
  • $60 - $270 for failure to file correct forms, depending on degree of tardiness
  • $570 or 10% of income reported on submitted form (no maximum) for intentional disregard of 1099-NEC or 1099-MISC requirement

You can avoid incorrect TIN verifications by adopting the following practices within your tax filing process:

  1. Double check all the TINs you provide on your tax forms and supplemental IRS documents to ensure the format is correct / the data is clean
  2. Correct any known errors immediately following the IRS’s correction procedures; utilizing a tax professional as needed
  3. Verify all TINs prior to tax form submission through the IRS TIN Matching Program (self serve for businesses and bulk verifications), the IRS Business and Specialty Tax Line (geared toward individual verifications or special cases) or automate with a Leading TIN Verification Providers

Failing to verify a TIN with the IRS / Assuming a TIN is valid

Tax form submissions with incorrect, missing or wrongly formatted information may result in penalties to the business and delayed tax returns for contractors, suppliers or users:

  • You will likely receive an IRS CP2100 Notice, and may be required to initiate backup withholding for this individual. Backup withholding dramatically increases the complexity of tax operations 
  • See fees for incorrect TIN format above

Further, failing to verify TIN/Name combinations at the time on onboarding contractors/vendors could expose the business to potential fraud or identity theft risks

  • Magnitude of damage to brand reputation, customer relationships and/or remediation expenses will vary by industry, but especially for businesses subject to data protection laws and regulations, ensuring partners are verified prior to accessing certain personal and sensitive data types is of the utmost importance per regulatory bodies such as GDPR and CCPA as amended by CPRA.

To prevent penalties, tax reporting overhead and data security risks, verify all TINs at the time of contractor, supplier or user onboarding via one of the following routes:

Waiting to verify the TIN until tax season

Waiting until the last minute doesn’t leave time for handling any unanticipated issues that may arise. The IRS TIN Matching Program and Information Returns Intake System (IRIS) are bombarded with requests during tax season, which often leads to outages and delays in processing of TIN verifications. TIN verifications may result in a non-match, requiring the business to correct information from contractors, suppliers or users (during an already busy period). 

You don’t want to pay unanticipated fines to the IRS, so start early by verifying all TINs at the time of contractor, supplier or user onboarding and/or with a monthly bulk verification. Bulk uploads can be supported with any of the following solutions:

WHO - Leading TIN Verification Providers

At this point, you may have more questions than you started with, especially if you are new to TIN verifications and/or just now starting to research outside solutions. While the below table is by no means exhaustive, we wanted to provide you a high-level look at how Abound and some of the most common alternatives in industry with the intention of giving you are starting point on your search:


No matter where your TIN verification journey might take you, remember these best practices as you build and/or continue to iterate on your existing processes:

TIN Verification Best Practices

To ensure that you are verifying TINs correctly, consider implementing the following best practices:

  • Create/maintain a documented process for TIN verifications in an easily accessible location
  • Processes may be internal or outsourced, manual or automatic, regardless of methodology, ensure that staff is trained on TIN verification procedures
  • Require new vendors and contractors to provide a W-9 form and verify the TIN before payment, preferably as a precursor to starting work / providing services 
  • Use the IRS TIN matching program or TIN verification service to verify TIN and name combinations
  • Keep accurate records of TIN verification attempts and results
  • Request updated W-9 forms from vendors and contractors annually
  • If using a TIN verification service, consider options which are integrated with your platform and/or existing tech stack to minimize data exposure and manual entry errors

Make Abound Part of Your Journey

If you are interested in having a conversation about using Abound for your TIN verifications, you can connect with us by emailing, or sign up for our service to get started ASAP

Good luck and may this tax season be your best tax season yet!

Ready to build the future independent workers want to work in?

Get started
Book a demo