10/27/2025
THE SHUT-DOWN AND YOU
Among the consequential entities affected? The IRS. On Wednesday, the agency announced plans to furlough a large portion of its workforce as well as closing most of its functions as the federal government shutdown continues.
IF YOU RUN A BUSINESS, WHAT DOES THIS MEAN TO YOU?
While most agency operations have gone dark (including audits, collections, non-disaster transcript processing, and taxpayer service lines), your deadlines won’t disappear.
The Taxpayer Advocate Service (the department that typically helps untangle those bureaucratic messes) is also shut down. That means any active case you’ve been working on, like an audit response, installment plan, or amended return issue, is frozen until further notice.
Moments like these are exactly why I’m in your corner.
Your strategy doesn’t have to suffer from this shutdown. We can still make sure your filings are compliant and your documentation protects you from unnecessary penalties once the IRS reopens its doors.
So, if you need extra peace of mind about your business’s tax position through this shutdown, reply here or DM me, or call our office to schedule a conversation: 212-247-9090.
DOES YOUR BUSINESS DO R&D?
Developers are cashing in on research and development tax credits. The work they’re doing (from building game engines to writing code and designing algorithms) qualifies as research and development under IRS guidelines.
But it’s not just the gamers who can get in on this – if your business does any kind of innovation (manufacturing improvements, software tweaks, product testing), your work might qualify too.
If you’re curious, I’d love to take a look with you and see if those credits could lower your tax bill next spring (and, get the right substantiation processes in place to protect you from an audit) reply here or DM me, or call our office to schedule a conversation: 212-247-9090.
But before you start dreaming about tax credits and new deductions, let’s talk about something a bit less glamorous… but just as critical for keeping your finances (and sanity) in good shape.
Because today, we’re talking about cleaning up your tax strategy. Specifically, what you need to do before year-end to avoid costly Form W-9 mistakes with your contractors.
WHAT CAN I DO BEFORE YEAR-END TO PREVENT COSTLY W-9 MISTAKES?
The process of collecting Form W9s is one of those “check-the-box” tasks every business has to do that usually goes: get, file, forget.
But I want to urge you today to pay a little more attention to your W9 process.
Here’s why I say that: Your W9 process is your legal defense against thousands of dollars in IRS penalties.
By the time a missing or incorrect Taxpayer Identification Number (TIN) shows up in February (when you’re filing), it’s too late to claim “reasonable cause.” Before year-end is when you have to build your paper trail.
To prove “reasonable cause,” your business must show that you:
1. Acted in a responsible manner, and
2. The failure was due to something beyond your control.
In other words, if you can show you followed the prescribed solicitation rules, you can make the penalty go away.
But the IRS needs to see proof: dates, copies of requests, and records showing your follow-ups. So, make sure to keep all W9-related emails, mailed requests, and signed forms for at least four years after the last 1099 for that vendor.
And if you didn’t know, you can actually check if your contractor’s W9 info matches IRS records before filing any 1099s with the TIN Matching Program.
You simply upload your payee’s name and TIN through the IRS e-Services portal, and the system tells you if it’s a match.
A successful match can give you statutory protection, which reduces your penalty exposure with the IRS and is powerful evidence of due diligence. But it’s not absolute immunity. Make sure you pair it with documented solicitations.
Now, what happens if your contractor won’t give you a W9?
You have to start what’s called backup withholding: keeping 24 percent of their payments and sending that money to the IRS.
If you don’t? That 24 percent becomes your liability, not the contractor’s. You’ll owe the unpaid tax, plus penalties and interest.
Pro move: Don’t make payments to the contractor until the W9 form is received so you can avoid this headache altogether.
WHY YOU SHOULD ACT NOW
Here’s why I’m putting this in front of you right now:
Annual solicitation letters for missing W9s are due by December 31.
Running a bulk TIN Match in October or November gives you time to correct errors before 1099 season.
You still have time to update your accounting software to automatically flag noncompliant vendors and apply the 24 percent withholding rule in January.
By knocking out all three before year-end, you’re essentially bulletproofing your business against one of the IRS’s most common small-business penalties.
So, if you’re not sure whether your vendor files are airtight, now’s the time to check. My team and I can help you run a TIN Match audit, set up your documentation process, and make sure you’re ready before the IRS comes asking questions.
Again, you can reply here or DM me, or call our office to schedule a conversation: 212-247-9090.
