Understanding Supplier Setup Requirements
You must ensure that your suppliers are set up to meet the following requirements:
IRS mailing address requirements
Legal name and person/corporation code
Tax identification number (TIN)
1099 information for the supplier
Additionally, depending on your supplier information, you might also need to:
Update 1099 information for one-time payment (OTP) suppliers
Identify foreign suppliers
Identify suppliers with backup withholding
Update the 2nd TIN Flag for suppliers
Set up and assign category code 07 if you use the A/P Ledger Method or if you want to identify potential 1099 suppliers for address book reporting purposes. See Assigning Category Code 07 Values to Supplier Address Book Records for more information.
The system stores supplier address information in the following files:
Address Book Master (F0101)
Address Book - Who's Who (F0111)
Address Book - Contact Phone Numbers (F0115)
Address by Date (F0116)
Related Addresses (F01017)
Supplier Master (F0401)
Supplier Co/Bus. Unit Defaults (F04015)
Do not purge records in the F0101, F0111, F0115, F0116, F01017, F0401, and F04015 files for any supplier with accounts payable activity in the calendar year for which you are processing 1099s.
Understanding supplier setup requirements includes:
Understanding the IRS mailing address requirements
Understanding the legal name and person/corporation code
Understanding the mailing address
Understanding the TIN
Understanding the IRS Mailing Address Requirements
The Internal Revenue Service (IRS) limits the mailing address on 1099 returns to three lines:
Legal Name (line 1)
Street address (line 2)
City, state, and zip code (line 3)
If the supplier uses a DBA (Doing Business As) name or if the legal name requires more than one line, the IRS allows four lines:
Legal Name (line 1)
DBA Name or Continuation of Legal Name (line 2)
Street address (line 3)
City, state, and zip code (line 4)
Other IRS limitations are:
You cannot have a mailing address that contains more than one line for a street address.
You cannot use the street address line for a legal name.
Understanding the Legal Name and Person/Corporation Code
A supplier can have only one legal name for tax purposes. The legal name is the name associated with the supplier's tax ID. Depending on the whether the supplier is a sole proprietor or non-corporate entity, the legal name is either the mailing name or it is the name that is set up in the Who's Who file (F0111) that has the value T (1099 Legal Name) in the Type Code field.
If the mailing name that displays on the Address Book Revisions screen is not the legal name of the supplier, you must enter the legal name using the Who's Who program (P0111) and designate a type code of T (1099 Legal Name). The system prints both the mailing and legal names on the 1099 return.
If you do not use the legal name, the IRS records will not match the name that you provide on the 1099 return. This might subject you to IRS penalties or fines.
The value in the Person/Corporation Code field on the Address Book Control Revisions screen determines whether the supplier is a sole proprietor or non-corporate entity. If the supplier is a:
Sole proprietor, enter P in the Person/Corporation Code field.
Non-corporate entity, enter N in the Person/Corporation Code field.
You access the Address Book Control Revisions screen by choosing Address Book Control Revisions (F13) from the Address Book Revisions program (P01051).
Many applications use the mailing name throughout JD Edwards World software. For example, this is the name that prints on an A/P payment or as part of the Remit To address for customer statements; therefore, if you need to change the mailing name to accommodate the IRS requirements for 1099 processing, be sure to consider any other type of form that you print that might utilize it.
Examples of Legal Names
The following examples illustrate legal names for sole proprietors and non-corporate entities.
If the supplier is a sole proprietor (P in the Person/Corp Code field) that uses a DBA name, you must set up a legal name record in the Who's Who file for the supplier. If the supplier does not use a DBA name, the mailing name is the legal name and you do not set up an additional Who's Who record.
Sole Proprietor |
Description |
|---|---|
Jessica Hammond DBA: The Movers |
Who's Who T record - this is the legal name. Mailing Name |
OR |
|
Mark Rosenberg |
Mailing Name - this is the legal name |
If the supplier is a non-corporate entity (N in the Person/Corp Code field) the mailing name might be the legal name. However, if the mailing name represents only part of the legal name, you must additionally set up a legal name Who's Who record (Type Code = T) so that the system prints the entire legal name on the 1099 form. Because it prints the mailing name from the Who's Who T record first, you must ensure that the legal name in conjunction with mailing name prints correctly on the 1099 form.
The following examples illustrate the mailing name and legal name for various non-corporate entities:
Partnership |
Description |
|---|---|
Robert Aspen and Brad Ness |
Who's Who T record - first line of the legal name. Mailing Name - second line of the legal name. |
OR |
|
Harold Forest, Carol Moss and Joseph Castle et al Ptr |
Who's Who T record - first line of the legal name. Mailing Name - second line of the legal name. |
Trusts and Fiduciaries |
Description |
|---|---|
Milky Corporation Employee Benefit Trust |
Who's Who T record - this is the legal name. Mailing Name - second line of the legal name. |
Exempt Organization |
Description |
|---|---|
Laborer's Union, MMO - CCO |
Mailing Name - this is the legal name. |
OR |
|
St. Joseph's Methodist Church Bldg., Fund |
Who's Who T record - first line of the legal name. Mailing Name - second line of the legal name. |
Understanding the Mailing Addresses
The mailing address that you set up cannot include more than one line for a street address and the street address must be the last non-blank line that is set up in the Address Book Revisions program (P01051). If you need to reference a suite number, building number, apartment number or any additional information, you must add it to the same line as the street address.
When you print the 1099 recipient forms, the Write Media program (P04515) provides a processing option that allows you to print the name and mailing address using 15 characters per inch to accommodate 40 characters. This processing option does not apply to:
-
Copy A forms that you submit to the IRS (if you do not send them an electronic file). If you print Copy A forms, ensure that the mailing name and, or mailing address does not exceed 30 characters. Otherwise, the name and, or mailing address appears truncated.
-
Facsimile forms, which you can also use as the recipient copy. The system prints 40 characters of the mailing name and address by default.
-
Electronic processing. The system uses 40 characters by default.
Example: Mailing Addresses
The address for Johnson Painting Specialists is 214 Potomac Circle, Suite 109, Washington, DC 10023. Because the system prints only the last non-blank line of the street address on the 1099 form, you must enter the street address and suite number on the same line, as shown in the following example:
Understanding the TIN
Suppliers (payees) use W-9 returns to report their tax IDs to a payer. A nine-digit tax ID is required for each supplier. The Accounts Payable system uses this information for the TIN on 1099 returns. The IRS requires that you report the TIN. For 1099 purposes, the TIN for non-foreign suppliers must be one of the following:
Employer Identification Number (EIN), assigned by the IRS
Social Security Number (SSN), assigned by the Social Security Administration (SSA)
For some foreign suppliers, a TIN might not be required or an ITIN (Individual Taxpayer Identification Number) might be acceptable. The ITIN is a tax processing number available only for certain nonresident and resident aliens, their spouses, and dependents who cannot get a Social Security Number (SSN). It is a 9-digit number, beginning with the number 9, formatted like an SSN (NNN-NN-NNNN). You must verify the acceptable foreign TIN reporting requirements with your local IRS office.
Missing and Incorrect TINs
A TIN is incorrect if any of the following conditions exist:
The TIN has a blank value (and the supplier is not foreign).
The TIN has fewer than nine digits.
The TIN contains non-numeric characters. (Do not include hyphens or alpha characters. The system formats TINs with the appropriate hyphenation.)
The IRS requires you to take steps to obtain missing TINs. If you submit 1099s with missing TINs, the IRS encourages you to attach a letter of explanation to Form 4804. If you attach a letter of explanation, you might prevent unnecessary contacts from the IRS. However, you will not prevent the IRS from sending backup withholding notices (B Notices) or imposing penalties on you for submitting 1099s with missing or incorrect TINs. If you do not have a TIN for a supplier, you must withhold tax from any payment that you make to that supplier and report the amount withheld to the IRS.
A TIN might be incorrect for any of the following reasons:
A processing error occurred. The number was entered incorrectly.
The supplier's status changed. The supplier did not report a name change to the IRS or Social Security Administration (SSA), so the name change was not recorded.
The supplier reported an incorrect name. The payee is listed as the only owner of an account with the IRS or the SSA, but the name on the account does not match the payee's name.