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Is a payee an exempt corporation if it uses the term “Company” or “Co.” in its name?

A payer cannot treat a payee as an exempt organization merely because the business name contains the word “Company” or “Co.” A payer may treat a payee as exempt if:

  • the name contains the term insurance company, indemnity company, reinsurance company or assurance company. Requirement one is also met if the entities name indicates that it is an entity listed as a corporation under IRS Regulations, section 301.7701-2(b)(8)(i),
  • the payer has on file a corporate resolution or similar document clearly indicating corporate status,
  • the payer receives a Form W-9 which includes an EIN and a statement from the payee that it is a domestic corporation or,
  • the payer receives a withholding certificate described in Section 1.1441-1(e) (2)(i), that includes a certification that the person whose name is on the certificate is a foreign corporation.

For additional information see Publication 1281, Backup Withholding.