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What is the best way to avoid backup withholding on my vendors?

In most cases once you receive a properly completed and signed W-9 form from your vendor no withholding is required. The few exceptions to this include when:

  • the IRS has notified you that a vendor is subject to withholding or has furnished an incorrect TIN.
  • a vendor with an interest, dividend broker or barter exchange account with you crosses out #2 in the certification section or doesn’t sign the W-9.