IRS Information Returns & Backup Withholding

Question 1

T or F
When you sign an account card/form (a substitute W-9) you are certifying to the IRS that your name and SSN match, that you are not subject to backup withholding, and that you are a US person.

Answer 1

True

Question 2

T or F
The IRS considers mistakes in SSNs, addresses, last names and dollar amounts errors on information returns, which are subject to penalty.

Answer 2

True

Question 3

T or F
If you started backup withholding on a member’s account because he failed to give you a SSN or a signed W-9, you can stop backup withholding on the account when you recieve either a SSN or a signed W-9 from that member.

Answer 3

True

Question 4

T or F
1099-INTs & 1098’s are sent to the IRS to ID all income and confirm truthfulness of the member’s tax return

Answer 4

True

Question 5

T or F
IRS information returns (1099 INTs or 1098s) sent to member can include your CU’s newletter or a loan promo.

Answer 5

False

Question 6

T or F
The purpose of Form 1099-C is to report forgiveness of a debt of more than $600.00, where the debt forgiven was:
1. due to an agreement between the credit union and the member.
2. Per the credit union’s decision to discontinue collection activity on the account
3. recorded on the credit union’s records for business or investment purposes and was discharged in bankruptcy.

Answer 6

True

Question 7

Once a member completes an IRS Form W-8 BEN (claiming foreign status and exemption from backup withholding), the W-8 BEN form is good for how long?

Answer 7

3 Years.

Question 8

T or F
A credit union that is required to apply backup withholding must notify the member within fifteen days after withholding begins.

Answer 8

True