Error on 1099 recipient EIN

[Greta]

Payroll bookkeeper sent out all 1099's with recipient TINs that look like EIN instead of SSN. For example, the SSN should be 225-44-1332 but appears as 22-5441332. I do taxes for both employer and several employees. Do you foresee any problems they will have down the road? Shall I just let this go or ask for corrected slips?

[jofijohnjoseph · Accepted solution]

It won't be an issue for the employees -- they are obligated to report their income received regardless of receipt of a 1099 form.  For the employer, I doubt it matters either -- I am not aware the IRS has ever cracked down on someone for failure to send a 1099 form/sending an incorrect 1099 form.

[IRonMaN]

But they could get a friendly letter from the IRS down the road when they start trying to match numbers 

[Greta]

I agree. I've seen those letters when they pertain to SSN and a person's name. Till now, they basically said fix your records, but no need to do anything about the old error. Also, what if someone else has that EIN number and gets a letter? My preference of course is for the bookkeeper to fix the entire record since it's only mid-March.

[Greta]

I meant to type that it's only mid-January.

[TaxGuyBill]

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@Greta wrote:

I meant to type that it's only mid-January.

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Have they actually been filed yet with the IRS?  If not, it should be easy to fix it before they are filed.

[BobKamman]

I wonder, is it possible for an EIN and SSN to have the same nine numbers?  

The 1099 instructions say,

"Enter the recipient's TIN using hyphens in the proper format. SSNs, ITINs, and ATINs should be in the XXX-XX-XXXX format. EINs should be in the XX-XXXXXXX format. You should make every effort to ensure that you have the correct type of number reported in the correct format."

I wonder, what Code section applies a penalty for not making every effort?