Methods and Experience for Verifying Supplier Tax ID Mismatches with IRS Records
After recently submitting a supplier list to the IRS, mismatched name feedback was received, with some being sole proprietors whose SSNs in the database were considered by the IRS as missing federal IDs. This article discusses this phenomenon and invites peers with similar experiences to share how to determine priority verification targets to identify potential fake suppliers.
We recently submitted our vendor list to the U.S. Internal Revenue Service (IRS) for batch verification and subsequently received a feedback file listing several vendor names that did not match IRS records. Upon preliminary investigation, we found that some of these mismatched names belong to sole proprietors. In our database, the tax identification number (TIN) for these sole proprietors is recorded as their Social Security Number (SSN), while the IRS appears to expect a Federal Employer Identification Number (FEIN) during verification. This has led to the name matching failures.
We would like to know if any other peers have encountered similar discrepancy files returned from the IRS. If so, how did you determine which mismatches most urgently require review to identify potential fake or fictitious vendors? Any experience or advice would be greatly appreciated. Thank you.