Can You Issue a 1099 Without a W-9? Withholding and Penalties

Yes, you can issue a 1099 without a W-9, and the IRS expects you to file it even when a contractor refuses to hand over their information. A missing W-9 doesn’t cancel your reporting duty. It does add two new problems on top of the filing itself: you have to document your attempts to collect the taxpayer identification number, and you have to start withholding 24% of every payment you make to that contractor. Starting with the 2026 tax year, businesses must report nonemployee payments of $2,000 or more on Form 1099-NEC or 1099-MISC, up from the previous $600 threshold.¹

The filing requirement and the W-9 collection requirement are separate duties under federal law. Under 26 U.S.C. § 6109, anyone required to file an information return must include identifying numbers for both the filer and the recipient.² That creates the duty to ask. It does not let you skip filing if the answer never comes. Small businesses commonly assume that no W-9 means no 1099, don’t file, and then face penalties for both the missing return and the missing TIN.

Document Three Attempts to Get the W-9

Before you file with a blank TIN, you need a paper trail. The IRS Internal Revenue Manual lays out three solicitations: an initial request when the business relationship begins, a first annual solicitation by December 31 of that same year, and a second annual solicitation by December 31 of the following year.³ If the account opens in December, the first annual solicitation deadline extends to January 31 of the next year.

Save copies of every email and letter. Keep certified mail receipts. If you called, log the date and what was said. Three documented attempts on the right schedule are what the IRS looks at when deciding whether you acted reasonably. Skip one, and any later argument for penalty relief gets harder.

Fill Out the 1099 With a Blank TIN Field

Once you’ve done the solicitations and still don’t have a number, the IRS instructions tell you to leave the TIN field blank.⁴ Don’t type zeros. Don’t type “unknown.” Don’t invent a placeholder. A blank field tells the IRS the number was never obtained; a wrong number tells them you filed inaccurate information, which is a different problem.

Fill in everything else. Pull the contractor’s legal name and mailing address from signed contracts, invoices, or payment records. The more complete the rest of the return, the stronger your position if the IRS questions the blank TIN. Pair each filed 1099 with the solicitation records and the business documents you used to complete it.

Start Withholding 24% of Payments

This is the part that catches most businesses off guard. Under 26 U.S.C. § 3406, when a payee fails to furnish a TIN, the payer must withhold 24% of every payment and send it to the IRS.⁵ The duty starts the moment you know the TIN is missing, not at year-end. If you’ve been paying a contractor all year without a W-9, you’re already behind.

Deposit the withheld amounts through the Electronic Federal Tax Payment System (EFTPS) on the same schedule you’d use for payroll tax deposits. Report the annual total on Form 945, due January 31 of the following year.⁶ Show the withheld amount in the appropriate box on the contractor’s 1099-NEC.

The statute treats backup withholding the same way it treats wage withholding: the payer is liable for the tax that should have been withheld, whether or not it was actually deducted from the contractor’s check.⁵ Pay a contractor $50,000 without withholding and you can owe the IRS $12,000 from your own funds, regardless of what the contractor eventually does on their own return.

What the Penalties Look Like

Filing a 1099 with a blank TIN, incorrect information, or after the deadline triggers penalties under 26 U.S.C. § 6721. The IRS uses a tiered structure based on how fast you fix the problem.⁷ For returns due in 2026, the per-form penalties are:⁸

Corrected within 30 days: $60 per form
Corrected after 30 days but by August 1: $130 per form
Corrected after August 1 or never filed: $340 per form
Intentional disregard: $680 per form, or 10% of the amount that should have been reported, whichever is greater

Each tier has an annual cap on total penalties across all your information returns for the year. The caps are significantly lower for small businesses with average annual gross receipts of $5 million or less over the preceding three tax years.⁷ The intentional disregard penalty has no cap.

Fifty returns with missing TINs, uncorrected past August 1, would cost $17,000. Those penalties sit on top of any liability for failing to backup withhold. A single uncooperative contractor gets expensive quickly.

Getting Penalties Waived

The IRS can waive information return penalties if you show the failure was due to reasonable cause and not willful neglect.⁹ This is where those documented solicitations pay off. You generally need to show either significant mitigating factors or circumstances beyond your control, and that you acted responsibly before and after the failure.

Acting responsibly means exercising reasonable care with your filing obligations, taking steps to prevent the problem, and correcting the return as soon as you could. The IRS looks for a fix within 30 days of discovering the issue. You submit a written statement describing what happened and why the failure wasn’t due to neglect, signed under penalties of perjury.

Consider First Time Abate relief before going the reasonable cause route. You qualify if you filed the same return type for the prior three tax years, received no penalties during that period (or had any removed for an acceptable reason), and met all deposit requirements.¹⁰ It’s simpler and doesn’t require you to explain the circumstances.

How and When to File

Businesses filing 10 or more information returns of any type during a calendar year must file electronically.¹¹ The 10 counts across all return types combined. Six 1099-NECs and four 1099-MISCs hits the threshold.

The IRS Information Returns Intake System (IRIS) is the free, web-based portal for electronic filing. You can enter data manually or upload a CSV, and the system lets you download payee copies.¹² The older FIRE system will be retired after the 2025 tax year filing season, so 2026 tax year returns filed in early 2027 must go through IRIS.¹¹

If you file fewer than 10 returns on paper, include Form 1096 as a transmittal summary. The general deadline for furnishing Copy B to the payee and filing with the IRS is January 31. For the 2026 tax year, January 31, 2027 falls on a Sunday, so the deadline shifts to Monday, February 1, 2027.¹³

Many states require their own 1099 filings. The IRS Combined Federal/State Filing (CF/SF) program forwards return data to participating states automatically when you e-file through IRIS.¹⁴ Not every state participates, and some participating states still require a separate filing for certain return types. Check with your state’s revenue department; state penalties stack on top of the federal ones.

1
IRS. FS-2025-08
2
Office of the Law Revision Counsel. 26 U.S.C. 6109 – Identifying Numbers
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Internal Revenue Service. 20.1.7 Information Return Penalties
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Internal Revenue Service. General Instructions for Certain Information Returns
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Office of the Law Revision Counsel. 26 U.S.C. 3406 – Backup Withholding
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Internal Revenue Service. About Form 945, Annual Return of Withheld Federal Income Tax
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Office of the Law Revision Counsel. 26 U.S.C. 6721 – Failure to File Correct Information Returns
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Internal Revenue Service. Information Return Penalties
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Office of the Law Revision Counsel. 26 U.S.C. 6724 – Waiver, Definitions and Special Rules
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Internal Revenue Service. Administrative Penalty Relief
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Internal Revenue Service. Topic No. 801, Who Must File Information Returns Electronically
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Internal Revenue Service. E-File Information Returns With IRIS
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Internal Revenue Service. 2026 Publication 1099 General Instructions for Certain Information Returns
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Internal Revenue Service. Combined Federal/State Filing Program State Coordinator Information FAQs