What happens when a seller refuses to provide their U.S. T.I.N.? Does this put a stop to the transaction? The short answer is, “No.” When a seller refuses to provide their U.S. T.I.N., it does not put an abrupt stop to the transaction.
Luckily for the buyer, settlement agents can proceed with the closing. The settlement agent still must file the 1099-S. It is filed without a U.S. T.I.N. by informing the IRS, “Seller refused to provide a Taxpayer Identification Number.”
A settlement agent’s obligation is merely to solicit the seller’s U.S. T.I.N. If the seller refuses, the file should be documented and the 1099-S should be filed anyway. When the seller refuses to provide their U.S. T.I.N., settlement agents should provide the seller with written notice of their obligation to provide their U.S. T.I.N. and notification the 1099-S will be reported to the IRS indicating their refusal to provide a U.S. T.I.N. A copy of the notice should be maintained in the file. The 1099-S will have to be filed manually.
Settlement agents can proceed with the transaction without the threat of a fine by the IRS and the seller can deal with the IRS later as to why they refused to cooperate.
Vanguard Title protects customers from real property title defects and forgeries by providing accurate real estate data, quality escrow services, and insurance against losses. Contact us today at either of our locations – Auburn Hills (248) 751-1000, or Brighton (810) 225-8461.
copy courtesy of FNTG