IRS PUBLICATION 1586 UPDATED:

The IRS has updated IRS Publication 1586 (Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TINs). The publication was last updated in July 2022.

The objectives of the publication are to: (1) provide general information needed to avoid penalties for information return documents that are filed with missing or incorrect taxpayer identification numbers (TINs); (2) describe the actions that must be taken or should have been taken to solicit (request) a TIN; and (3) explain the requirements for establishing reasonable cause.

Reasonable cause.

To support that the failure to include a correct TIN was due to reasonable cause and not willful neglect, filers must establish that they “acted in a responsible manner” both before and after the failure occurred and that: (a) there were significant mitigating factors (for example, an established history of filing information returns with correct TINs), or (b) the failure was due to events beyond the filer’s control (for example, actions of the payee or any other person).

“Acting in a responsible manner” (except as otherwise stated in the publication) generally involves making an initial solicitation (request) for the payee’s name and TIN and, if required, an annual solicitation.

Save for retirement. Saving for retirement can also lower a taxpayer’s AGI. Contributing money to a retirement plan at work and to a traditional IRA also reduces taxable income.