Company is requesting W-9 before refunding purchase

Question

My significant other purchased a spa day-pass from one of those deal-a-day sites (similar to Groupon, but done locally). The spa wouldn't accept the day-pass, so she's trying to get a refund from the deal-a-day site. They are requesting she fill out a W-9 before they refund any money. Their explanation is their parent company requires a W-9 before cutting any check. This doesn't sound appropriate, especially giving them her SSN for a mere refund.

Two questions -

1. Should a company require a W9 when you haven't done any work for them? I searched their site's terms and conditions and it doesn't list anything about a W9 required for refund.

2. If we do give them a W9, is that automatically going to cause us to report that as earned income in this years taxes?

Thanks!

Answer 1

W9 is required for any payments.

However, in your case - these are not payments, but refunds, i.e.: you're not receiving any income from the company that is subject to tax or withholding rules, you're receiving money that is yours already.

I do not think they have a right to demand W9 as a condition of refund, and as Joe suggested - would dispute the charge as fraudulent.

Answer 2

Form W-9 (officially, the "Request for Taxpayer Identification Number and Certification") is used in the United States income tax system by a third party who must file an information return with the Internal Revenue Service (IRS). It requests the name, address, and taxpayer identification information of a taxpayer (in the form of a Social Security Number or Employer Identification Number).

A W-9 is typically required when an individual is doing work, as a contractor or as an employee, for a company and will be paid more than $600 in a tax-year. The company is required to file a W-2 or a 1099 and so requests a W-9 to get the information necessary for those forms.

I cannot say if it is incompetence on the part of the accounting department or a deliberate ploy to make the refund process more onerous, but do not comply. Politely nsist on a refund without any further information. If the company refuses, request a charge-back from the credit-card company, file a complaint with the consumer-protection department of the state where the company is located, and write a bad review on Yelp or wherever else seems appropriate.