Validate tax IDs during onboarding in the Airbase Vendor Portal to avoid any penalties during tax reporting. Airbase validates the tax IDs of the vendors against the respective government records. For instance, if the vendor’s tax ID is issued by the U.S. government, Airbase matches the tax ID details against the IRS records.
Vendor onboarding
Here’s how to validate the tax IDs during onboarding:
- Under the Tax Details section, select the relevant Tax Form, such as the W-9 form. If the applicable tax form is not listed, select Other Tax Form. Click Upload to attach the file. Uploaded files cannot be deleted.
- Enter the correct Legal Name and Tax ID.
- Select the relevant Tax ID Type.
Airbase will validate the tax ID once these tax details are submitted.
When a W-9 form is uploaded, Airbase will automatically scan it to extract the tax ID details, such as the Legal Name and Tax ID, with AI-powered OCR. Airbase typically takes a few minutes to scan the form and auto-fill the tax details.
Vendor account
Here’s how to validate the tax IDs on the Vendor Portal account:
- Click Edit under Tax Details in the Basic Details section.
- Select the relevant Tax Form, such as the W-8 form. If the applicable tax form is not listed, select Other Tax Form. Click Upload to attach the file. Uploaded files cannot be deleted.
- Enter the correct Legal Name and Tax ID of the vendor.
- Select the relevant Tax ID Type.
- Click Save to initiate the Tax ID Validation.
When a new W-9 form is uploaded, Airbase will automatically scan it to extract the updated tax ID details, such as the Legal Name and Tax ID, with AI-based OCR. Click Yes, Replace to overwrite the existing tax ID details. Airbase typically takes a few minutes to scan the form and auto-fill the tax details.
Airbase displays the current tax ID validation status on the vendor’s accounts.
Notifications
Airbase sends email and Slack notifications to the vendors when the tax ID validation fails or when tax details are found to be invalid.
Email notification
Slack notification
Mark invalid tax ID as valid
Airbase allows you to manually mark the invalid tax ID as valid in the vendor portal account.
If your Tax ID details are found invalid, it means your legal name and tax ID combination do not precisely match government records. Airbase recommends reviewing the tax ID details before reinitiating the tax ID validation.
Sometimes, government databases can be out of sync. For instance, if the tax ID has been recently issued or updated, it might not reflect immediately in government records. The IRS, for instance, typically takes a few weeks to update its database with the latest information.
In such cases, you can manually mark the tax ID as valid. This will provide you with an evidence trail during tax reporting. Ensure the tax ID is accurate before manually marking it as valid to improve tax compliance.
Here’s how to mark invalid tax ID as valid:
- Click Mark Tax ID as Valid under the Tax Details section.
- Enter a reason for marking the tax ID as valid. Click Confirm.
Once the tax ID is manually marked as valid, Airbase displays a Validated by {vendor name} banner in the Tax Details section.
Customers of the vendor receive email and Slack notifications when the tax ID is manually validated in the vendor portal.
To revert the manual validation of the tax ID, attempt revalidating the tax ID.
- Vendors’ tax details cannot be edited when validation is in progress.
- Domestic vendors can reach out to their respective customers to mark the requirement for W-9 and tax ID as optional if they do not wish to submit the tax details.
- A combination of vendors’ legal names and tax IDs is required to initiate the tax ID validation.
- Multiple tax forms can be uploaded simultaneously.
- Uploaded tax forms will reflect under the Tax Details and in the All files section.
- Tax ID type is set to U.S. Tax ID by default for the U.S. vendors getting paid in the U.S. and it cannot be edited.
- AI-Powered Extraction of Tax Details feature is only applicable when a W-9 form is uploaded. Tax details can also be filled in manually for W-9 forms, similar to other tax forms.