The IRS requires business to report most payments over $600 per year made to their vendors on a 1099 form. If you run a small business, your customers and clients will ask you for form w-9 which gives them your social security number or employer id to use on the 1099.
With the concern for privacy and identity theft, many people feel uncomfortable giving out their social security number. There’s an easy way to keep your social security number private and still comply with the reporting requirements-just apply for an employer id number for the IRS. You can do this even if you have (and never expect to have) any employees. You can apply online at http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-%28EIN%29-Online.
Disclaimer: I am not a CPA or attorney. Please check with your CPA to make sure the above comments apply to your situation before use.