January 03, 2014

An information return is a tax document used to report certain types of payments made by financial institutions and others who make payments as part of their trade or business as required by Internal Revenue Code Regulations.

In addition to Form 1099-MISC (Miscellaneous Income), other forms in the Form 1099 series often encountered, which will be discussed:

• 1099-DIV (Dividends and Distributions);
• 1099-INT (Interest Income);
• 1099-B (Proceeds From Broker and Barter Exchange Transactions);
• Form 1099-C (Cancellation of Debt);
• Form 1099-R (Distributions From Pensions, Annuities, Retirement or Profit-Sharing
• Plans, IRAs, Insurance Contracts, etc.); and
• Form 1099-S (Proceeds from Real Estate Transactions).
• There are a few forms in the 1099 series, which are somewhat new that will also be discussed:
• 1099-LTC (Long-Term Care);
• 1099-SA (HSA and MSA Distributions); and
• 1099-K Merchant Card and Third-Party Network Payments

The forms in the Form 1099 series are designed to convey various income and deduction information regarding a given recipient to the IRS. The IRS, in turn, matches the information reported on the Form 1099 with the information reported on the recipient’s income tax return and, in case of a discrepancy, contacts the recipient for an explanation.

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The following items are recent changes in the last few years related to filing information returns:

Truncate ID

Pursuant to proposed regulations §§ 1.6042-4(b) and 301.6109-4 (REG-148873-09), all filers of Forms 1099 are allowed to truncate a recipient’s identification number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN) on paper payee statements beginning with the 2011 tax year.

Due Date for Certain Statements Sent to Recipients

The due date for furnishing statements to recipients for 2013 Forms 1099-B, 1099-S, and 1099-MISC [if amounts are reported in Boxes 8 (Substitute Payments in lieu of Dividends or Interest or Box 14(Gross Proceeds Paid to an Attorney)] is February 18, 2014. This also applies to statements furnished as part of a consolidated reporting statement.

IRS Information Reporting Program Customer Service Section

For questions about reporting on Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498, W-2, W-2G, and W-3, call a toll-free number, 1-866-455-7438. The original telephone number, 304-263-8700 (not toll free) is also available. Persons with a hearing or speech disability with access to TTY/TDD equipment can call 304-579-4827 (not toll free). The hours of operation are Monday through Friday from 8:30 a.m. to 4:30 pm (ET).

IRS Publications on Information Reporting

1. 1.    There are several IRS documents available for assistance with information reporting:
2. General Instructions for Certain Information Returns;
3. Publication 1220 Specifications for Filing Forms 1099 Electronically (Rev-Proc 2012-30 August 13, 2012);
4. Publication 1281 Backup Withholding for Missing and Incorrect Name/TIN(s).
5. Publication 1179 General Rules and Specification for Substitute Forms (Rev-Proc 2012-38 November 26, 2012); and
6. Publication 2108A Online Taxpayer Identification Number (TIN) Matching Program.

What Transactions must be Reported and Due Dates

Included in the Appendix is the IRS filing guide chart, which can be found in the publication “General Instructions for Certain Information Returns”. It details the due dates for each type of information return. This list is not a complete list of all transactions, and the absence of a transaction from the list does not mean that the transaction need not be reported.

Electronic filers receive an additional 30 days to file with the IRS over paper filers.

Electronically-filed Forms 1099-MISC, for instance, are due March 31st, whereas paper filed Forms 1099-MISC are due by February 28th. Paper filers must also submit the transmittal Form 1096 Annual Summary and Transmittal of US Information Returns. Filers of 250 or more of any return type are required to file electronically.

Electronic Filing Waiver

To receive a waiver from the required filing of information returns electronically, submit Form 8508, Request for Waiver from Filing Information Returns Electronically, at least 45 days beforethe due date of the returns. Information return filers cannot apply for a waiver for more than onetax year at a time. If a waiver is needed in a subsequent year, another waiver request must befiled. Approved waivers are retained in the information return filer’s records only. They are notsent to the IRS when the returns are filed.

If a waiver for original returns is approved, any corrections for the same types of returns will be covered under the waiver. However, if an information return filer submits original returns electronically but would like to submit corrected returns on paper, a waiver must be approved for the corrections if the filer will be filing 250 or more corrections.

Penalty

Unless reasonable cause is established, failure to file electronically when required can result in penalties of up to $ 100 per return.

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