IRS is Cracking Down on 1099 Filers via Enforcement Programs and Full Information Reporting and Withholding Audits
The IRS is cracking down on 1099 filers and scrutinizing abatement requests that in the past would have been accepted, requiring proof to support claims for reasonable cause proof for abatement and significantly increasing the number of companies for regulatory audit. Proposed legislation in the House of Representatives (HR 3408) seeks to increase the penalty for not filing by as much as five times the current rate. The maximum penalty for not filing information returns could jump from $250,000 for large corporations to $1 to $3 million. Small corporations would see the maximum penalty jump from $250,000 to $1 million. Additionally, the penalty for filing 1099s with incorrect or missing Taxpayer Identification numbers could go from $50 per return to $250. If passed, these changes could be applicable to 2009 reporting, so it is imperative that your AP department take notice to avoid staggering penalties.
Keep in mind that failure to properly document payees, withhold federal tax when required (backup withholding) and file accurately, places the financial responsibility and liability for the penalties and the dollars that should have been withheld directly on your organization.
Ensure that your organization’s policies and procedures are compliant with current regulatory requirements and can incorporate updates to comply with the proposed and new legislation. Don’t wait for these changes to take effect. Protect your organization from the risk of incurring expensive penalties (or worse, withholding liability).
Train Your Staff on 1099 Best Practices — from the Convenience of Your Conference Room — to Protect Your Organization from Costly Penalties & Fines
Avoid 1099 Penalties with Good Processes and Procedures
Presented by: Douglas Rogers, IRSCompliance, Inc.
(Recorded September 22, 2009 – available on CD) —
Teach your staff key skills guaranteed to maximize 1099 accuracy and avoid severe penalties — without ever leaving your desk! This 60-minute online seminar, presented by Doug Rogers, former IRS director of Penalties and Interest, provides tips that will help you:
- Understand why you should file an extension for your penalty assessment response
- Learn what to do this year to protect your company from huge penalties
- Reduce or eliminate assessed penalties for missing or incorrect SSNs/TINs
- Capture correct Social Security numbers and Tax Identification numbers
- Improve internal procedures and implement the solution that will become the center for providing reasonable cause proof for abatement
B-Notice Processes That Establish Reasonable Cause to Abate Penalties
Presented by: John Foertschbeck and Lynda Foertschbeck, IRSCompliance, Inc.
(Recorded October 22, 2009 – available on CD) —
With the increased scrutiny that the IRS has placed on requests for abatement and the enforcement of the regulations, ignoring B-notices or not demonstrating due diligence by complying with the regulatory procedures that a payer is required to follow can place your company at risk for costly penalties. It is now more important than ever to focus on your procedures and improve communication with your payee. Order now to:
- Explore steps to correctly handle, process and file the B-Notice
- React when a payee does not respond to your B-Notice solicitations
- Learn about backup withholding regulations
- Respond to an IRS 972CG Penalty Notice and avoid paying the penalties
- Use your B-Notice processing procedures to get the IRS to waive the penalties
- Eliminate or reduce B-Notices and penalty notices in the future
New 1099 Regulations Expected: Prepare Now to Protect Your AP Department
Presented by: Douglas Rogers, IRSCompliance, Inc.
(Recorded October 29, 2009 – available on CD) —
Don’t wait for massive changes to 1099 regulations to take effect. Protect your organization from devastating penalties (or worse) by ensuring your staff understands the importance of regulatory compliance. Learn what is in the currently pending legislation and its impact on you…
- Prepare for what actions will be required when, and if, this legislation becomes law
- Review other compliance initiatives that are in the current administration’s 2010 budget request
- Understand how each initiative could impact your operation, including increased penalties, requirement to
voluntarily withhold when payee requests, requirement to certify each Payee TIN and increased reporting
for certain government payments
Reduce Your Risks with Accurate P-card & Merchant Reporting, Certification and Withholding Reporting
Presented by: John Foertschbeck and Lynda Foertschbeck, IRSCompliance, Inc.
(Recorded November 19, 2009 – available on CD) —
Incorporating P-card and Corporate Card Transactions into your existing processes and procedures is a challenge. If P-card payments otherwise meet IRS requirements, are you properly following reporting obligations on these payments? Do you get a verified Name and TIN for every payment made with a P-card? How can you backup withhold if the payment is already made? Order this 60-minute program to learn:
- Effective methods, filing requirements and recommendations to improve internal procedures
- How the long-standing Qualified Payment Card Agent (QPCA) program is supposed to help you
- Newly enacted legislation for Merchant Card Reimbursement Reporting
- What your company can do to minimize risk of IRS penalties from improper P-card processing
1099 State Reporting Requirements and Compliance Issues
Presented by: John Foertschbeck and Lynda Foertschbeck, IRSCompliance, Inc.
(Recorded December 1, 2009 – available on CD) —
Many organizations are comfortable with knowing what to report and withhold at the federal level, but fall short with regard to reporting and withholding requirements at the state level. Get an overview of specific issues you need to address at the state level, including reporting requirements, exceptions to Combined Federal State Reporting, withholding requirements on backup withholding, non-state residents, independent contractors, “deadbeat parents” and various other state-reporting issues.
Several states have withholding requirements on payments issued to out-of-state residents for services provided. Withholding and deposits are strictly enforced and can lead to very costly penalties for compliance failures. Learn what requirements your organization needs to incorporate in the payment and withholding process.
1099-MISC Workshop
Presented by: John Foertschbeck and Lynda Foertschbeck, IRSCompliance, Inc.
(Recorded December 10, 2009 – available on CD) —
Perhaps the most utilized form in the IRS reporting program, completing 1099-MISC for certain payments can be a daunting task. And, if done incorrectly, organizations could face severe penalties and fines. Participate in this discussion on the reporting requirements for payments required to be reported on Form 1099-MISC. We will cover how the requirements impact payments issued through your company, best practices for tracking and reporting card transactions and the challenges in obtaining Payee TIN and name information, backup withholding and related customer relations. Order this session and you will learn the use of Form 1099-MISC for reporting:
- Rents, royalties, honorariums and executive compensation
- Settlements and attorney’s fees
- Service providers
- P-card and corporate card transactions
- Prizes and awards
- Other income
- And, much more!
Processing and Filing Form 1042-S: Payments Issued to Foreign Payees and Treaty/Non-treaty Withholding
Presented by: Lynda Foertschbeck and Douglas Rogers, IRSCompliance, Inc.
Live Webinar: January 14, 2010 —
The IRS has placed a high priority on enforcing compliance with regard to payers that issue payments to foreign payees, payee documentation, proper treaty/non-treaty withholding, recipient statements and filing 1042-S information returns.
Attend this webinar to review the specific requirements for payee documentation, properly classifying payments, implementing withholding and processes to file 1042-S information returns for your organization and avoid the liability for improper withholding and penalties. Learn the basics of identifying who is a Non-resident Alien, what documentation to obtain and what payments are reportable, how to withhold, pay and report Non-Resident Alien Payments.
This 1099 filing season will be more challenging than ever! Train your entire staff from the convenience of your conference room at special pricing for TAPN members.
About Your Expert 1099 Training Faculty:
John Foertschbeck, CPA, CFO at IRSCompliance, Inc., has more than 20 years experience in providing and managing tax compliance services and consulting related to tax reporting software and associated full services. He has been responsible for the management of consultation and implementation services of tax software for clients (Fortune 500) that present complex business models in the integration and conversion process. Formerly, John was with the Tax Controversy Services Group for Deloitte Tax, LLP, managing services to U.S. and international companies for both 1099 and 1042-S regulatory reporting, certification and withholding.
Lynda Foertschbeck, Executive Vice President, IRSCompliance, Inc., has more than 25 years experience as a tax compliance professional in the development of compliance solutions of regulatory consulting services and tax software applications. Prior to joining IRSCompliance Lynda served as Manager in the Tax Controversy Unit at Deloitte Tax, as Vice President and Compliance Product Manager at DISC, Incorporated (now CheckFree) and Director of Compliance Services for Moore, BCS. Ms. Foertschbeck’s experience includes the development and enhancement of many proven tax software and service solutions for 1099, W-2, 1042-S processing and reporting to the IRS, SSA and state agencies.
Douglas Rogers is Director of Consulting Services for IRSCompliance, Inc., a federal/state tax reporting firm and a market-leading provider of information-reporting services for Forms 1099, W-2 and 1042-S filers. Doug consults regularly with executives from a variety of fields to help identify potential non-compliance risk and to develop and ensure implementation of solutions. Prior to this position Doug was with the Internal Revenue Service where he held a number of positions. For the five years prior to his retirement he served as the National Director of Penalties and Interest.
