1099 Corrections, B-Notice Processing, and Backup Withholding Tips

1. The Law - Learn it, Know it, Live it 00:01:16
2. What’s New In 1099 E-Filing - Big 1099/W-2 E-Filing Changes 00:06:09
3. What’s New In 1099 E-Filing - Using IRIS and E-Filing Issues 00:07:39
4. Major Source of Mistakes: 1099 Accountable Plans and Expense Reimbursements 00:11:26
5. Another Big Source of Mistakes: 1099 Fringe Benefits -  Expense Reimbursement vs. Fringe Benefit 00:15:04
6. Another Big Source of Mistakes: 1099 Fringe Benefits - Recent Changes 00:20:39
7. Draft 2026 Form 1099-NEC 00: 25:01
8. Draft 2026 Form 1099-MISC 00:35:00
9. A Note On Recent Proposed W-9 Changes 00:38:17
10. Cutting Down on Corrections: TIN Match Program Reminder - IRS TIN Match Program 00:46:25
11. Cutting Down on Corrections: TIN Match Program Reminder - Delegated Authority 00:57:59
12. Cutting Down on Corrections - Form 1099 Corrections 01:07:27
13. Cutting Down on Corrections - Payer Mistakes 01:07:26
14. Cutting Down on Corrections - Proposed Penalties 01:09:38
15. Backup Withholding Tips- Reportable Payments 01:12:21
16. Backup Withholding Tips - Four Triggers 01:15:16
17. Backup Withholding Tips - Reasons For B-Notices 01:17:49
18. B-Notice Response Best Practices- B-Notice: CP-2100 01:20:22
19. B-Notice Response Best Practices - B-Notices and IRS Matching 01:26:00
20. B-Notice Response Best Practices - 1st Notice 01:28:39
21. B-Notice Response Best Practices - 2nd Notice 01:32:33
22. Protect Yourself 01:37:31
23. Presentation Slides 01:40:30

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  Steven Mercatante

  Steven Mercatante is the principal and founder of TIR Consulting, LLC. He is a nationally recognized leader in tax reporting education and consulting on specialized compliance issues. He has conducted on-site consultation for corporate clients from across the world and led countless seminars and web [...]

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• Accountable Plan 00:12:16, 01:09:36
• Artificial Intelligence (AI) 00:03:29
• Audit 00:02:40, 00:11:35, 00:32:44, 00:43:34
• Backup Withholding 00:01:05, 00:27:10, 00:38:26, 01:10:55
• B-Notice 00:01:02, 00:09:59, 00:16:26, 00:27:32, 00:38:27, 00:42:280, 1:20:22
• C-Notice 01:15:52
• CP-2100 00:09:58, 01:15:36, 01:22:22, 01:32:31
• DBA -Doing Business As 00:40:40, 00:44:36, 01:26:40
• De Minimis Fringe Benefits 00:19:32
• Department of Labor (DOL) 00:33:09
• Disregarded Entity 00:40:46, 00:44:19, 01:00:07
• Due Diligence 00:4:09, 00:48:57
• EIN 00:41:05, 01:19:17, 01:26:26
• Exempt 00:33:29
• Expense 00:13:02, 00:21:38
• Expense Reimbursement 00:11:38, 01:09:13
• Fair Labor Standards Act (FLSA) 00:32:46
• Fair Market Value (FMV) 00:17:01
• FATCA 00:42:37
• FIRE - File Information Returns Electronically 00:06:14, 00:08:03
• Form 1042-S 01:05:00
• Form 1097-BTC 00:10:16
• Form 1098 00:10:15
• Form 1099-INT 01:15:57
• Form 1099 MISC 00:25:11, 00:35:02
• Form 1099-NEC 00:10:28, 00:12:47, 00:25:10, 00:57:56
• Form 1099-PATR 01:16:01
• Form 8809 00:09:40, 00:10:55, 01:10:07
• Form 945 01:17:52
• Form 945-A 01:18:03
• Form W-2 00:06:28, 00:10:14, 00:17:39
• Form W-9 00:38:17, 00:43:19, 00:47:15, 00:50:12, 01:05:28, 01:18:09, 01:22:34
• Fringe Benefits 00:11:37, 00:15:05, 01:09:14
• Independent Contractors 00:11:39, 00:15:13, 00:32:5301:09:22
• Information Returns Intake System (IRIS) 00:06:19
• Invoice 01:05:52
• IRC 972-CG 01:05:08
• IRC Sec. 3406(a) 00:03:02, 00:04:27, 00:27:03, 01:12:39, 01:21:05
• IRC Sec. 6041(a) 00:03:02, 00:04:16
• IRC Sec. 6109(a)(2) 00:03:02, 00:04:20, 00:38:42
• IRC Section 132 00:18:44
• IRC Section 6721 00:53:23
• IRC Section 6722 00:53:51
• IRC Section 6724 00:54:23, 01:00:41
• IRIS Application-to-Application (A2A) Connection Point 00:07:40
• Liability 00:12:04
• Limited Liability Company (LLC) 00:40:41
• Minimum Wage 00:33:39
• Overtime 00:33:10
• Reasonable Cause 00:55:03, 01:06:07
• Sole Proprietor 00:40:39, 01:28:34
• Tax Gap 00:01:59
• TIN 00:38:37, 00:44:44, 00:47:44, 01:00:01, 01:16:25, 01:23:15
• TIN Match Program 00:46:38, 00:55:01
• Transaction 00:55:24
• Transmitter Control Code (TCC) 00:07:29
• Travel Expense 00:12:12
• Vendor 00:04:41, 00:27:01, 00:39:20, 00:41:53, 01:07:35, 01:28:42
• Wage 00:17:51

Accountable Plan: An accountable plan is a plan that follows the Internal Revenue Service (IRS) regulations for reimbursing workers for business expenses in which reimbursement is not counted as income. ... However, these expenses must be business-related to fall under an accountable plan.

Artificial Intelligence (AI): Artificial intelligence is intelligence demonstrated by machines, as opposed to the natural intelligence displayed by humans or animals.

Audit: A formal examination of an organization's or individual's accounts or financial situation

B-Notice: A notice from the IRS stating that one or more tax ID numbers were missing from a 1099 or do not match the IRS records.

Backup Withholding: Backup withholding is the tax that is levied on investment income, at an established tax rate, as the investor withdraws it. Backup withholding helps to ensure that government tax-collecting agencies (such as the IRS or Canada Revenue Agency) will be able to receive income taxes owed to them from investors' earnings. (www.investopedia.com)

C-Notice: Backup withholding notice from the IRS stating that the non-employee has understated income and is subject to backup withholding.

CP-2100: It is a notice that tells a payer that he or she may be responsible for backup withholding. It is accompanied by a listing of missing, incorrect, and/or not currently issued payee TINs. Largevolume filers will receive a CD or DVD data file CP2100, mid-size filers receive a paper CP2100, andsmall filers receive a paper CP2100A.

DBA -Doing Business As: Sometimes it makes sense for a company to do business under a different name. To do this, the company has to file what's known as a DBA, meaning "doing business as." A DBA is also known as a "fictitious business name," "trade name," or "assumed name."

De Minimis Fringe Benefits: De minimis fringe benefits are low-value perks provided by an employer; de minimis is legal Latin for "minimal". Perks that are determined to be de minimis fringe benefits may not be accounted or taxed in some jurisdictions as having too small value and too complicated an accounting.

Department of Labor (DOL): The United States Department of Labor is a cabinet-level department of the U.S. federal government responsible for occupational safety, wage and hour standards, unemployment insurance benefits, reemployment services, and some economic statistics; many U.S. states also have such departments.

Disregarded Entity: A disregarded entity refers to a business entity with one owner that is not recognized for tax purposes as an entity separate from its owner. A single-member LLC ( “SMLLC”), for example, is considered to be a disregarded entity. (www.pntax.com)

Due Diligence: Due diligence is a process or effort to collect and analyze information before making a decision or conducting a transaction so a party is not held legally liable for any loss or damage. The term applies to many situations but most notably to business transactions.

EIN: The Employer Identification Number, also known as the Federal Employer Identification Number or the Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service to business entities operating in the United States for the purposes of identification.

Exempt : Exempt employee is a term that refers to a category of employees set out in the Fair Labor Standards Act. They do not receive overtime pay, nor do they qualify for the minimum wage

Expense: Offset (an item of expenditure) as an expense against taxable income.

Expense Reimbursement: Expense reimbursement is a method for paying employees back when they spend their own money on business-related expenses. These expenses generally occur when an employee is traveling for business but can occur in other work-related situations. (www.thebalancecareers.com)

FATCA: FATCA was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. (www.treasury.gov). FACTA (Fair and Accurate Credit Transactions Act) is an amendment to FCRA (Fair Credit Reporting Act ) that was added, primarily, to protect consumers from identity theft. The Act stipulates requirements for information privacy, accuracy and disposal and limits the ways consumer information can be shared.

FIRE - File Information Returns Electronically: The IRS FIRE system is the electronic network used to accept and process most types of filing forms. Technically, it stands for File Information Returns Electronically.

Fair Labor Standards Act (FLSA): The Fair Labor Standards Act of 1938 29 U.S.C. § 203 is a United States labor law that creates the right to a minimum wage, and "time-and-a-half" overtime pay when people work over forty hours a week. It also prohibits most employment of minors in "oppressive child labor".

Fair Market Value (FMV): The term fair market value is used throughout the Internal Revenue Code among other federal statutory laws in the USA including Bankruptcy, many state laws, and several regulatory bodies. In litigation in many jurisdictions in the United States, the fair market value is determined at a hearing.

Form 1042-S: Form 1042-S is used to report amounts paid to foreign persons (including persons presumed to be foreign) who are subject to income tax withholding. For an individual taxpayer, Form 1042-S is a document provided to you (and the IRS) by the payer of the income reported.

Form 1097-BTC: IRS Form 1097-BTC - Tax Credit Bonds (TCB) are a type of bond that offers the holder a federal tax credit instead of interest. The bond issuer maintains the responsibility to pay the principal on the bond.

Form 1098: A form filed with the Internal Revenue Service (IRS) that details the amount of interest and mortgage-related expenses paid on a mortgage during the tax year.

Form 1099-INT: Form 1099-INT is the IRS tax form used to report interest income. The form is issued by all payers of interest income to investors at year end and includes a breakdown of all types of interest income and related expenses. Payers must issue Form 1099-INTs for any party to whom they paid at least $10 of interest during the year.

Form 1099-MISC: The Form 1099-MISC is an Internal Revenue Service (IRS) tax return document used to report miscellaneous payments made to nonemployee individuals, such as independent contractors, during the calendar year. (www.shrm.org)

Form 1099-NEC: In the context of 1099 tax filing, NEC stands for “Nonemployee Compensation” (the first letters of the three words None, Employee and Compensation). Most tax payers recognize NEC as box 7 on Form 1099-MISC. NEC is used to report income paid to independent-contractors / the-self-employed (referred to as 1099 employees for simplification purposes). So, while employers report income that gets paid to employees on Box 1 (Wages, tips, other compensation) of the W2 form, payers report income that gets paid to none-employees on Box 7 (NEC) of the 1099-MISC form. As an individual, if you received form 1099-MISC instead of Form W-2 then the payer did not consider you an employee and did not withhold income tax or social security and Medicare tax.

Form 1099-PATR: File Form 1099-PATR, Taxable Distributions Received From Cooperatives, for each person to whom the cooperative has paid at least $10 in patronage dividends and other distributions described in section 6044(b), or from whom you withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.

Form 8809: Use Form 8809 to request an initial or additional extension of time to file only the forms shown on line 6 for the current tax year.

Form 945: IRS Form 945 is titled Annual Return of Withheld Federal Income Tax. Form 945 is used to report withheld federal income tax from nonpayroll payments, including distributions from qualified retirement plans.

Form 945-A: Use this form to report your federal tax liability (based on the dates payments were made or wages were paid) for the following tax returns.*Forms 945 and 945-X for federal income tax withholding on nonpayroll payments.*Forms CT-1 and CT-1 X for both employee and employer Tier I taxes and employer Tier II taxes.*Forms 944 and 944-X for federal income tax withheld plus both employee and employer social security and Medicare taxes.

Form W-2: Form W-2 is an Internal Revenue Service tax form used in the United States to report wages paid to employees and the taxes withheld from them. Employers must complete a Form W-2 for each employee to whom they pay a salary, wage, or other compensation as part of the employment relationship. - Wikipedia (https://en.wikipedia.org/)

Form W-9: 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). - Wikipedia (https://en.m.wikipedia.org/)

Fringe Benefits: An extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc.

IRC Section 132: Internal Revenue Code Section 132(a) provides eight types of fringe benefits that are excluded from gross income

IRC Section 3406(a): Requires that, under certain circumstances, including the payee's failure to provide a TIN, the payer must perform backup withholding.

IRC Section 6041(a): Provides that persons engaged in trade or business must report certain payments on an information return.

IRC Section 6109(a)(2): Requires that a payee provide a TIN to the payer when the payment will be reportable on an information return.

IRC Section 6721: If an employer fails to file a correct Information, return by the due date, and cannot show reasonable cause, the employer may be subject to a penalty as provided under IRC Section 6721.

IRC Section 6722: IRC Sec. 6722 authorizes a civil penalty for failing to provide payees with correct copies of statements furnished to the IRS.

IRC Section 6724: I.R.C. § 6724(a) Reasonable Cause Waiver — No penalty shall be imposed under this part with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect.

IRIS Application-to-Application (A2A) Connection Point: The IRIS Application-to-Application (A2A) Connection Point is a secure, automated, system-to-system interface designed for high-volume filers (100+ returns) to submit information returns (like Forms 1099) directly to the IRS in XML format. It replaces the legacy FIRE system, providing real-time validation and automatic acknowledgment of transmissions.

IRS Notice 972CG: The IRS started mailing 972CG penalty notices in July 2013 regarding 1099's with missing or incorrect TIN/Name Combinations. A 972CG is a NOTICE OF PROPOSED CIVIL PENALTY. A simple way to prevent this costly penalty is to verify that your information is correct prior to filing.

Information Returns Intake System (IRIS): The Information Returns Intake System (IRIS) Taxpayer Portal is a system that provides a no cost online. method for taxpayers to electronically file Form 1099 series. The Taxpayer Portal allows you to enter. data to create Forms 1099 by either keying in the information or uploading a .csv file.

Invoice: An invoice, bill or tab is a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer. Payment terms are usually stated on the invoice.

Liability: In financial accounting, a liability is defined as the future sacrifices of economic benefits that the entity is obliged to make to other entities as a result of past transactions or other past events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.

Limited Liability Company (LLC): An LLC is a corporate structure where members cannot be held accountable for the company’s debts or liabilities. This can shield business owners from losing their entire life savings if, for example, someone were to sue the company. Can be a single member (much like a sole proprietor) or a multi-member. It shares certain traits of both corporations as well as partnerships or sole proprietorships. It is not a corporation.

Minimum Wage: The lowest wage paid or permitted to be paid specifically fixed by a legal authority or by contract as the least that may be paid either to employed persons generally or to a particular category of employed persons.

Overtime: Overtime is time and a half of what an employee earns for every hour worked over 40 in a workweek. The FLSA salary threshold is the minimum salary employers must pay employees for them to be exempt from overtime wages.

Reasonable Cause : Reasonable cause is based on all the facts and circumstances in your situation. The IRS will consider any reason which establishes that you used all ordinary business care and prudence to meet your federal tax obligations but were nevertheless unable to do so.

Sole Proprietor: A business that legally has no separate existence from its owner. The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.

TIN: A Taxpayer Identification Number is an identifying number used for tax purposes in the United States and in other countries under the Common Reporting Standard. In the United States, it is also known as a Tax Identification Number or Federal Taxpayer Identification Number.

TIN Match Program: TIN Matching is part of a suite of Internet-based pre-filing e-services that allows “authorized payers” the opportunity to match 1099 payee information against IRS records prior to filing information returns.

Tax Gap: The gross tax gap is the difference between true tax liability for a given tax year and the amount that is paid on time. It is comprised of the nonfiling gap, the underreporting gap, and the underpayment (or remittance) gap.

Transaction: In QuickBooks, a transaction type identifies what kind of transaction occurred, such as a customer transaction, bill payment or a bank transfer. When you submit a transaction, you type in a transaction code to represent it.

Transmitter Control Code (TCC): The Transmitter Control Code (TCC) is an identifier that the IRS uses to distinguish different electronic filing companies. It's necessary when you need to file for a correction. Getting a TCC depends on how you file your 1099 forms

Travel Expense: Travel expenses are costs associated with traveling for the purpose of conducting business-related activities. Travel expenses can generally be deducted by employees as non-reimbursed costs incurred while traveling away from home specifically for business purposes.

Vendor: A vendor is a person or business that supplies goods or services to a company. Another term for the vendor is the supplier. In many situations, a company presents the vendor with a purchase order stating the goods or services needed, the price, delivery date, and other terms.

Wage: A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.