On Demand Webinar

Form 1099 Due Diligence: Avoid Costly Mistakes

Webinar Details $219

  • Rated:
  • Webinar Length: 100 Minutes
  • Guest Speaker:   Steven Mercatante
  • Topic:   Taxation and Accounting
  • Credit:   CPE 2.0, ATATX 2.0
All Access Membership

The seemingly never-ending and complicated changes to the 1099 forms require you to stay diligent. Reporting issues are commonly a top priority and there is no better way to stay up to date on the issues, exercise best practices, practice due diligence, and avoid costly mistakes. The IRS thinks Forms 1099 are important. They asked and Congress agreed to increase the failure to timely file and the failure to file a correct Information Return penalties for Forms filed. This webinar will go over developing a best practices manual and includes helpful hints on ways to avoid potential penalties and those time consuming “B” Notices.

What better way to prepare for the coming Form 1099 filing season that to learn current preparing and filing guidelines, along with the latest helpful hints.

Current Topics:

  • What’s New – Filing Dates
  • What’s New – Penalty Increases and Abatements
  • Compliance Responsibility of Income Tax Preparer
  • Compliance Responsibility of Payer
  • Definition of Due Diligence

Forms 1099:

  • Identifying Types of Payments Requiring 1099s
  • Identifying Types of Entities Who Should Receive a 1099
  • Most Common 1099 Mistakes
  • Use IRS e-Services to Avoid TIN and Name Matching Problems

Level: Basic
Format: Live webcast
Instructional Method: Group: Internet-based
NASBA Field of Study: Taxes 
Program Prerequisites: None
Advance Preparation: None

  1. Introduction 
  2. What’s New - The Tax Gap 00:01:12
  3. What’s New - 2022 Final Rules 00:06:22
  4. What’s New: 1099 NEC and 1099 MISC 00:33:49
  5. The Form 1099 NEC Box One -  Reportable Payments 00:39:36
  6. The Form 1099 NEC Box One - Payment Examples 00:41:21
  7. 1099 NEC Box One: Expense Reimbursements, Accountable Plans, T&E, Fringe Benefits 00:42:20
  8. The Form 1099 NEC Box One - Watch Out For 00:48:01
  9. 1099-MISC Box One Issues 00:51:12
  10. 1099-MISC Box Two Issues 00:52:57
  11. 1099-MISC Box Three Issues 00:53:46
  12. 1099-MISC Box Six Issues 00:56:54
  13. 1099 MISC Boxes 12 and 14 vs. 1099 NEC Box One Director’s Payments 00:56:59
  14. The Form 1099-MISC is Still Big But Not the Whole Show - Nonreportable Payments 00:58:33
  15. The “Other 1099’s”: The 1099 K vs. The 1099 MISC/NEC 00:59:08
  16. The “Other 1099’s”: The 1099 R vs. the 1099 MISC/NEC 01:03:30
  17. The “Other 1099’s”: The 1099 INT, 1099 B, 1099 DIV, 1099 C vs. the 1099 MISC/NEC 01:05:19
  18. 1099 Due Diligence Starts With The W 9 01:09:34
  19. 1099 Due Diligence Starts With The W 9: Name and TIN “Cheat Sheet” 01:14:12
  20. 1099 Due Diligence Starts With The W 9: Name and TIN “Cheat Sheet” Cont’d 01:14:30
  21. 1099 Due Diligence Starts With The W 9 - When to Get an Updated Form W 9 01:14:39
  22. 1099 Due Diligence Starts With The W 9 - Payee Refuses to Provide a TIN 01:16:56
  23. Validating Data - Identifying Your Payment: Exempt Payments 01:19:26
  24. Validating Data - Identifying Your Payee 01:20:04
  25. Validating Data - U.S. Persons 01:20:34
  26. Validating Data - W-9 Red Flags for Non U.S. Payees 01:21:18
  27. Validating Data - Problem Payees - Quick Review 01:23:44
  28. Validating Data - Problem Payees - The LLC 01:24:24
  29. Validating Data - Problem Payees - The LLC as the Disregarded Entity 01:25:77
  30. Validating Data - The Exempt Organization - Tax Exempt Organization Search Tool 01:25:54
  31. Validating Payee Data - TIN Match Program 01:26:22
  32. Validating Payee Data - TIN Match Program - The W-9 and Vendors 01:27:39
  33. Validating Payee Data - TIN Match Program - Using The Tool 01:28:16
  34. Validating Payee Data - TIN Match Program - Delegated Authority 01:28:47
  35. Watch Out For The Middleman 01:28:58
  36. Backup Withholding Tips 01:30:50
  37. Backup Withholding Tips - Four Triggers 01:31:29
  38. Backup Withholding Tips - IRS Expectations 01:31:41
  39. Corrections Tips - Reasons Why 01:31:50
  40. Corrections Tips - Corrected Returns 01:33:25
  41. Corrections Tips - Proposed Penalties 01:33:36
  42. B-Notice Response Best Practices - B-Notice Reasons 01:32:50
  43. B-Notice Response Best Practices - Notice Dates 01:33:17
  44. B-Notice Response Best Practices - 1st Notice 01:33:32
  45. B-Notice Response Best Practices - 2nd Notice 01:34:40
  46. Protect Yourself 01:35:07
  47. Attendee Questions 01:35:35
  48. Presentation Closing 01:39:49

  • Accountable Plan 00:42:48
  • Audit 00:01:41
  • Backup Withholding 00:40:30, 01:09:52, 01:14:57, 01:17:08, 01:30:50, 01:34:00
  • B-Notice 00:01:42, 01:15:19
  • DBA -Doing Business As 01:11:10
  • Deferred Compensation 00:57:46
  • De Minimis 00:46:33
  • Disregarded Entity 01:10:32
  • EIN 01:16:28, 01:21:39
  • Exempt 01:19:33
  • Expense Reimbursement 00:42:25
  • Fair Market Value (FMV) 00:53:46
  • FATCA 00:36:29, 01:12:18
  • FIRE - File Information Returns Electronically 00:06:34, 00:13:02, 00:17:35, 00:30:41
  • Form 1042 00:16:21
  • Form 1042-S 00:16:22, 01:20:22
  • Form 1099-B 01:06:52
  • Form 1099-C 01:08:01
  • Form 1099-DIV 01:07:37
  • Form 1099-INT 00:16:10, 00:38:00, 01:05:27
  • Form 1099-K 00:37:59, 00:59:20
  • Form 1099-MISC 00:16:07, 00:33:53, 00:58:11
  • Form 1099-NEC 00:16:07, 00:33:53, 00:39:36, 00:51:42, 00:58:07
  • Form 1099-OID 01
  • Form 1099-PATR 01
  • Form 1099-R 01:03:30
  • Form 1099-S 00:53:12
  • Form 4419 00:07:36, 00:19:35, 00:28:52
  • Form 8832 01:24:47
  • Form 945 00:56:19, 01:18:38
  • Form 945 01:31:10
  • Form 990 01:26:17
  • Form W-9 00:48:40,01:09:39, 01:13:12
  • Fringe Benefits 00:42:21
  • IRC 6050W 01:00:41
  • IRC Section 3406(a) 00:04:31
  • IRC Section 409A 00:57:53, 01:17:01
  • IRC Section 6041(a) 00:04:31
  • IRC Section 6109(a)(2) 00:04:31
  • ITIN 01:21:38
  • Limited Liability Company (LLC) 01:10:48, 01:24:24
  • Nonresident Alien (NRA) 00:16:28, 01:20:14
  • Resident Alien 01:20:45
  • Safe Harbor 00:07:21
  • Sole Proprietor 01:11:41, 01:16:41
  • Tax Exempt Organization Search Tool 01:26:09
  • Tax Gap 00:01:20
  • TIN 00:27:07, 01:09:49
  • TIN Match Program 01:26:26
  • Transmitter Control Code (TCC) 00:07:29, 00:12:14, 00:17:51
  • Vendors 01:13:08, 01:26:44

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.

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)

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: Too trivial or minor to merit consideration.

Deferred Compensation: Deferred compensation is an arrangement in which a portion of an employee's income is paid out at a later date after which the income was earned. Examples of deferred compensation include pensions, retirement plans, and employee stock options. (en.wikipedia.org)

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)

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 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 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: Form 1042, also "Annual Withholding Tax Return for U.S. Source Income of Foreign Persons", is used to report tax withheld on certain income of foreign persons.

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 1099-B: Proceeds From Broker and Barter Exchange Transactions is an Internal Revenue Service (IRS) tax form that is issued by brokers or barter exchanges. The form lists the gains or losses of all broker or barter exchange transactions.

Form 1099-C: According to the IRS, nearly any debt you owe that is canceled, forgiven or discharged becomes taxable income to you. You'll receive a Form 1099-C, "Cancellation of Debt," from the lender that forgave the debt.

Form 1099-DIV : Form 1099-DIV: Dividends and Distributions is an Internal Revenue Service (IRS) form sent to investors who receive distributions from any type of investment during a calendar year. Investors can receive multiple 1099-DIVs. Each Form 1099-DIV should be reported on an investor's tax filing.

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-K: A payment settlement entity (PSE) must file Form 1099-K for payments made in settlement of reportable payment transactions for each calendar year. A PSE makes a payment in settlement of a reportable payment transaction, that is, any payment card or third party network transaction, if the PSE submits the instruction to transfer funds to the account of the participating payee to settle the reportable payment transaction.

Form 1099-MISC: The Form 1099-MISC is an Internal Revenue Service (IRS) tax return document used to report miscellaneous payment?s 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-OID: Form 1099-OID is a tax form intended to be submitted to the Internal Revenue Service by the holder of debt instruments which were discounted at purchase to report the taxable difference between the instruments' actual value and the discounted purchase price.

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 1099-R: Form 1099-R is a tax form from the Internal Revenue Service (IRS) for reporting distributions from annuities, profit-sharing plans, retirement plans, IRAs, insurance contracts, or pensions.

Form 1099-S: A Form 1099-S is a tax document used to ensure that the full amount received for a real estate sale of some kind is accurately reported. A 1099-S can also be used to report income made on a rental property or investment property. For selling real estate, the buyer must complete and file their own 1099-S.

Form 4419: Form 4419 is mandated to be electronically filed when requesting an original TCC (first-time application).

Form 8832: Form 8832 is the Entity Classification Election form from the IRS. It is filed to elect a tax status other than the default status for your entity. For example, an LLC can elect to be taxed as a C Corporation.

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 990 : Form 990 (officially, the "Return of Organization Exempt From Income Tax") is a United States Internal Revenue Service form that provides the public with financial information about a nonprofit organization. It is often the only source of such information.

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.

Golden Parachute Payments: Golden parachute payments are payments of compensation made to individuals whose companies experience a change in control

IRC 6050W : Section 6050W requires information returns to be made for each calendar year by merchant acquiring entities and third party settlement organizations with respect to payments made in settlement of payment card transactions and third party payment network transactions occurring in that calendar year.

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 409A: Section 409A of the United States Internal Revenue Code regulates nonqualified deferred compensation paid by a "service recipient" to a "service provider" by generally imposing a 20% excise tax when a certain design or operational rules are contained in the section are violated.

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.

ITIN : An Individual Taxpayer Identification Number is a United States tax processing number issued by the Internal Revenue Service. It is a nine-digit number that begins with the number 9, and the 4th and 5th digits, also known as second section, range from 70 to 88, 90 to 92 and 94 to 99.

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.

Nonresident Alien (NRA): This income is taxed at a flat 30% rate, unless a tax treaty specifies a lower rate. Nonresident aliens must file and pay any tax due using Form 1040NR, U.S. Nonresident Alien Income Tax Return or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents.

Resident Alien : A resident alien is a foreign person who is a permanent resident of the country in which he or she resides but does not have citizenship. To fall under this classification in the United States, a person needs to either have a current green card or have had one in the previous calendar year.

Safe Harbor: A safe harbor is a provision of a statute or a regulation that specifies that certain conduct will be deemed not to violate a given rule. It is usually found in connection with a vaguer, overall standard. Under the safe harbor, a “rental real estate enterprise” is treated as a trade or business for purposes of Sec. 199A if at least 250 hours of services are performed each tax year with respect to the enterprise. ... The safe harbor requires that separate books and records be maintained for the rental real estate enterprise.

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 Exempt Organization Search Tool: Tax Exempt Organization Search helps users find information about a tax-exempt organization’s federal tax status and filings.

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.

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

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.

Guest Speaker

  • Steven Mercatante

CPE Credit

Continuing Professional Education

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ATATX Credit

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