Form 1099 Due Diligence: Avoid Costly Mistakes

Live Webinar

Webinar Details $219

  • Webinar Date: June 10, 2024
  • Webinar Time: 2:00pm - 3:40pm EDT   live
  • Webinar Length: 100 Minutes
  • Guest Speaker:   Steven Mercatante
  • Topic:   Taxation and Accounting
  • Credit:   CPE 2.0, ATATX 1.5, IRS 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. W-9 Overview and What’s New: 1099 E-Filing Changes 00:01:24
  3. 1099-NEC 00:18:14
  4. 1099-MISC 00:21:42
  5. 1099-MISC Box One 00:25:15
  6. 099-MISC Box Two 00:26:26
  7. 1099-MISC Box Three 00:26:50
  8. 1099-MISC Box Four 00:27:44
  9. 1099-MISC Box Six 00:29:34
  10. The “Other 1099’s”: The 1099-K 00:30:50
  11. The “Other 1099’s”: The 1099-R 00:37:44
  12. The “Other 1099’s”: The 1099-INT 00:41:45
  13. The “Other 1099’s”: The 1099-B 00:42:34
  14. The “Other 1099’s”: The 1099-DIV 00:45:14
  15. The “Other 1099’s”: The 1099-C 00:45:24
  16. 1099’s Start With The W-9 00:48:30
  17. 1099’s Start With The W-9 - When to Get an Updated Form W-9 00:53:46
  18. 1099’s Start With The W-9 - Payee Refuses to Provide a TIN 00:59:59
  19. Validating Data - Identifying Your Payment: Exempt Payments 01:02:25
  20. Validating Data - Identifying Your Payee 01:03:05
  21. Validating Data - U.S. Persons 01:06:01
  22. Validating Data - W-9 Red Flags for Non-U.S. Payees 01:07:12
  23. Validating Data - Problem Payees - Quick Review 01:09:57
  24. Validating Data - Problem Payees - The LLC 01:11:13
  25. Validating Data - Problem Payees - The LLC as the Disregarded Entity 01:12:35
  26. Validating Data - Tax Exempt Organization Search Tool 01:13:34
  27. Validating Payee Data – TIN Match Program 01:16:14
  28. Validating Payee Data – TIN Match Program - Vendors 01:17:50
  29. Validating Payee Data – TIN Match Program - Using The Tool 01:18:05
  30. Validating Payee Data – TIN Match Program - Delegated Authority 01:18:48
  31. Watch Out For The Middleman 01:19:51
  32. Protect Yourself 01:33:38
  33. Attendee Questions 01:35:52
  34. Presentation Closing 01:41:15

  • Audit 00:12:13, 01:03:42
  • Backup Withholding 00:03:02, 00:27:45, 00:49:02, 01:00:05, 01:13:20
  • B-Notice 00:03:36, 00:12:10
  • Disregarded Entity 00:50:21, 01:12:35
  • Due Diligence 00:01:38, 00:02:03, 00:04:35, 00:18:31, 00:26:22, 00:48:31, 00:56:54, 01:02:24, 01:18:53
  • EIN 00:58:24
  • Fair Market Value (FMV) 00:26:50
  • FATCA 00:22:02, 00:37:55, 00:49:05, 00:53:09
  • FIRE - File Information Returns Electronically 00:06:47, 00:09:55
  • Form 1042-S 00:26:14,  01:03:45, 01:07:32
  • Form 1099-B 00:42:34
  • Form 1099-C 00:45:26
  • Form 1099-DIV 00:44:22, 00:45:17
  • Form 1099-INT 00:19:09, 00:41:45
  • Form 1099-K 00:30:52, 00:32:54
  • Form 1099-MISC 00:19:07, 00:25:18, 00:26:33, 00:30:16, 00:39:44, 00:44:17
  • Form 1099-NEC 00:18:20, 00:23:33, 00:26:01, 00:39:44, 00:44:17
  • Form 1099-R 00:37:46, 00:40:31, 00:45:06
  • Form 8832 01:11:46
  • Form 945 00:27:44, 01:03:51
  • Form 990 01:13:59
  • Form W-8 00:13:07, 01:03:44
  • Form W-9 00:04:07, 00:13:33, 00:48:32, 00:53:17, 00:57:29, 01:01:40, 01:16:39
  • Gross Proceeds Payment 00:21:37
  • Information Returns Intake System (IRIS) 00:10:00
  • IRC 6050W 00:37:14
  • IRC Section 3406(a) 00:03:04, 01:00:09
  • IRC Section 6041(a) 00:02:44
  • IRC Section 6045 00:02:50
  • IRC Section 6109(a)(2) 00:02:55, 00:48:36, 01:00:15
  • IRC Section 6721 01:00:21
  • ITIN 01:07:54
  • Limited Liability Company (LLC)  00:19:49, 00:34:19, 00:51:59, 01:11:15
  • Nonresident Alien (NRA) 00:13:24, 01:08:00
  • Resident Alien 01:07:56
  • Sole Proprietor  00:34:17, 00:50:28, 00:58:31
  • Tax Exempt Organization Search Tool 01:13:53
  • TIN 00:03:22, 00:48:49, 00:50:13, 00:54:50, 01:00:05, 01:01:29, 01:07:43
  • TIN Match Program 01:16:21
  • Transmitter Control Code (TCC) 00:07:22
  • Unclaimed Property 00:40:29
  • Unrelated Business Income (UBI) 00:05:55
  • Vendors 00:02:53, 00:48:51, 00:57:39, 01:13:01

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)

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.

Cryptocurrency: A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a digital ledger or computerized database using strong cryptography to secure transaction record entries, to control the creation of additional digital coin records, and to verify the transfer of coin ownership.

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.

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.

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.

Flow-through Entity: A flow-through entity is a legal entity where income "flows through" to investors or owners; that is, the income of the entity is treated as the income of the investors or owners. Flow-through entities are also known as pass-through entities or fiscally-transparent entities.

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-DA: This form is specifically designed to handle the reporting for cryptocurrency and digital assets.

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 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-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 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-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-8: Form W-8 is filled out by foreign entities (citizens and corporations) in order to claim exempt status from certain tax withholdings. The form is used to declare an entity's status as non-resident alien or foreign national who works outside of the United States.

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

Gross Proceeds Payment: When a business sells an asset, whether tangible or intangible, it receives a payment, which is the gross proceeds. The amount includes the costs of production and other costs and expenses related to the transaction.

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.

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.

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.

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.

Non-Fungible Tokens (NFT): A non-fungible token is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio, and other types of digital files.

Nonqualified Deferred Compensation (NQDC): A nonqualified deferred compensation (NQDC) plan is an elective or non-elective plan, agreement, method, or arrangement between an employer and an employee (or service recipient and service provider) to pay the employee or independent contractor compensation in the future. (www.irs.gov)

Personal Property: Personal property is something that you could pick up or move around. This includes such things as automobiles, trucks, money, stocks, bonds, furniture, clothing, bank accounts, money market funds, certificates of deposit, jewels, art, antiques, pensions, insurance, books, etc.

Real Property: Real property is land and any property attached directly to it, including any subset of land that has been improved through legal human actions. Examples of real properties can include buildings, ponds, canals, roads, and machinery, among other things

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.

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.

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.

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

Unclaimed Property: Unclaimed property (sometimes referred to as abandoned) refers to accounts in financial institutions and companies that have had no activity generated or contact with the owner for one year or a longer period. Common forms of unclaimed property include savings or checking accounts, stocks, uncashed dividends or payroll checks, refunds, traveler's checks, trust distributions, unredeemed money orders or gift certificates (in some states), insurance payments or refunds and life insurance policies, annuities, certificates of deposit, customer overpayments, utility security deposits, mineral royalty payments, and contents of safe deposit boxes.

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