On Demand Webinar

Form 1099 Due Diligence: Avoid Costly Mistakes

Please see below for additional instructions and information regarding this program.

Webinar Details$219

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
  1. Introduction

  2. What’s New 00:01:09

  3. What’s New - The 2020 1099-NEC 00:06:09

  4. What’s New - The 2020 Form 1099-MISC 00:20:52

  5. 1099 Reporting Starts With The W-9 00:32:46

  6. When to Get an Updated Form W-9 00:34:52

  7. Payee refuses to Provide TIN 00:37:23

  8. Getting Ready to File: Your Baseline 00:37:49

  9. Validating Data - Identifying Your Payment: Exempt Payments 00:38:07

  10. Validating Data - Identifying Your Payee: How to Know Who’s Who 00:39:31

  11. Validating Data - U.S. Persons 00:41:21

  12. Validating Data - W-9 Red Flags for Non-U.S. Payees 00:42:41

  13. Validating Data - Problem Payees - Quick Review 00:43:40

  14. Validating Data - Problem Payees - The LLC 00:44:32

  15. Validating Data - Problem Payees - The LLC as the Disregarded Entity 00:46:03

  16. Travel & Expense Rules Under Accountable Plans 00:46:54

  17. Validating Data - The Exempt Organization 00:50:40

  18. Validating Payee Data - TIN Match Program 00:52:23

  19. Validating Payee Data - TIN Match Program - W-9 & Vendors 00:53:18

  20. Validating Payee Data - TIN Match Program (cont’d) 00:54:29

  21. Validating Payee Data - TIN Match Program (cont’d) 00:54:58

  22. Reporting - The Basics 00:57:40

  23. Common 1099 Mistakes: The Middleman 01:00:44

  24. Common 1099 Mistakes: Backup Withholding 01:02:50

  25. Common 1099 Mistakes: Backup Withholding - Four Triggers 01:05:29

  26. Common 1099 Mistakes: Backup Withholding (cont’d) 01:06:09

  27. Common 1099 Mistakes: Backup Withholding - Example 01:08:04, 01:08:38, 01:08:55

  28. Common 1099 Mistakes: Backup Withholding - Form 945 01:09:20

  29. Common 1099 Mistakes: Backup Withholding - Form 945 (cont’d) 01:11:22

  30. Common 1099 Mistakes: Backup Withholding - Attorney & Settlement Reporting 01:11:38

  31. Common 1099 Mistakes: Backup Withholding - Attorney & Settlement Reporting - Special Rules 01:14:41

  32. Common 1099 Mistakes: Fringe Benefits and Expense Reimbursements 01:15:50

  33. Common 1099 Mistakes: Rent, Prizes and Awards, Medical Services & Board of Directors 01:18:03

  34. Common 1099 Mistakes: The 1099-R 01:22:32

  35. Common 1099 Mistakes: The 1099-INT 01:24:16

  36. Common 1099 Mistakes: The 1099-K 01:24:57

  37. Protect Yourself 01:27:18

  38. Attendee Questions 01:28:31

  39. Presentation Closing 01:40:25

  • 1035 Exchanges 01:22:45
  • 1099-NEC 00:01:31, 00:06:29, 00:11:04, 01:20:42
  • 401(k) 00:11:41
  • 501(c)(3) 00:38:07:
  • 509(a)(a) 00:38:07
  • Backup Withholding 00:17:18, 00:25:27, 01:05:49
  • B-Notice  00:34:52, 00:52:59, 01:03:33
  • C-Notice 01:05:43
  • CP-2100 01:03:42
  • CP2100-A 01:03:43
  • DBA 00:33:19
  • Disregarded Entity 00:33:32, 00:46:07
  • D-Notice 01:05:43
  • EIN  00:34:52, 00:42:51
  • Expense Reimbursement 00:14:49
  • FACTA 00:34:23
  • Form 1042-S 00:42:31
  • Form 1098-F 00:01:41
  • Form 1099-B 00:52:23
  • Form 1099-DIV  00:52:23
  • Form 1099-INT 00:52:23, 01:14:40, 01:24:16
  • Form 1099-K 00:39:08,  01:24:57
  • Form 1099-LS 00:02:01
  • Form 1099 MISC 00:01:29, 00:06:38, 00:52:23, 01:18:36
  • Form 1099-OID 00:52:23
  • Form 1099-PATR 00:52:23
  • Form 1099-R 01:22:32
  • Form 1099-S 01:19:00
  • Form 8832 00:45:12
  • Form 941 01:09:20
  • Form 945 01:09:21
  • Form 945-A 01:09:21
  • Form 990  00:50:40
  • Form W-9 00:32:48, 00:44:35, 00:54:13
  • Fringe Benefits 00:14:48, 01:15:50
  • IRC 6050W 00:38:07
  • IRC Section 3406(a) 00:01:09, 01:02:50
  • IRC Section 6041(a) 00:01:09
  • IRC Section 6109(a)(2) 00:01:09
  • IRS Notice 972CG 00:54:29
  • Limited liability company (LLC) 00:33:58, 00:44:37
  • Nonqualified Deferred Compensation (NQDC) 01:18:03
  • PATH Act 00:08:49
  • Resident Alien 00:41:30
  • Sole Proprietor 00:33:48
  • Tax Cut and Jobs Act 00:42:28, 01:16:12
  • Tax Exempt Organization Search Tool 00:51:14
  • Tax Gap 00:01:09
  • TIN 00:35:25, 01:03:27
  • TIN Match Program 00:52:26

1035 Exchanges: A 1035 exchange is a provision in the tax code which allows you, as a policyholder, to transfer funds from a life insurance, endowment or annuity to a new policy, without having to pay taxes.

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.

401(k): In the United States, a 401(k) plan is the tax-qualified, defined-contribution pension account defined in subsection 401(k) of the Internal Revenue Code.

501(c)(3): A 501(c)(3) organization is a corporation, trust, unincorporated association, or other type of organization that is exempt from federal income tax under section 501(c)(3) of Title 26 of the United States Code. It is the most common type of the 29 types of 501(c) nonprofit organizations in the United States. (en.wikipedia.com)

509(a)(a): Primarily includes churches, schools, hospitals, and other organizations that receive their public support primarily from gifts, grants and contributions from a broad group of people.

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)

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.

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. Large volume filers will receive a CD or DVD data file CP2100, mid-size filers receive a paper CP2100, and small filers receive a paper CP2100A.

CP2100-A: 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. Large volume filers will receive a CD or DVD data file CP2100, mid-size filers receive a paper CP2100, and small 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."

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)

D Notice: If you received an LT16 A/D notice, it's because he IRS is trying to collect unpaid taxes from you and/or their files show they're missing tax returns from you. It is essential that you take action in order to avoid potential enforcement action, which can include seizing your assets or wages. Enforcement action could also include the filing of a notice of federal tax lien, which could affect your credit score and ability to borrow.

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.

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 1098-F: This form will be used by a government or government entity to report fines, penalties, and other amounts to recipients who paid those amounts. This new form is a result of the Tax Cuts and Jobs Act because of a new provision in the tax law that greatly expands the scope of the disallowance of deductions for fines and penalties paid to government agencies. The new law disallows a tax deduction for any payment made to a government entity where the payment was made in relation to a violation of law or the investigation of a violation. Additionally, it also disallows deductions for payments made to third parties at the direction of a government agency.

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-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-LS : File Form 1099-LS if you are the acquirer of any interest in a life insurance contract in a reportable policy sale. An acquirer is any person that acquires an interest in a life insurance contract (through a direct acquisition or indirect acquisition of the interest) in a reportable policy sale.

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-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 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 941: Federal form 941, also called a quarterly federal tax return, is an IRS return that employers use to report their FICA taxes paid and owed for the period. The IRS uses this form to calculate the amount of employer tax payments made during the year as well as the amount of taxes due at the end of the 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 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.

IRC Section 3406(a): Requires that, under certain circumstances, including failure ot payee 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.

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.

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.

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)

PATH Act: The Protecting Americans from Tax Hikes (PATH) Act was created to protect taxpayers and their families against fraud and permanently extend many expiring tax laws. The law, which was enacted in December of 2015, affects the timing of certain refunds filed before February 15, 2017.

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.

Tax Cuts and Jobs Act: The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, Pub.L. 115–97, is a congressional revenue act of the United States originally introduced in Congress as the Tax Cuts and Jobs Act, that amended the Internal Revenue Code of 1986.

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.

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.


Guest Speaker

Steven Mercatante

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 webinars for Convey Compliance Systems, IAPP, Balance Consulting, The Accounts Payable Network, Accounts Payable Now and Tomorrow, Progressive Business Conferences, The Center For Competitive Management,... View Full Profile


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