What Is The Purpose Of This Notice?
The IRS posted a new release1 today notifying filers of the following information returns that they will receive a notice if missing or incorrect information was filed:
Form 1099-B, Proceeds from Broker and Barter Exchange Transactions
Form 1099-DIV, Dividends and Distributions
Form 1099-G, Certain Government Payments
Form 1099-INT, Interest Income
Form 1099-K, Payment Card and Third-Party Network Transactions
Form 1099-MISC, Miscellaneous Income
Form 1099-NEC, Nonemployee Compensation
Form 1099-OID, Original Issue Discount
Form 1099-PATR, Taxable Distributions Received from Cooperatives
Form W-2G, Certain Gambling Winnings
These notices are sent twice a year. The initial mailing is in September or October and the second mailing is in April.
Today's release is notifying filers of the second mailing of the notice for missing/incorrect information returns for 2021.
The notice will include:
- what is missing on the information return you filed and/or
- what is missing on the information return you filed and,
- a list of payers with identified TIN (taxpayer information number) issues
- a list of persons receiving certain types of income payments with identified TIN issues
- your responsibilities for backup withholding
To correct this issue, the IRS suggests that payers compare the accounts listed on the notice with their account records and correct or update their records, if necessary. They mention that this can include correcting backup withholding requirements on payments made to payees.
The payments that you reported on the information returns listed above are subject to backup withholding in the following situations:- The payer does not have the payee's TIN when making the reportable payments.
- The payee does not certify their TIN as required for reportable interest, dividend, broker and barter exchange accounts.
- The IRS notifies the payer that the payee furnished an incorrect TIN and the payee does not certify their TIN as required.
- The IRS notifies the payer to begin backup withholding because the payee did not report all their interest and dividends on their tax return.
Payers remain liable for the amount they failed to backup withhold, and penalties may apply and the penalties for information returns errors can be steep!
What can you do now? Continue reading this blog to learn more about what you can do right now if you received this notice and how to avoid this problem and the associated penalties in the future.
What Are Latest Developments Relevant To Me?
No new developments at this time. However, if you have received this form and need help, contact us today for a preliminary plan of action that considers your tax situation and maximizes the relief that you qualify for. You can also, download our free eBook to learn more about what you can do right now if you received this notice, and how to avoid this problem and the associated penalties in the future.
Want a heads up if notices may be coming your way? We can do that for you, visit The Tax Monitor page for more information.
What Does The Notice Look Like?
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