Due Diligence Steps for Form 1099 Compliance

This webinar will cover the latest updates for Form 1099-NEC and 1099-MISC, specific reporting requirements for various types of payments and payees, filing requirements, withholding requirements, and reporting guidelines. It will cover important changes to the filing due dates and the new safe harbor requirements for de minimis dollar amount errors.

It will also cover penalty provisions and exceptions to the penalties, due diligence procedures, exceptions to penalties including reasonable cause, common errors, and correction of errors.

The changes in reporting requirements can be confusing and the IRS has recently made changes to reporting, error correction, and filing due date requirements. Accounts payable professionals, managers, and withholding agents need to be aware of the changes in order to avoid non-compliance and penalties. 

For non-compliance, penalties have recently been increased. In order to stay compliant, practitioners must know which form to use to report specific transactions, when these forms must be filed or furnished to recipients in order to be on-time, what information should be included and how to make sure it is accurate, how and when to make corrections, how to avoid or mitigate errors, whether a particular payee is subject to backup withholding or transaction reporting, and the due diligence procedures that shield an issuer from penalties, even when the forms contain incorrect information.

The learning objectives are as follows: 

• W-9 Procedures
• Overview of various Forms 1099
• IRS TIN Matching Program
• Developing best practices for the preparation of Forms 1099
• Potential penalties for payer and tips to avoid penalties
• Know when to furnish and file information returns under the new requirements
• Understand the new De Minimis error rules
• Identify reportable payments and payees. Know when 1099 is required
• Be aware of common 1099 errors: Know how to avoid them and correct them
• Understand backup withholding: What it is, when to start and stop, how to deposit as well as report
• Understand the procedures for “B” notices: When to issue and how to follow-up
• Know when the payment card rules apply and how 1099 reporting is affected
• Understand how to document independent contractor as reportable or non- reportable
• Know the procedures and policies that establish “reasonable cause” and avoid penalties

• Reminders & What’s New
• Information Returns
• A walk-through Form 1099-MISC
• Correcting Errors
• SSN, TIN, EIN
• TIN Solicitation & “B” Notices
• TIN Verification
• Backup Withholding

Due diligence steps for Form 1099 compliance are integral to maintaining financial transparency and fulfilling legal obligations. Businesses that prioritize these steps not only mitigate the risk of penalties but also contribute to a more efficient and accurate tax reporting process. As regulations evolve, staying proactive in understanding and implementing due diligence measures becomes paramount for sustained compliance.