The IRS has recently handed down a decision to eliminate automatic extensions for Form 1099-MISC for all businesses. This new decision also states that individual requests with sufficient cause made directly to the IRS may have some difficulty with earning approval.
This regulation is the result of an increase in fraudulent tax returns and identity theft in recent years. The IRS is aiming to catch fraudulent filings by eliminating automatic extensions and tightening the deadlines for filing submissions. This will allow them to compare all payment claims made with individual TIN numbers.
This means all reporting must be submitted by January 31, 2019. Each late submission is subject to a fine between $100 and $260 per form.
In order to avoid potential penalties, BoomTax suggests that you proactively keep track of your submission data by using our Form 1099-MISC Excel spreadsheet so that it’s ready to drag and drop into your BoomTax account when Tax Year 2018 filing becomes available.
Other ways to help you be prepared for tax reporting include:
- Requesting TIN information from recipients via Form W-9 as soon as possible.
- Verifying that TIN information ahead of time using TINCorrect.