Understanding Information Returns

An Information Return is a tax form used to report to the federal government, non-payroll related payments made from a business, agency or person to another person or company. You also must furnish copies of the information returns to recipients for payments reported. Failure to file the information returns by specified due dates could result in huge penalties. This also applies to not providing copies of the forms to designated recipients. The IRS can increase penalties for failing to file or provide them all together.

The IRS requires an employer who has 250 or more information returns to file, to e-file them using the IRS FIRE System. Continue reading Understanding Information Returns

Information Returns – Form 1099 Series, part 2

Form 1099-CAP, Changes in Corporate Control and Capital Structure

This form is used to report to stakeholders the acquisition of controlling interest of a company of if is a company underwent a substantial change in the capital structure.  Often accompanies Form 8806, Information Return for Acquisition of Control or Substantial Change in Capital Structure.

File this form for each person which apply to any of the following:

  • shareholders who receive cash, stock, or other property from an acquisition of control or a substantial change in capital structure.

Corporations do not file Form 1099-CAP under one of the following conditions.

  • The transaction involves the acquisition of control within an affiliated group or involves stock valued at less than $100 million.
  • The corporation makes the consent election on Form 8806. Under the election, the corporation is not required to file Form 1099-CAP with respect to shares held by a clearing organization because it allows the IRS to publish information necessary for brokers to meet their reporting obligations.
  • The corporation properly reports the transaction under section 6043(a).
  • Information returns are filed under section 6042 (Form 1099-DIV) or section 6045 (Form 1099-B) unless the corporation knows or has reason to know that such returns were not filed.

Click here for more information from the IRS about Form 1099-CAP. Continue reading Information Returns – Form 1099 Series, part 2

Information Returns – Form 1099 Series, Part 1

No matter if you are a large corporation or a small business owner, chances are you will need to file an information return of some sort each year. It is not always easy to determine which form is needed for which situation. We have broken down the Form 1099 series to help provide a description of the forms and to which situations they are used.

To help simplify the process, we will be breaking down the information return forms for you. We decided to begin with the Form 1099 series. Continue reading Information Returns – Form 1099 Series, Part 1