Here’s hoping that the slightest mistake on your company’s 1099s won’t send you back to the drawing board.
Recently, U.S. Rep. Jim Renacci (R-OH) and U.S. Rep. John Carney (D-DE) introduced bipartisan legislation – Information Reporting Simplification Act of 2015 (H.R. 3856) – to provide a safe harbor eliminating the need to correct small dollar errors made on information returns and payee statements.
Under the terms of the proposal, errors of no more than $100 ($25 for tax reported withheld) would be considered as correct, and your company wouldn’t have to file an amended form.
Under current law, unnecessary burdens are placed on taxpayers, the IRS, and businesses in correcting minor errors on information returns and payee statements, Renacci said in a press release. According to the National Taxpayer Advocate, without a safe harbor, there were over 90 million corrected or amended Forms W-2 and 1099 filed in 2011 alone.
“As a CPA and former business owner, I understand that this safe harbor is not only a win for taxpayers, but also benefits the IRS and businesses that file information returns,” Renacci said. “Our bill relieves the burden on taxpayers who face new costs in preparing and filing amended returns as a result of receiving amended statements with small dollar corrections; on the IRS who must process all of the minimal corrections and amended returns; and on businesses which must reprocess forms, print and mail new statements, and submit new forms to taxpayers and the IRS.”
We’ll keep you posted on the bill’s progress.