Articles and Tax Tips

The IRS has made another late in the game update: this time to the Form 1042 instructions. This follows on October and November 1042/1042-S updates (detailed in the recently released 2014 Filing and State Reporting Guide) that are leaving AP professionals scrambling to respond.

If you are generating revenue from business operations in a particular U.S. state then there is a high likelihood that you are triggering state tax reporting requirements. But how do you know? Here is some guidance detailing what you should look for:

When validating data on collected Forms W-8 remember the IRS expects that you will approach the documentation with certain “presumptions” in mind. This week let's take a further look at this key validation and reporting issue. 

Form 1099-MISC Box 14 comes into play in those situations where your organization has been involved in a legal action and a settlement payment is forthcoming. But be careful in how you use this box, as not all attorney reporting can be done via box 14.

In terms of your Form 1099 reporting you have two key initial tasks. Identifying your payee and identifying the payment type. This week let's look at two types of payments typically considered exempt (freight and goods) and discover when in fact they are not exempt from reporting.

Earlier this year the IRS created a new Form W-8BEN for individuals and released associated instructions. Let's look at one very big potential due diligence/compliance problem you face when a payee provides a Foreign Tax Identification number to claim treaty benefits. 

Requesting the IRS waive a proposed penalty (IRS Form 972-CG Proposed Penalty Notice) is one of the most important compliance tasks you can take. This week let's examine how your compliance history fits into your attempts to waive a proposed penalty.