Articles and Tax Tips

In order for B-Notice backup withholding to end, the payee must provide the appropriate documentation. If the backup withholding resulted from failure to respond to a First B-Notice, the payee must provide...

The "eyeball test" is found in Section 1.6049-4(c)(1)(ii) of the tax regulations, and allows you to use documentation other than the Form W-9 to determine a company's exempt status. However, you need to exercise caution when "eyeballing" it…

You only need to report a prize or award when...

You are required to obtain a Form W-9 signed under penalty of perjury when...

By the time you get done with your year end review process and sending out payee statements you may be tempted to take some short cuts. Although such an impulse would be understandable don't make crucial filing errors because you relaxed too soon. The IRS is very particular about how you file, not just when you file.  

Reporting lease payments is always tricky. In particular third party payors often struggle with the difference between capital leases and operational leases. This leads to multiple questions regarding identification and reporting.

The majority of states have some type of Form 1099 equivalent, although only for work performed in that state or paid to residents of that state.

Payments of U.S.-source income to non-U.S. persons are reportable on Form 1042-S and subject to 30% withholding. Seems simple enough, but it can get tricky real fast when one considers that the IRS applies different sourcing rules to different types of income....

Just because a payment has a fancy title does not change the fact the IRS regards it as a payment made for services performed.

 
For instance, let's say your organization had an expert give a speech and then decided to pay that expert an "honorarium". Guess what, the IRS still regards honorarium payments are compensation. But what does this mean for reporting purposes? What if the speaker was an employee? A non-employee? A non-U.S. person? 

Regrettably, situations like this are all too common. In addition, they are often made more difficult to deal with when issues crop up in regards as to how you should report payments made to the deceased employee for amounts includible in income. Let’s take such a situation one step at a time. For your reporting purposes the key will be in when the payment is made.