Articles and Tax Tips

By Steven D. Mercatante Esq.
 
Publication 1220 should be the starting point for anyone looking to learn about the basics of Form 1099 filing. The following article will examine why and highlight what it is that makes Publication 1220 so effective in making your filing season easier and reducing corrections.

By Steven D. Mercatante Esq.
 
Among your other job duties as an information reporter there is one that typically ranks at the top; avoiding risk. Risk is inherent in doing business therefore, the need to minimize risk is essential to maximizing organizational goals. If you fail to meet regulatory standards you are setting up your organization for unnecessary exposure to risks.
 
When it comes to regulatory compliance and setting internal controls these are goals mandated by the federal government for almost all organizations. Such goals are not optional and if you make a mistake because you were lax in your compliance efforts you will eventually get zapped. Among the risk that can cause the greatest pain there is one that ranks higher than just about any other does. The following article will identify what this risk and offer you some practical advice on how to mitigate just such a risk.
 
Incorrectly classifying your workers - a move ranking among the riskiest you can take. Among other things, you can face substantial fines as a repercussion for misclassifying workers as contractors when they are in fact employees. But why?

By Steven D. Mercatante Esq.
 
Risk is inherent in doing business therefore, the need to minimize risk is essential to maximizing organizational goals. If you fail to meet regulatory standards then you are setting up your organization for unnecessary exposure to risks. What kind of basic risks are we talking about? The following article will examine some of the more common information reporting risks you can run across as well as how you can make the changes needed to protect your organization.
 
Information Reporting Risk Basics
 
Form 1099 compliance is part and parcel of IRS compliance efforts, including the audit process. Auditors/examiners look at more than the Forms 1099 filed; they look at every payment made. Their goal is simple, to find those payments that should have been reported but were not.
 
What you need to know is that... 

By Steven D. Mercatante Esq.
 
One of the most common questions we receive revolves around the issue of LLC reporting. The following article will begin our exploration into the basic LLC structures with a detailed look at the Single-Member LLC while also offering some practical tips on how to handle your reporting requirements.
 
Before we get started, know that LLC stands for “Limited Liability Company;” NOT “Limited Liability Corporation.” Be patient with your payees, just because you know what an LLC is does not mean they even know what their own entity designation stands for. Do not argue with your payees, just ask for the proper documentation and if they insist they are an LLC “and that means they are a corporation” then you will just tell them what documentation you need to see; more on that documentation in a moment.
 
An LLC is problematic for reporting purposes because it can register as a number of different entity types, making it difficult to identify when reporting is required. Especially problematic is the rare situation when an LLC indicates it is a corporation, and exempt from reporting. We say this situation is rare because the overwhelming majority of organizations classified as LLCs are truly not corporations.
 
There is one more thing you need to know about LLC formation before we move on to our discussion of single-member LLC’s... 

By Steven D. Mercatante Esq.
 
One of the most common questions we receive revolves around the issue of LLC reporting. The following article will continue our exploration into the basic LLC structures with a detailed look at the Multi-Member LLC while also offering some practical tips on how to handle your reporting requirements.
 
Before we get started, know that LLC stands for “Limited Liability Company;” NOT “Limited Liability Corporation.” In addition, be patient with your payees, just because you know what an LLC is does not mean they even know what their own entity designation stands for. Do not argue with your payees, just ask for the proper documentation and if they insist they are an LLC “and that means they are a corporation” then you will just tell them what documentation you need to see; more on that documentation in a moment... 

By Steven D. Mercatante Esq.

 
All too often, the entity we thought we were reporting to is sold to a new owner in the midst of the year. Do you know what to do when this happens and you continue to make payments to the new owner? Many 1099 professionals do not. The following article explore your basic approach to handling just such a situation while also offering some practical tips on how to handle your reporting requirements.
 
Assuming you are aware of the change in ownership your response is actually quite simple... 

By Steven D. Mercatante Esq.

 
The IRS demands quite a bit of you and it is only reasonable for you to seek to make your job easier. One such way is via the use and acceptance of electronically transmitted information collecting and reporting documentation. Just make sure you are aware of when such practices are allowable and when they are not. The following article provides a starting point for those of you who have chosen to collect payee information electronically.
 
In short, if you are receiving emailed Forms W-9 you will need to be careful. This is because IRS approval for such practices depends upon two key elements... 

By Steven D. Mercatante Esq.
 
Earlier this year I wrote an article explaining how you to handle reporting worker use of cell phones. At the time of printing, there was no indication of when changes would be forthcoming in the law. With Notice 2009-46 however, it appears the IRS has decided to act, but is seeking your input first. Do not miss out on this opportunity to shape changes in the law. Though compliance with IRS rules and regulations can seem never ending it is far better if you not only understand the issue but are able to move the IRS in a direction that makes for an easier and smoother compliance related process on your end. Having reviewed where the law stands today in our past article, this article will summarize where we stand today on the reporting issues surrounding using cell phones for work and then explore what is being proposed by Notice 2009-46.  

By Steven D. Mercatante Esq.
 
IRS Publication 78 is a wonderful tool capable of helping you to identify who truly is exempt from reporting. We all know of various categories of individuals and entities exempt from reporting; however, one of the trickier categories or exempt payees remains charities. This is where IRS Publication 78 offers significant help. The following article will briefly describe how IRS Publication 78 can help you document your payee’s charitable status and what you should do if your payee fails to show up in Publication 78 but still claims charitable status. 

By Steven D. Mercatante Esq.
 
Take note: the Social Security Administration (SSA) has discontinued Form SSA-7028, ostensibly because the SSA legal team determined SSA-7028 lacked the ability to qualify as proper third party notification. Such a huge change leaves many unanswered questions for those of you processing IRS B-Notices or looking forward to the Fall B-Notice season. The following article will first summarize Form SSA-7028’s role in the processing a B-Notice (a notice that the name/TIN combination submitted on an information return has failed to match either IRS or SSA records) and then explain what the IRS has done before finishing with a look at what guidance can be expected in the near future.
 
First, a summary of B-Notice processing basics.