The Tax Information Reporting Industry continues to see constant change in 1099 compliance rules and regulations- Corporate Reporting, Merchant Reporting, Cost Basis Reporting, Foreign Account Reporting, Potential Penalty Increases – to name just a few.

Having just participated in several recent industry conferences and shows, Convey is more aware than ever that the Tax Information Reporting Industry continues to see constant change in 1099 compliance rules and regulations- Corporate Reporting, Merchant Reporting, Cost Basis Reporting, Foreign Account Reporting (FATCA), Potential Penalty Increases – and the list goes on. 

Last week, Convey presented a webinar addressing the impact of the new tax information reporting changes on Accounts Payable departments due to recent changes to 1099 reporting introduced in the Healthcare reform bill in March (e.g. elimination of the Corporate exemption and reporting on payments of “goods” as well as services).  John Adams and Jeff Cronin, from Convey’s Product Management team, outlined the additional work effort around vendor master file clean up, how long the process will likely take, and what the penalties can be for non-compliance.  They also took the time to introduce Taxport A/P, the newest tax information reporting solution in the Convey family of services. Convey’s Tax Identity Management services and Taxport A/P have been designed specifically for Accounts Payable professionals to help them manage the increased vendor/supplier reporting. 

It was an interesting week of media and industry attention around the new 1099 reporting requirementsimposed by the March Healthcare Reform Package.   Much of this flurry of coverage surrounded the mid-year  Taxpayer Advocate Report released to Congress this week.  IRS Taxpayer Advocate Nina Olson commented that “The submitted report expresses concern about the adequacy of IRS taxpayer service, particularly as the IRS begins to implement health care reform, about new information reporting burdens facing small businesses and others, and about certain IRS collection practices”.  Although coverage in many mass media outlets (USA Today, Wall Street Journal, Washington Post) has stimulated public debate on this topic this week, the IRS is looking for formal comment from industry by September 29th, 2010 on the best way to implement these reporting requirements in order to minimize burden to business (click here to learn more about how to comment) .

This week over 1,500 individuals attended a webinar on the sweeping changes to information reporting impacting Accounts Payable professionals.  The event, likely the largest gathering to date of folks trying to learn about the new 1099 reporting changes, was a great first step by many small and large businesses alike to learn more about how Corporate Reporting is likely to impact their organizations. Although the webinar provide new clarity and insights to new 1099-MISC  reporting rules,  the audience also identified a number of unanswered questions that the Treasury has to address as these regulations become implemented over the coming 19 months.

On March 23, 2010, President Barack Obama signed the healthcare legislation into law. Now that the law is done, we are left waiting for the final IRS regulations to define how we are going to comply. For our purposes, the changes we are most interested in surround the expansion of the information reporting program to include corporations and all goods and services.

As many of you may already know, Congress is currently reviewing legislation aimed at curbing tax evasion by U.S. citizens who use foreign institutions or create foreign investment or corporate structures to hide assets.