New Backup Withholding Procedures: Social Security Number Validation following Receipt of Second B Notice…

We recently received a draft copy of the new Forms 3921 and 3922 from the IRS, including the draft instructions for these forms.  The IRS has indicated that these forms will be released and made public on their website later this summer.

The evolution of the California information reporting regime present challenges to the community in several areas, two of which we are going to comment on here. Firstly there is the ongoing work to transition transmittals to an XML filing system. If you have not received a letter from the state of CA asking you to move filings to this system you do not yet need to do anything, but you should be aware that the changes are coming and will eventually be mandatory for everyone (download the implementation guide here). This is a complex set of requirements that will be phased in over time, so it is important that you or your information reporting provider keep on top of this implementation so you can stay in compliance.  NOTE: Convey’s Taxport Service will be accomodating XML transmittals for California.

As mentioned in our blog post yesterday, the IRS has released their tax information reporting form changes for 2010. There are significant changes for some of the forms.   While yesterday’s post covered new forms 3921 and 3922, TIN masking and the elimination of logos, slogans and advertising, today’s post covers in more specificity all changes to existing forms.

The IRS has released their tax information reporting form changes for 2010. There are significant changes for some of the forms. Tax Year 2010 is also the year when the new forms 3921 and 3922 will be required to be reported by all applicable businesses (Note: the 1099-K is also new for Tax Year 2010, but only impacts firms that process credit card transactions on behalf of merchants). In addition to these new forms and existing form layout changes, the IRS has made a couple of sweeping changes across most forms: truncation of SSN, ITIN and ATIN on paper statements to payees for Forms 1098, 1099 and the 5498 series; and no longer allowing logos, slogans and advertising on information returns for Tax Year 2010. This is for forms 1096, or Copy A of Forms 1098, 1099, 5498, W-2G, 1042-S or any Recipient statements. Further information on logos and advertising can be obtained from the IRS Publication 1179, “General rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498 and W-2G (and 1042-S)”.