The Trade Preferences Extension Act of 2015 significantly increases the penalties imposed for failure to file 1099 information returns and payee statements. For EACH 1099 “failure to issue”, the penalty is being increased from $100 to $250. For taxpayers who “intentionally disregard” the 1099 filing requirements, the per failure penalty is increasing from $250 to $500. The new penalty structure is effective January 1, 2016.
As a reminder, 1099-MISC forms need to be issued when the payments, made in the course of a trade or business, to any one individual or non-corporate entity, for services performed are $600 or more during the tax year. Generally, payments to corporations are excluded from reporting. However, attorney fee payments totaling $600 or more are reportable regardless of the entity type of the attorney.
If you have questions about 1099 reporting or need assistance in preparing your 2015 1099’s, please contact me.