Tax & Accounting Blog

New Cost Basis Rules May Be Lost on Many

New Cost Basis Rules May Be Lost on Many

With taxpayers in the throes of planning their 2011 income tax returns, now’s a good time to remind filers not to overlook new cost basis reporting rules governing securities sales. In the past, they had the option of specifying which shares they sold when computing their cost basis. But as of 2011, taxpayers’ account custodians … Read More

Who’s a Form 1099-K Filer and Who’s Not?

Who’s a Form 1099-K Filer and Who’s Not?

This IRS Letter Ruling Adds to Our Understanding IRS Letter Ruling 201201001 illustrates that the structure of a business that manages prescription drug benefit plans puts it outside the purview of I.R.C. Section 6050W information reporting (Form 1099-K). The conclusion was based on the fact that the business serves plan sponsors on the one hand and makes … Read More

IRS Releases New FAQs to Help Payers Understand the New Tax Reporting of Form 1099-K (I.R.C. Section 6050W)

IRS Releases New FAQs to Help Payers Understand the New Tax Reporting of Form 1099-K (I.R.C. Section 6050W)

The IRS has revised and updated the Frequently Asked Questions (FAQs) posted on the IRS website for payers who need to know about Form 1099-K reporting.  The updated FAQs are at http://www.irs.gov/newsroom/article/0,,id=249029,00.html. They cover developments as recent as the postponement of the start of backup withholding on Form 1099-K payables (to the beginning of 2013 instead … Read More

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New W-9 (Rev. Dec 2011) Released

Over the past nine months, the IRS received multiple complaints about the recently released W-9 (Rev. Jan 2011). Criticism centered on the tax classification area, where the word, required, was added. This led filers to believe that the tax classification section was mandatory, where, in fact, it is not. Due to the high number of complaints, the IRS released a … Read More

Self-Insurance Arrangements – Relief from IRC Section 6050W Requirements

Self-Insurance Arrangements – Relief from IRC Section 6050W Requirements

Notice 2011-78 provides relief to insurance companies administering certain self-insurance arrangements from information reporting obligations under Section 6050W of the Internal Revenue Code. Under the self-insurance circumstances identified in Notice 2011-78, an insurance company will not be treated as a third-party settlement organization with Form 1099-K reporting responsibility. Insurance companies may rely on the Notice until the Regulations … Read More

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IRC Section 6050W – Recent Developments

Relief Provisions and FAQs on IRC Section 6050W Payments The IRS is providing special transitional relief to banks and other payment settlement entities required to begin reporting payment card and third-party network transactions to the IRS on new Form 1099-K. By law, reporting is scheduled to begin in early 2012 for payment card and third-party … Read More