Filing of substitute 1099's

[bardon719]

Has the IRS approved filing of computer generated 1099's and 1096 yet? or do we still have to file copy A, 1099 and 1096 on a "red" form?

From what I read, substitute forms are approved??? (see pub. 1179)

Thanks for your input.

Don

Bardon719

[Slappy Tax]

The IRS still requires the red forms for its copies of the 1099 and 1096. I've already ordered and received my stockpile from the IRS.

This red-form issue so frustrating every year that I finally decided to consider paying for the 1099 software to allow me to efile the 1099s and 1096s. I've shopped around and found that these programs typically cost $200 for the first year, with a $100 annual renewal fee thereafter. It really irks me to have to pay that when the Soc Sec system allows the same thing for free for W2s/W3s. Plus the Soc Sec system allows submission of plain-paper W2s and W3s if you elect to file by mail.

Anyway, I faxed off the Form 4419 to the IRS to register for efiling 1099s, and the next day (yesterday), an IRS rep from that office actually phoned me to acknowledge the fax. We got to talking, and I began complaining about the IRS red-forms requirement vs the Soc Sec's acceptance of plain-paper forms, plus the requirement that we purchase software to efile 1099s. The lady was gracious and even sympathetic, but I definitely got the idea that she listens to these same complaints all day every day, and that the IRS doesn't plan to do anything about it. I just don't understand why the Soc Sec Admin can be so levelheaded about something so simple, and why the IRS can be so stubborn about the silliest things.

[kcjenkins]

It has to do with their computer systems. SSA has up-to-date equipment that can read the black and white forms. IRS is still using outdated equipment that can not. The basic problem is that the IRS computers are so critical to their operation that they can not seem to be able to update their system. It's crazy, but they have tried at least twice, spending BILLIONS and have had to scrap them each time.

And to think some people want to let the government run our health care system too!!!

[joanmcq]

Its one of the reasons I buy Max. and before that, I got the W-2/1099 package along with the 1040 Office. Just to efile the darn 1099s!

As for health care, why not just outsource it to Canada...oh yeah, we already have a federally run system. Its called Medicare.

[MAMalody]

Just so I don't have to look it up. Since I have Max this year, does this mean that I can e-file W-2s and 1099s? If so, do I have to have approval to do so? If so, what form(s) do I file?

[Slappy Tax]

I can't answer your Max questions specifically, but here are some links that will help:

For W2s/W3s:

http://www.socialsecurity.gov/employer/cpaFilers.htm

http://www.socialsecurity.gov/employer/CPAsleaflet.pdf

For 1099s/1096s: See IRS Form 4419.

Since the SSA accepts plain-paper submissions of W2s/W3s, I have always just mailed those in. It's the silly red-forms for 1099s & 1096s that have driven me to efiling those. I'm just getting my feet wet in those. I'm sure others on here who have actually used the software and done it in the past can be more help.

Something I learned in researching these procedures is that by efiling the 1099s/1096s, the deadline for efiling them with the IRS is the end of March instead of the end of February for paper filing. You still have to provide the 1099s to the recipients by the end of January, but that extra month for getting them to the IRS might come in handy. Maybe, maybe not, but it will be nice to have that extra month in my back pocket just in case.

[MAMalody]

That looks like the ticket. Thanks.

Happy New Year!

[Mike D]

I beg to differ with your replies. Below is an exerpt from the instructions for filing 2007 Forms 1099.

2007 Internal Revenue Service

General Instructions for

Forms 1099, 1098, 5498,

and W-2G

G. Paper Document Reporting

9. Use the official forms or substitute forms that meet the section 301.6724-1 (relating to information return penalties)

specifications in Pub. 1179. If you submit substitute forms that does not require you to file corrected returns for missing or

do not meet the current specifications and that are not incorrect TINs if you meet the reasonable cause criteria. You

scannable, you may be subject to a penalty of $50 for each are merely required to include the correct TIN on the next

return for improper format. original return you are required to file.

I addition see IRS Pub. 1179 for overview of substitute filing of Form 1096. If the software that you are using to print these forms has been approved by the service then you good to go. I personally use NP Systems software that has been approved.

Good luck.

Mike Dubin CPA

[Slappy Tax]

Mike, I really wish you were right, but you're wrong. This exact same discussion but with different participants comes up every year this time. In fact, it always comes up several times each year. Wait about a week, and we'll go through it all over again, guaranteed.

Anyway, you're correct that the 1099 instructions advise to use the official forms (obtainable for free from the IRS), or substitute forms that meet the specifications of Pub 1179. But, Paragraph 2.1.4 on page 10 of Pub 1179 mandates, "All print on Copy A of Forms 1098, 1099, 5498, and the print on Form 1096 above the statement, “Return this entire page to the Internal Revenue Service. Photocopies are not acceptable.” must be in Flint J–6983 red OCR dropout ink or an exact match." And there's the rub.

Out of curiosity, I checked NP Systems Software's website, and you have to read between the lines (i.e., read what they left out of the software description, not what they put in), and it confirms this. It specifies that the software produces fileable W3s/W2s, but makes no such claim for 1096s/1099s. So we're right back where we started, which is right back where we are every year on this subject: red forms for 1096s/1099s for the IRS, or efile them.

As I say, I really wish you were correct. It would spare us all this yearly nuisance, but, shucks, it just ain't so. If you're still not convinced, call IRS Enterprise Computing Center - Martinsburg toll-free at (866) 455-7438 between 8:30 a.m. and 4:30 p.m. Eastern Standard Time. If I've got it wrong, I and alot of other people would love to find out.

Good luck to you, too.