Wednesday, August 5, 2015

Lu Gauthier Issues Warning About Information Returns

Lu Gauthier has given me permission to publish his email blasts.  This one is particularly important.  Many business owners are not aware of how many vendors they need to be sendng 1099s to.  The stakes just got higher.

On 06/29/15, the President signed the Trade Preferences Extension Act of 2015 (P.L. 114-27) which contained a number of "offsets" or revenue raising provisions probably the most important of which is Section 806 entitled Penalty for Failure to File Correct Information Returns and Provide Payee Statements.  The major changes made by this provision is to increase the penalty for failure to FILE "information returns" from $100 to $250 and to increase the penalty for failure to FURNISH "information returns" from $100 to $250.  These changes apply with respect to returns and statements required to be filed after 12/31/15 which means with respect to information returns required to be filed for calendar 2015.  For many of your clients, these changes may pose an existential threat to their businesses since many clients fail to file the requisite information returns, and examining agents have been asking to see these information returns during the course of their examinations.  If I were you, I would be warning my business clients of these changes and encouraging them to clean up their acts in this regard this year!!!

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