Understanding the Combined Federal/State Filing Program
The Combined Federal/State Filing Program is a voluntary partnership between the IRS and participating states that allows filers to send certain information returns (like Forms 1099) just once to the IRS, and the IRS will forward the data to participating state tax agencies. The goal of the CF/SF program is to reduce duplicate filing and […]
Implications of IRS-ICE Data Sharing
The IRS-ICE data-sharing agreement signed on April 7, 2025, is a historic and controversial shift in U.S. tax and immigration policy. It has broad implications for how information returns—including Forms 1042-S, 1099, and W-2—are filed, verified, and enforced. Overview of the Agreement Signed by: Treasury Secretary Scott Bessent and DHS Secretary Kristi Noem Effective Date: […]
Cross-Border Payments Compliance: When to Issue Form 1042-S vs. Form 1099
Navigating U.S. tax reporting rules for cross-border payments can be tricky — especially when deciding whether to issue a Form 1042-S or a Form 1099. These forms serve similar purposes but apply in very different circumstances, based primarily on the recipient’s U.S. or non-U.S. tax status. Here’s a straightforward breakdown to help you stay compliant, […]
‘B’ record(s) contains non-numeric characters in the Payment Amount Fields.
If a ‘B’ record in your IRS electronic filing submission contains non-numeric characters in the Payment Amount Fields, this is an error that must be corrected to ensure the file is accepted. Understanding the Problem: ‘B’ Record Overview: The ‘B’ record represents the payee information (e.g., recipient of income) in the IRS file layout. Payment […]
Understanding Record T, A, B, C, and F
When filing 1099 forms electronically through the IRS FIRE (Filing Information Returns Electronically) system, the file must adhere to specific formatting rules outlined in Publication 1220. The file structure includes several key records, including Record T, A, B, C, and F, each serving a distinct purpose: T Record: Transmitter Record Purpose: Identifies the entity transmitting […]
How does the IRS match 1099 forms to individual tax returns?
The IRS uses a process called document matching to compare information reported on Form 1099 to the taxpayer’s individual income tax return. Here’s how the system works: 1. TIN-Based Matching Each Form 1099 includes the Taxpayer Identification Number (TIN) (usually a Social Security Number for individuals or an Employer Identification Number for businesses) of the […]