Today TaxMama® hears from Bill in the TaxQuips Forum. Bill insists that for payments made in 2012, we do not have to send 1099s to corporations. TaxMama says, she just read that corporations DO get 1099’d. Who is correct?
Well My Friends,
As it happens, both Bill and I researched this procedure over the weekend. We both came to the same conclusion.
Bill Porter is correct. Here’s what he found:
Information returns are covered in code section 6041. Section 6041A covers “services.”
The “Notes” for Section 6041A on the Cornell Law website indicates no amendments since 1997.
CFR 1.6041-3 still includes corporations as an exception. The Cornell Law website indicates that is current as of 4-1-12.
The Patient Protection and Affordable Care Act, Section 9006 (Page 737) expanded on the information return requirements and the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, Section 2, repealed the new 1099 requirements.
- On 3-23-10, the Patient Protection and Affordable Care Act became law. Section 9006 (page 855) added subsection (h) and (I). Subsection (h) is what added corporations to IRC Section 6041.
- On 9-27-10, the Small Business Jobs Act of 2010 became law. Section 2101 (page 2561) renumbered subsections (h) and (I) and changed them to (I) and (j). The corporations were now subsection (I). The new (h) required rental property expense payments to be reported.
- On 4-14-11, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 became law. This repealed the 1099 requirements. Section 2 strikes out subsections (I) and (j), which includes the requirement for corporations. Section 3 strikes out subsection (h).
The USCode.House.Gov website (current as of 7-9-12) has a list of the amendments at the bottom, which summarize the changes from the above laws.
Reportable payments to corporations. The following payments made to corporations generally must be reported on Form 1099-MISC.
- Medical and health care payments reported in box 6.
- Fish purchases for cash reported in box 7.
- Attorneys’ fees reported in box 7.
- Gross proceeds paid to an attorney reported in box 14.
- Substitute payments in lieu of dividends or tax-exempt interest reported in box 8.
- Payments by a federal executive agency for services (vendors) reported in box 7.
And remember, you can find answers to all kinds of questions about 1099s and other tax issues, free. Where? Where else? At www.TaxMama.com.
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