The IRS is developing a new online approach for small businesses to build 1099 paperwork from scratch and file them electronically.
The IRS claims that its new internet gateway, which is available for free, does not require any specialized software and provides warnings about potential errors. It is likely to be utilized by small-volume paper filers who produce a few 1099s.
1099 Paperwork
If they worked as an independent contractor or freelancer or performed gig labor in 2022, taxpayers must be on the lookout for 1099 forms that detail their revenue.
A 1099-NEC is issued when a corporation pays a freelancer or independent contractor who is not an employee during the year. NEC is an abbreviation for non-employee compensation.
According to IRS authorities, this new approach can also be utilized by businesses when submitting 1099s to report paid interest or dividends, as well as the 1099-MISC form, which covers payments other than employee compensation made by a corporation to third parties.
Peter Mills, senior manager for Tax Policy & Advocacy at the American Institute of CPAs, stated that expanded IRS e-filing capabilities are needed and have been supported for years by accountants.
He claims that the internet gateway will speed up IRS processing and reduce corporate preparation time. Small businesses that presently submit their 1099 forms to the IRS on paper will particularly benefit from it.
IRS Acting Commissioner Doug O’Donnell said in a statement, The IRS is thrilled to provide businesses, especially small businesses, a terrific new opportunity to electronically file their 1099s for free.
O’Donnell emphasized that the technology can assist in minimizing the millions of paper 1099s expected to be filed by the IRS in 2023.
The portal allows users to generate, upload, edit, and study data as well as download copies of 1099-series forms for distribution and verification, according to the IRS. Additionally, businesses can modify the system as necessary.
Read more: Tax season: Do’s and Dont’s to avoid stress and scams
GOP Plans To Ban IRS Telework
A new Republican bill would prohibit IRS employees from teleworking until the agency makes greater progress on the millions of unprocessed tax returns accumulated during the COVID outbreak.
Rep. Dan Meuser’s (R-Pa.) Require Employees To Uniformly Return Now (RETURN) Act would ban the IRS from spending any more of the $80 billion given to it under the Inflation Reduction Act to hire tens of thousands of employees over the next decade until the tax backlog is reduced.
As of late October 2022, the IRS had an unprocessed backlog of over 8 million individual and company paper returns, according to the agency’s own Taxpayer Advocate Service. Meuser stated that there is no justification for allowing IRS employees to continue working from home until the backlog is addressed.
After additional investigation, Meuser discovered from the Biden administration that just a fourth of IRS personnel had returned to full-time employment by the end of December 2022, months after President Biden declared the pandemic finished.
His office received information from the Treasury Inspector General for Tax Administration indicating that more than 18,000 employees continue to telecommute full-time, and more than 61,000 employees conduct at least some telework. Taxpayers have been experiencing delays and backlogs as a result of this lenient hiring policy, according to Meuser.
Read more: IRS notice to Cryptocurrency investors about 2022 tax filing