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January 23, 2012

Penalties Double for Late 1099s

Churches should note upcoming February 28 deadline.

Editor's Note (02/21/12): A previous version of this post incorrectly stated the deadline for Form 1099s that are mailed. The correct dates are now shown in the post.

Form 1099s that are mailed are due on February 28, 2012, for the 2011 tax year (April 2, 2012, for those filing electronically), and churches that need to issue these forms should take note this year: a failure to send them on time has doubled from $50 per form to $100 per form.

If you do not have all the information needed to complete a Form 1099 (such as a Social Security number), you can still file it incomplete by February 28. As long as you secure the missing information and file the amended Form 1099 before August 1, 2012, then no penalties will apply. By the way, if you file the Form 1099 within 30 days after February 28, the $100 penalty is reduced to $30. If you file Form 1099 more than 30 days after February 28, but before August 1, 2012, the penalty is reduced to $60 per form.

The IRS projects collecting big bucks from these penalties over the next few years. Churches should check—and double check—to make certain Form 1099s are issued to all unincorporated businesses that provided services of $600 or more to them during 2011. This includes sole proprietorships, partnerships, and limited liability corporations (LLCs). You can verify the business information via a Form W-9.

For more information related to churches and taxes, check out the 2012 Church & Clergy Tax Guide.

Frank Sommerville is a shareholder in the law firm of Weycer, Kaplan, Pulaski & Zuber, P.C. in Houston and Dallas, Texas, and an Editorial Advisor for Christianity Today International's Church Management Team.

Frank has presented seminars on nonprofit taxation since 1981. He regularly assists churches in preventing litigation, including those that originate with accusations of sexual misconduct. Due to his significant contributions to the church administration profession, he was inducted into the National Association for Church Business Administration Hall of Fame in 2003.

Related Tags: finance, finances, IRS, Law, money, tax

Comments

According to the 1099 instructions for 2011 returns, the due date is February 28th, 2012 for paper filed returns (not the 29th) or April 2, 2012 if you file these electronically.

Per the 1099 instructions for 2011 paper filed returns, the due date is February 28th, 2012, not the 29th.

Mark--Thanks for your comments. I'm working with Frank right now to clarify this. We'll update soon.

Mark--You are correct. The correct information is now reflected in the text above.

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