1099-B

1099-B Forms Deadline Moved from January 31 to February 15

For Many Investors, Year-End Forms to Arrive Later

Many investors will receive their year-end tax statements later than in past years, but these forms are likely to be more accurate, according to the Internal Revenue Service.

That was the announcement back in January 2009. They say the test of time will tell whether a decision was a good one or not.
Well, I don't believe we've seen any improvement in the correctness of the broker dealer 1099 filings. In fact, it seems that we've seen more amended (corrected) 1099's than before.
Tax Dept
A new law, enacted in the Fall of 2008, changed the deadline from Jan. 31 to Feb. 15, when brokers, including brokerage firms, mutual fund companies and barter exchanges, must furnish year-end Forms 1099-B to their customers. Where a broker furnishes these forms by mail, this means that the forms must be mailed, not received by that date.
April 15 Tax Filing Deadline
The announcement went on to say ...
Because Feb. 15 falls on Sunday in 2009, and Monday, Feb. 16 is a federal holiday, the deadline is Feb. 17 this year. In addition, the IRS said earlier this month that for calendar-year 2008 reporting, the Feb. 17 deadline also applies to other tax information that brokers report to their customers, including such items as interest and dividends, on a combined year-end statement.

This change is designed to make it easier for brokers to provide investors with accurate year-end statements on stock sales and other transactions. Inaccurate year-end statements that have to be corrected later often force investors to file amended individual returns.

In its 2006 annual report, the Information Returns Program Advisory Committee (IRPAC) recommended changing this deadline from Jan. 31 to Feb. 15. The report noted that, “Form 1099 reporting has become very complex over recent years. As a result, many broker dealers are currently experiencing 20% amended Forms 1099. There is insufficient time to make the necessary changes in January, verify the data, print the forms and mail them by Jan. 31.” IRPAC is a federal advisory committee that advises the IRS on issues related to information returns, such as Forms 1099.

The long-standing Jan. 31 deadline for providing other year-end forms remains unchanged. However, because Jan. 31 falls on Saturday, employers, banks and other businesses have until Monday, Feb. 2 to mail or otherwise make available various 2008 year-end tax statements. This includes forms in the W-2, 1098 and 1099 series.

Since the entire objective of this change was to improve the accuracy of the 1099-B reporting document, and IRPAC stated that the error rate of the forms prior to this change was 20%, I propose the following.

TIGTA (Treasury Inspector General for Tax Administration) should conduct a review to see if this change accomplished that purpose.
If the change did not accomplish its goal, then the deadline should be reinstated to January 31.


“Too often, changes are implemented to fix things ... then never followed up on to see if they worked. If they did not work, why leave them in place? Most changes have a domino effect, and in this case, our ten week window has been reduced to eight weeks. ”
author
Gregory J. Cook, EA, CPA+
Accredited Tax Advisor
Past President Alabama Society of Enrolled Agents
Past President Alabama Association of Accountants
contact: secure email secure email 1-800-551-6253 voice mail 117
Cook and Co., Enrolled Agents are licensed by the U.S. Treasury Department
to represent taxpayers before the Internal Revenue Service (IRS). Greg Cook is a
Certified Public Accountant (CPA) licensed by the states of Alabama and Tennessee.