Tax Department

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.

This information is provided as a public service, and should not be construed as individual accounting or tax advice. For information on how these general principles apply to your situation, please consult your Cook & Co. Agent.

Can I take a long-term capital loss (up to the $3,000 limit) against my ordinary income without any long-term capital gain?
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.



Have you ever received a tax document that has bold print that reads "CONSULT YOUR TAX ADVISOR"?

Bring it to us! The reason for those disclaimers is because of the potential liability associated with providing tax advice. Providing tax advice is what we do. But please remember that when you are with your agent working on the current tax returns, if you have tax questions about the future, try to hold those until the end of the interview. Once your agent has gathered all of your information and keyed it into our computer system, he will have an updated snapshot picture of your tax and financial situation on his computer screen and will be better equipped to answer questions about the future.

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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 also an Accredited Tax Advisor and a Certified Public Accountant (CPA) licensed by the states of Alabama and Tennessee.

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authorGregory J. Cook, EA, CPA+
Accredited Tax Advisor
Past President Alabama Society of Enrolled Agents
Past President Alabama Association of Accountants
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