Late 1099-NEC

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#1
CathysTaxes  
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What are the chances of a small business, that was never late with 1099's, to be penalized with late filing of 1099-NEC? And if penalized, get first time abatement?

Client was late getting me his information (in February, I received the balance of his paperwork). Client only had to file two forms (including one for myself). The other recipient, who he paid to paint his office, he was unable to get tax id, claims recipient never returned his calls.

Thanks

P.S. I hate small businesses. And I wish they would have a different box to use to report payments to accountants and other providers of service verses contract labor (who probably should be employees).
Cathy
CathysTaxes
 

#2
Taxaway  
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I have to believe a very small chance? Filed one last week for a client who issues only one, legitimately to his son for some website work, and he had contacted me last year about the same time as well. No IRS notice, though it's 'only' been a year. Maybe IRS isn't looking for the small volume payers.
 

#3
CathysTaxes  
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Thanks Taxaway.
Cathy
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#4
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I've never had a client receive a penalty for late filing of 1099's.
My theory is the IRS would rather know about the income so they can collect the tax, vs penalize the late filer.

I have had clients who batched 1099s incorrectly receive a large penalty because they filed incorrectly multiple years in a row, making a real mess for the IRS with collection action.

I've also heard of a bookkeeper who accidentally filed a 1099-Int when it should have been a 1098.
That also received a penalty.
 

#5
CathysTaxes  
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Thanks Recked.
Cathy
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