Can client charge recipients for paper copy of 1099

Taxpayers are required to get consent from recipients before issuing 1099 forms by electronic means. Taxpayer wants to charge a fee to recipients who do not provide consent and want 1099 forms on paper. Fee would be deducted from their payment. This is a kind of forced consent. Is this allowable and/or legal?

No

TD Ameritrade, or whatever they are called now, was going to charge me $3.00/month for a paper statement instead of electronic.

sjrcpa, did they also attempt to charge you for a paper 1099 packet?

I can't remember. Maybe that's the rub.

Can't remember? Sounds familiar...

Does anyone have a cite showing why a payor can't compel electronic delivery? The IRS pub talks about the format for obtaining consent but is silent as to whether this needs to be voluntary.

My client is the recipient. She is 93. While she is still sharp, she seldom uses a computer and doesn't own a smartphone (arthritis makes the use of those items difficult). A big chunk of her income is rental income from one property. She has a contentious relationship with her tenant.

The tenant gives her a 1099 for the rent. For years, she got a paper form. Now the tenant has a new accounting service. With her last check, she got a notice asking her to go to a portal, set up an account, and agree to electronic delivery. If she doesn't do this, she will get a paper form but $25 will be deducted from her rent check annually.

My client is extremely irked and feels like she is being bullied. Obviously, if the tenant unilateraly decides to reduce the rent by the amount of the fee, this would be a matter for lawyers. But I would like to find a cite or something I can use to show they can't comple E delivery----so I can shut this down before it spins out of control. My guess is that the tenant feels, since the rent is such a big portion of her income, she will just go along with it so she won't have to incur legal expenses and so that they will renew their lease next year. And yes, the next lease agreement will include a paper 1099 requirement.

Is the reason that a payor can't charge a fee for a paper 1099 something that IRS says, or is it contractual, i.e., they'd need to have such an agreement with payee in advance?

If tenant is playing these types of games, I would just advise the client to willingly pay the annual $25. Then increase their rent to more than cover it.

Issuance of Form 1099 is required if the payer meets conditions with which we are all familiar.

Consent of the recipient is required before a Form 1099 can be issued to the recipient electronically.

If OP's client does not reply to the request for consent to electronic delivery, the payer must issue a Form 1099 on paper, like it or not.

The regs for electronic delivery of W-2 also apply to 1099's. See https://www.ecfr.gov/current/title-26/c ... -31.6051-1 - subsection j. You might consider the possibilities under (j)(5)(2).

See the penultimate question & answer under Go Paperless! at https://www.dws.com/en-us/resources/inv ... cc3a6ca737 and think about what they are saying.

It's bee in bunnet time. OP observes that client has difficulty using a computer because of arthritis. So basically they are charging her $25 because of her disability. If that isn't illegal, it damn well should be.

Issuance of Form 1099 is required if the payer meets conditions with which we are all familiar.

Consent of the recipient is required before a Form 1099 can be issued to the recipient electronically.

If OP's client does not reply to the request for consent to electronic delivery, the payer must issue a Form 1099 on paper, like it or not.

The regs for electronic delivery of W-2 also apply to 1099's. See https://www.ecfr.gov/current/title-26/c ... -31.6051-1 - subsection j. You might consider the possibilities under (j)(5)(2).

See the penultimate question & answer under Go Paperless! at https://www.dws.com/en-us/resources/inv ... cc3a6ca737 and think about what they are saying.

It's bee in bunnet time. OP observes that client has difficulty using a computer because of arthritis. So basically they are charging her $25 because of her disability. If that isn't illegal, it damn well should be.

Thank you....this is helpful. I thought about a potential ADA issue too. But mostly, I am trying to make this go away and not escalate.

In that case irc162, I think the last sentence of your post #7 is spot on and I think ADA issues give you a hook to hang this on in the negotiations.

If the client is sitting at a desk folding paper 1099s and putting them in envelopes...tell them there is a better option and point them to the online providers. Track 1099 charges $1.75 to process a paper copy for the recipient and mail out. If that breaks the bank, then your client is either mailing out an incredible number of 1099s or is incredibly cheap.

If an incredible number, maybe the client can push back on the contractors to accept credit card or PayPal business.

Client is balking at having to receive a 1099 electronically, which is a hardship for her, or pay $25 to receive a paper one.
She's not preparing/sending 1099s.

I'm with Seaside. Pay the $25 for a paper copy, when the lease is renewed raise the rent by $100. Inflation, you know.

My fellow Tar Heels are right. I know that. However, it annoys me greatly that the tenant does not even think about ADA and associated laws, and will not think about it unless prodded.

If tenant is being this much of a skinflint, does OP’s client have someone to do walkthroughs on a regular basis to make sure the property is being maintained?

My fellow Tar Heels are right. I know that. However, it annoys me greatly that the tenant does not even think about ADA and associated laws, and will not think about it unless prodded.

If tenant is being this much of a skinflint, does OP’s client have someone to do walkthroughs on a regular basis to make sure the property is being maintained?

Me too. And aside from the ADA issue, I think someone who has reached the age of 93 and is still capable of managing her own financial affairs deserves a little courtesy, if not respect.

Aren't there huge penalties for ADA noncompliance? Would they apply in this situation?

Me too. And aside from the ADA issue, I think someone who has reached the age of 93 and is still capable of managing her own financial affairs deserves a little courtesy, if not respect.

Me too! The majority of my clients are older, some do not even have e-mail or computers. We still do everything the "old" way - paper! They pay me by check. I don't have the heart to make them leave or force them to do things electronically!

I cut my old timers and long time clients slack when it comes to document flow.