Tax form errors can force some businesses to resend forms

January 30, 2013

As mentioned last week, there are a number of different tax form errors, both accidental and otherwise, that can add up for a filer, encouraging anyone filing a form to make sure all information is correct. But the Iowa Department of Administrative Services also found that mistakes can be costly when sending forms as well.

According to the Des Moines Register, the DAS sent out 1099-MISC tax forms to 15,000 Iowa Medicaid recipients with the wrong identification numbers. Resending forms will cost the federal agency $14,015, and resulted because of “an error occurred during the agency’s sort of the data during the print-to-mail process,” according to the news source.

But the agency can’t just resend the forms. Instead, to correctly file the forms, the IRS requires that new forms with the original errors are sent, brings the reported amount to zero, basically canceling out any of the values in the original form. Then, new, corrected forms in a separate envelope can be sent to the 1099-MISC recipients to report their income.

Incidents like these may encourage more firms to use 1099 form processing services to avoid sending out paper forms and the mistakes to go along with it. But for now,¬†a Forbes¬†article reminds recipients waiting for their forms that most W-2 and 1099 tax forms should be received by January 31, and if you are missing a form, don’t call the IRS until after February 14 – this way, if it is late or simply missing in your mail, you have some cushion room. After the 14th, the IRS is more likely to take missing forms seriously.

Tab Service Company is a leading provider of 1099 form processing services. As an SOC2-approved service organization, we apply industry-best practices to our approach with clients.