New Internal Revenue Service Guidance in July 2019

Who is Impacted?


Anyone making payments of U.S. reportable income will be interested in a listing of all new guidance posted by the Internal Revenue Service (IRS) in July 2019.


What Changed?


In July, the IRS published several important updates. We hope this quick listing of new items posted in July is helpful to you! Be sure to check the IRS site for other forms that your organization uses.


Publications

2019, Publication 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, and Certain Other Information Returns


There are quite a few updates this year. Look for our upcoming article that walks through some of the key changes. Here are just a few:

  • Form 1042-S. There is a new box 7c for partnerships to indicate if withholding with respect to a partnership interest occurred in the subsequent year. Also, there is a new Income code 55 for taxable death benefits paid on a life insurance contract.

  • New Form 1098-F. This is a new form required by section 6050X, enacted by the Tax Cuts and Jobs Act (TCJA), requiring reporting of certain fines, penalties, and other amounts.

  • Form 1099-B. New check box in box 3 to report disposition of qualified opportunity funds (QOFs).


2019, Publication 5084, IRS Congressional Update Newsletter

2019, Publication 5335, IRS History Timeline Book


Notable DRAFT Forms and Instructions


DRAFT 2020 Form 1099-NEC


  • Revival of Form 1099-NEC to report nonemployee compensation. This will allow the IRS to streamline Form 1099-MISC reporting deadlines separate from the deadline for reporting nonemployee compensation.

  • Looks to be in circulation for the 2020 calendar year reporting that will be due February 1, 2021.

DRAFT Instructions to Form 8858, Rev. Oct. 2019

  • Added clarification instructions related to foreign branches.

  • Added clarification instructions related to the use of Employer Identification Numbers and Social Security Numbers.

  • Added instructions for each line.

DRAFT Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, Rev. Nov. 2019

  • Form 8805 will no longer be revised annually. It will only be revised as needed. To accommodate this, the form year has been replaced with a free text line to allow for continuous use.


DRAFT 2019 Instructions for Forms 8804, 8805, and 8813

  • Form 8805. The Form 8805 will no longer be revised annually. It will only be revised as needed. For more information, see IRS.gov/Form8805.


The following Forms and Instructions look to be converting from annual revision to continuous use. This means that the IRS will update the forms and instructions as needed and not annually. To accommodate this, the form year has been replaced with a free text line to allow for continuous use.


The IRS also posted the following DRAFTS:



How to Implement?


Organizations required to file any of the information returns mentioned in this article should consider the following:

  • Use the updated IRS tax calendar and consider syncing the deadlines with your own calendar application for consistency.

  • Confirm your systems and reporting applications are update to date!

  • Confirm tax reporting vendors are aware of forthcoming updates to 2019 and 2020 Forms and withholding rates.

  • Update process and procedure manuals to incorporate any changes required.

  • Update training materials and presentations to staff.


Look for our upcoming articles on Form 1099-NEC and the 2019 Publication 1187!


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THIS DOCUMENT CONTAINS GENERAL INFORMATION ONLY AND IS NOT A SUBSTITUTE FOR ACCOUNTING, TAX, OR ANY OTHER PROFESSIONAL ADVICE OR SERVICES. BEFORE MAKING ANY DECISION OR TAKING ANY ACTION THAT MAY AFFECT YOUR BUSINESS, YOU SHOULD CONSULT A QUALIFIED PROFESSIONAL ADVISOR.

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