USA Payroll Audit


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I previously worked in a company ( with 3 employees), as an independent contractor ( Bookkeeper). In the year end I sent out 1099 Misc to 3 independent contractors ( including me, our janitor and our Landlord) , but did not file the form 1096 with IRS. I did not know we should file one. Our company is to be audited this Thursday for 2010 payroll . We have all other information readily available for the audit, and also the copy for 1099 except for the 1096 . What would the consequences be?

Please help!!
 
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kirby

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$100 per form (you have 3 1099 and one 1096 so =4) failure to file penalty.
 
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Thanks for the quick reply Kirby. There will only be penalty charged and no other problems.
 

kirby

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Yes, its just a filing penalty. If they do fine you, write a letter of appeal. A good argument you have is that the 3 folks involved all used the 1099s and reported the income anyway. It is worth the time and effort to write an appeal.
 
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