USA Payroll Audit

[kh2002]

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!!

 

[kirby]

$100 per form (you have 3 1099 and one 1096 so =4) failure to file penalty.

 

[kh2002]

Thanks for the quick reply Kirby. There will only be penalty charged and no other problems.

 

[kirby]

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.

 

[kh2002]

Thanks a lot..