The IRS was kind enough to reply to my request for information about the discrepancy in filing dates for the form 1099 series and the W-2 series. They acknowledged that I was “right about the difference between 1099s and W-2s” but declined to comment on any sort of penalty relief for those who might be affected by the confusion.
Instead, the IRS stated:
Please note that most employers, banks, and other payers now file W-2 and 1099 series forms electronically. The due date for e-filed returns is normally March 31, but, because that’s a Saturday this year, businesses actually have until April 2, 2012, to e-file.
The point is well taken regarding e-filed returns. And I know the IRS is desperate for folks to e-file. But not everyone e-files. The rule is:
If you are required to file 250 or more information returns, you must file these returns electronically. The 250-or-more requirement applies separately to each type of form. For example, if you must file 500 Forms 1098 and 100 Forms 1099-A, you must file Forms 1098 electronically, but you are not required to file Forms 1099-A electronically. The electronic filing requirement does not apply if you request and receive a waiver.
You see, with all due respect to my friends at Ernst & Young and the other big accounting firms, as well as those in the banking industry, and large employers and companies like IBM and Apple, I’m not worried about you. I think you’ll be okay. You already know the rules and you generally pay tax professionals a pretty decent sum to make sure that you don’t miss important deadlines.
But I am concerned about our small business owners, including accounting firms that aren’t in the Big Four, those that don’t file 250 or more information returns. Tax rules can be complicated. And it seems more and more that we’re operating under the assumption that everyone is on the same playing field when they’re clearly not.
I hope that IRS – and those in Congress – remember our small businesses when they write the rules and draft legislation; those businesses are increasingly being overlooked. That entrepreneurial spirit that made America great is getting squashed underneath a myriad of small business-unfriendly legislation.
I see it in my own neighborhood. In Philadelphia, corner stores are disappearing. You don’t see many shoeshine guys at the train station anymore. I can’t find anyone to fix my back door because there are few handyman type businesses in operation. Is it all about taxes? Of course not. I realize there are practical and cultural reasons why we see fewer small businesses opening their doors. But a complex Tax Code, combined with a shifting sense of what is manageable, is certainly contributing to the problem.