Instructions For Forms 1099-Sa And 5498-Sa - 2006 (Page 14 of 25) in pdf

W-2G, 1098, 1099, and 5498 statements; (b) a check from the

additional requirements and certain “composite” statements that

account being reported; (c) a letter explaining why no check is

are permitted.

enclosed; (d) a statement of the person’s account shown on

Real estate transactions. You must furnish a statement to the

Forms 1099, 1098, or 5498; and (e) a letter explaining the tax

transferor containing the same information reported to the IRS

consequences of the information shown on the recipient

on Form 1099-S. You may use Copy B of the official IRS Form

statement.

1099-S or a substitute form that complies with Pub. 1179 and

Regulations section 1.6045-4(m). You may use a Uniform

A statement of the person’s account (year-end account

Settlement Statement (under RESPA) as the written statement

summary) that you are permitted to enclose in a statement

if it is conformed by including on the statement the legend

mailing may include information similar to the following:(a) the

shown on Form 1099-S and by designating which information is

part of a mutual fund distribution that is interest on U.S.

reported to the IRS on Form 1099-S. You may furnish the

Treasury obligations; (b) accrued interest expense on the

purchase of a debt obligation; and (c) the cost or other basis of

statement to the transferor in person, by mail, or electronically.

securities and the gain/loss on the sale of securities.

Furnish the statement at or after closing but by January 31 of

the following year.

No additional enclosures, such as advertising, promotional

material, or a quarterly or annual report, are permitted. Even a

The statement mailing requirements explained on page

sentence or two on the year-end statement describing new

GEN-9 do not apply to statements to transferors for proceeds

services offered by the payer is not permitted. Logos are

from real estate transactions reported on Form 1099-S.

permitted on the envelope and on any nontax enclosures. See

However, the statement mailing requirements do apply to

Notice 96-62 which is available on page 8 of Internal Revenue

statements to transferors for timber royalties reportable under

Bulletin 1996-49 at

section 6050N on Form 1099-S.

Other information. Statements to recipients for Forms 1098,

Until further guidance is issued regarding the use of

1098-C, 1098-E, 1098-T, 1099-A, 1099-B, 1099-C, 1099-CAP,

TIP

certain logos and identifying slogans on substitute

1099-G, 1099-H, 1099-LTC, 1099-MISC, 1099-Q, 1099-R,

returns that are subject to the statement mailing

1099-SA, 5498, 5498-ESA, 5498-SA, W-2G, 1099-DIV only for

requirements, the IRS will not assess penalties for the use of a

section 404(k) dividends reportable under section 6047,

logo (including the name of the payer in any typeface, font, or

1099-INT only for interest reportable in the course of your trade

stylized fashion and/or a symbolic icon) or slogan on a

or business under section 6041, or 1099-S only for royalties

statement to a recipient if the logo or slogan is used by the

need not be, but can be, a copy of the official paper form filed

payer in the ordinary course of its trade or business. In addition,

with the IRS. If you do not use a copy of the paper form, the

use of the logo or slogan must not make it less likely that a

form number and title of your substitute must be the same as

reasonable payee will recognize the importance of the

the official IRS form. All information required to be reported

statement for tax reporting purposes.

must be numbered and titled on your substitute in substantially

A recipient statement may be perforated to a check or to a

the same manner as on the official IRS form. However, if you

statement of the recipient’s specific account. The check or

are reporting a payment as “Other income” in box 3 of Form

account statement to which the recipient statement is

1099-MISC, you may substitute appropriate explanatory

perforated must contain, in bold and conspicuous type, the

language for the box title. For example, for payments of

legend “Important Tax Return Document Attached.”

accrued wages to a beneficiary of a deceased employee

The legend “Important Tax Return Document Enclosed”

required to be reported on Form 1099-MISC, you might change

must appear in a bold and conspicuous manner on the outside

the title of box 3 to “Beneficiary payments” or something similar.

of the envelope and on each letter explaining why no check is

Appropriate instructions to the recipient, similar to those on

enclosed, or on each check or account statement that is not

the official IRS form, must be provided to aid in the proper

perforated to the recipient statement. The legend is not required

reporting of the items on the recipient’s income tax return. For

on any tax form, tax statement, or permitted letter of tax

payments reported on Form 1099-B, rather than furnish

consequences included in a statement mailing. Further, you

appropriate instructions with each Form 1099-B statement,

need not pluralize the word “document” in the legend simply

you may furnish to the recipient one set of instructions for all

because more than one recipient statement is enclosed.

statements required to be furnished to a recipient in a

calendar year.

If you provide recipient statements in a “separate

TIP

mailing” that contains only recipient statements, Forms

Except for royalties reported on Form 1099-MISC, the

W-8 and W-9, and a letter explaining the tax

statement mailing requirements explained earlier do not apply

consequences of the information shown on a recipient

to statements to recipients for information reported on the forms

statement included in the envelope, you are not required to

listed under Other information above. You may combine the

include the legend “Important Tax Return Document Enclosed”

statements with other reports or financial or commercial notices,

on the envelope.

or expand them to include other information of interest to the

recipient. Be sure that all copies of the forms are legible. See

Substitute forms. You may furnish to the recipient Copy B

Pub. 1179 for certain “composite” statements that are

of the official IRS form, or you may use substitute Forms

permitted.

1099-DIV, 1099-INT, 1099-OID, or 1099-PATR, if they contain

the same language as the official IRS forms and they comply

When to furnish forms or statements. Generally, you must

with the rules in Pub. 1179, relating to substitute Forms 1099.

furnish Forms 1098, 1099, and W-2G information by January

Applicable box titles and numbers must be clearly identified,

31, 2007. However, you may issue them earlier in some

using the same wording and numbering as the official IRS form.

situations, as provided by the regulations. For example, you

For information on substitute Forms 1099-MISC, see Other

may furnish Form 1099-INT to the recipient on redemption of

information below. For Forms 1099-S, see Real estate

U.S. Savings Bonds at the time of redemption. Brokers and

transactions below.

barter exchanges may furnish Form 1099-B anytime but not

later than January 31, 2007.

All substitute statements to recipients must contain the

TIP

tax year, form number, and form name prominently

Donee organizations required to issue Form 1098-C must

displayed together in one area of the statement. For

furnish the acknowledgment to a donor within 30 days of the

example, they could be shown in the upper right part of the

sale of the vehicle (if it is sold without material improvements or

statement.

significant intervening use) or within 30 days of the contribution.

If you are using substitutes, the IRS encourages you to use

Trustees or issuers of traditional IRAs must furnish

boxes so that the substitute has the appearance of a form. The

participants with a statement of the value of the participant’s

substitute form must contain the applicable instructions as on

account, and RMD if applicable, by January 31, 2007. The fair

the front and back of Copy B (in the case of Form 1099-R,

market value of SEP IRAs must also be furnished to the

Copies B, C, and 2) of the official IRS form. See Pub. 1179 for

participant by January 31, 2007. Traditional IRA, Roth IRA,

GEN-10

Instructions For Forms 1099-Sa And 5498-Sa - 2006 Page 14

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