For 2011, the IRS has revised business income tax returns to include the following two questions regarding the filing of Forms 1099-MISC. Specifically, the IRS asks:

• Did you make any payments in 2011 that would require you to file Form(s) 1099?

• If "Yes," did you file or will you file all required Forms 1099?

Accordingly, we will be asking you these questions as we prepare your returns. We encourage you to take a moment now to review the requirements for filing Forms 1099 and plan ahead for the appropriate deadlines.

Filing Requirements

Generally, only payments of $600 or more made in the course of your normal trade or business are required to be reported on Form 1099. Some of the most common types of transactions triggering a Form 1099 are listed below (note: this is not an all-inclusive listing):

• Payments for services performed for a trade or business by people not treated as employees; e.g., subcontractors.

• Rental payments, including all types of rent.

• Prizes and awards that are not for services rendered; e.g., a gift card (equal to or greater than $600) given in a company drawing.

• Gross proceeds paid to attorneys.

Exceptions

There are a number of exceptions to the filing requirement. The most common example is a payment made to a corporation (including S corporations); this would not require filing. Please note, however, that attorney fees of $600 or more must be reported, even if paid to a corporation.

Necessary Information

In order to properly prepare Form 1099, information such as the recipient’s name, address, and social security number or taxpayer identification number is needed. The best way to gather this information is to have vendors complete Form W-9.

Important Deadlines

Generally, Form 1099-MISCs should be issued to the recipient by January 31. Businesses must file them with the IRS by February 28.

If you have any further questions, please contact a member of your service team for more information.

This communication is for information only, and any action should only be taken after a detailed review of the specific situation and appropriate consultation.

Notwithstanding that these materials do not constitute legal, accounting or other professional advice, as may be required by United States Treasury Regulations and IRS Circular 230, you should be advised that these materials are not intended or written to be used, and cannot be used by you or any other person, for the purpose of avoiding penalties that may be imposed under federal tax laws. No written statement contained in these materials may be used by any person to support the promotion or marketing of or to recommend any federal tax transaction(s) or matter(s) addressed in these materials, and any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor with respect to any such federal tax transaction matter.