Will the IRS catch a missing 1099-misc?

The Internal Revenue Service is a notoriously underfunded and understaffed department of the United States Government. Still, they are responsible for processing, auditing and double-checking financial records for each person in the country, as well as distributing tax refunds at the end of the year. With so much going on in this governmental agency, it seems like some companies and businesses can get away with neglecting to file a 1099 form. But will the IRS catch a missing 1099-misc? In short: Yes, they will.

The IRS may be understaffed, but rest assured: if you make a mistake or forget to file a 1099-misc form, they will catch it. So, what should you do when this happens? There are a few things you can do to mitigate potential penalties. Chief among them is to invest in a semi-automated software solution, like the 1099/W-2 filer from AMS.


What Happens When You Forget to File a 1099-MISC

If you realize you forgot to file a 1099-MISC for an employee or client, check the date. If you’ve missed the paper filing deadline, you can file electronically to help avid penalties. Additionally, keep track of the date of your attempted filing and the reason why it was late. Perhaps you were waiting on a final contractor invoice to record the correct amount paid. These slip-ups happen, even to the most organized accounting departments. Just keep track of your attempts to rectify the situation in case the IRS reaches out.

If the IRS does call for a penalty, here is a brief timeline of the penalty rates as more months pass.

  • Within 30 days of the deadline – $30 per 1099
  • After 30 days but before August 1 – $60 per 1099
  • After August 1 or not at all – $100 per 1099


For companies who work with few contractors, these penalties may not sound like a big deal. However, for larger businesses who rely primarily on contracted labor, the fees can add up quickly. Your best bet is to file quickly after realizing the mistake and record your reason for the late or incorrect filing.

Tips for the 2020 Tax Season

We should note that 1099 use is expected to rise for the 2020 fiscal year. The novel coronavirus pandemic has caused millions of full-time job layoffs. Businesses are looking to contracted workers as a way to save money. On the other hand, these laid off workers are increasingly relying on contracted gig work to make a living, either by driving for rideshare companies, signing on for temporary projects, or starting their own businesses. If you work as an accountant or own a business, expect to file more 1099-misc forms than usual in this upcoming year. Still, if you’re wondering whether the IRS catch a missing 1099 misc, they will.

There are a few things you can do to prepare for the 2020 tax season, but the most important is to invest in a semi-automated software solution as soon as possible. AMS is a great option for companies of most sizes and industries. We’ve already mentioned our 1099/W-2 filer, which allows users to file these essential income forms, but AMS Payroll is an excellent additional product. This software tool allows you to track client and contract spending throughout the year, distributing pay stubs, gathering data, and, ultimately, applying it to next year’s 1099-misc forms. Tools from Advanced Micro Solutions are the simplest way to get ahead and avoid penalties down the road.

Software Solutions from AMS

Our W-2 and 1099 Forms Filer is our only required platform. From there, users pick the services they need. Choose from the tools below to build out your customized accounting software.