Expect to pay a penalty to the Internal Revenue Service if you forget to file a 1099 during tax season. Your business’s consequences will depend on if you intentionally missed a deadline or not. Check to see whether you received a notice from the IRS about a missing 1099 form. An appropriate way to handle a notice from the IRS is by immediately resolving the matter. You may find that you can articulate a “reasonable cause” for your delayed or missing 1099.
Some acceptable reasons for failing to file a 1099 include:
Extraordinary Circumstances – Fires, floods, and other accidents out of your business’s control are often acceptable reasons for missing 1099s.
Unavoidable Business Complications – These can include a death or a serious illness that affects your business’s day-to-day functioning.
Accessibility – Whether or not you can get your hands on the records that you need to file.
Provide clear proof of why you were unable to file a 1099 form. Simply forgetting to file a form is not a valid reason to avoid a penalty. Your business may owe a fee of $50 to $280 per form for the 2022 tax year depending on how long it takes you to file late information returns.