The implementation of new 1099 tax form instructions has been a key element of our government. These include income tax, social security, excise tax, fines and FICA taxes. The implementation of these new methods will allow the American taxpayer to file their income tax form online.
Many taxpayers have applauded the implementation of these new methods. But did you know that many of the taxpayers who received refunds in 2020 because of the implementation of these new methods are unable to file electronically? There is still one glaring issue.
The IRS website shows an E-file option that allows taxpayers to file their entire income tax return. Many taxpayers who want to file their entire tax return do not wish to spend the time on completing and submitting the federal income tax forms online. Unfortunately, the taxpayers who had their refunds will have to send the paper forms back to the IRS.
Once you receive your full refund, the tax return forms should be returned to the IRS and the tax forms should be filed with the original income tax return forms. The problem is that if the taxpayers already mailed in their original forms to the IRS, the taxpayers will not be able to file an e-file. So, we see that there are two problems.
Not all taxpayers will receive their full refunds because of the implementation of these new 1099 MISC instructions. The IRS must either wait for a taxpayer to return the paper forms or they must file the federal income tax forms electronically with a Form 1099.
The paper forms that are sent to the IRS must be filed when the income tax forms are due. The federal income tax forms must be filed with paper forms when filing taxes.
However, the implementation of these new instructions is causing American taxpayer to be late on their taxes. Many taxpayers who have made mistakes in their federal income tax returns are going to be faced with stiff penalties.
The penalties for filing late are levied based on the dollar amount of the overpayment plus the penalty for every day that the late filing was allowed. It is estimated that nearly half of the tax forms filed were overpaid.
The taxpayers who are late on their federal income tax forms will end up paying more money than they would have if they had filed electronically. They could also have received their extra time to file.
These penalties are expected to create even more confusion in the tax forms that are filed. And this will only add to the frustration of the taxpayers.
It is unfortunate that there will be taxpayers who simply cannot follow the directions in filing their tax forms electronically. This is not the fault of the IRS or the taxpayers, but a result of the implementation of these new 1099 MISC instructions.
It is time for the Congress to review the requirements for filing federal income tax forms electronically so that the taxpayer is provided with the proper instructions. Many times, the taxpayer is too busy or does not have enough time to follow the instructions to file electronically.