4.903 Reporting contract information to the IRS
Source: FAR 4.903 on acquisition.gov
Federal agencies must report specific contract and contractor information for qualifying contracts and modifications to the IRS via the FPDS to ensure tax compliance.
Overview
FAR 4.903 outlines the requirements for federal agencies to report specific contract information to the Internal Revenue Service (IRS) in accordance with 26 U.S.C. 6050M and its implementing regulations. This section details which contracts and modifications are subject to reporting, the information that must be provided, and the method of transmission. The regulation ensures that the IRS receives timely and accurate data on federal contract actions for tax compliance and oversight purposes.
Key Rules
- Reporting Requirement Trigger
- Agencies must report contract modifications that increase the value of contracts awarded before January 1, 1989, by $50,000 or more, and all contracts or modifications entered into on or after April 1, 1990.
- Threshold for Reporting
- Contracts and modifications exceeding $25,000 entered into on or after January 1, 1989, must also be reported.
- Information to Report
- Agencies must report the contractor's name, address, TIN, common parent (if any), contract action date, amount obligated, and estimated completion date.
- Reporting Method
- All required information must be transmitted to the IRS via the Federal Procurement Data System (FPDS), following subpart 4.6 and relevant instructions.
Responsibilities
- Contracting Officers: Ensure all required contract information is collected and reported through FPDS for applicable contracts and modifications.
- Contractors: Provide accurate and complete taxpayer identification and related information as required.
- Agencies: Oversee compliance with reporting requirements and maintain accurate records for IRS reporting.
Practical Implications
- This regulation exists to facilitate IRS oversight of federal contracts for tax purposes.
- Accurate and timely reporting is critical to avoid compliance issues and potential penalties.
- Common pitfalls include missing or incorrect TINs, incomplete data, or failure to report qualifying contract actions.
(a) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section6050M&num=0&edition=prelim" target="_blank">26 U.S.C. 6050M, as implemented in 26 CFR, requires heads of Federal executive agencies to report certain information to the IRS.
(b)
(1) The required information applies to contract modifications-
(i) Increasing the amount of a contract awarded before January 1,1989, by $50,000 or more; and
(ii) Entered into on or after April 1,1990.
(2) The reporting requirement also applies to certain contracts and modifications thereto in excess of $25,000 entered into on or after January 1,1989.
(c) The information to report is-
(1) Name, address, and TIN of the contractor;
(2) Name and TIN of the common parent (if any);
(3) Date of the contract action;
(4) Amount obligated on the contract action; and
(5) Estimated contract completion date.
(d) Transmit the information to the IRS through the Federal Procurement Data System (see subpart 4.6 and implementing instructions).