4.904
Reporting payment information to the IRS
Government agencies must report certain contractor payments to the IRS using Form 1099, and contractors are required to provide their TIN for this purpose.
Overview
FAR 4.904 outlines the requirements for reporting payment information to the Internal Revenue Service (IRS) for payments made to certain contractors. Under 26 U.S.C. 6041 and 6041A, as implemented by 26 CFR, government agencies (as payors) must report payments to the IRS using Form 1099. Additionally, 26 U.S.C. 6109 requires contractors to provide their Taxpayer Identification Number (TIN) when a Form 1099 is required. The responsibility for submitting these reports lies with the payment office within the agency.
Key Rules
- IRS Reporting Requirement
- Government agencies must report payments to certain contractors to the IRS using Form 1099, as required by federal tax law.
- Contractor TIN Requirement
- Contractors must provide their TIN if a Form 1099 is required for the payment.
- Payment Office Responsibility
- The payment office is responsible for submitting the required Form 1099 reports to the IRS.
Responsibilities
- Contracting Officers: Ensure contractors provide their TIN when required and that payment offices are aware of reporting obligations.
- Contractors: Provide accurate TINs when a Form 1099 is required for payments received.
- Agencies/Payment Offices: Submit Form 1099 to the IRS for applicable payments to contractors.
Practical Implications
- This section ensures compliance with federal tax reporting laws, helping the IRS track payments to contractors for tax purposes.
- Failure to collect or report TINs can result in penalties for both agencies and contractors.
- Contractors should be prepared to provide their TIN promptly to avoid payment delays or withholding.