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Vendor Code/1099 Section Robert E. Byrd, CGFM County Auditor-Controller Agenda What is 1099 –Misc Reporting Type of Payments Payments Not Required Reporting Reporting Timeline Accuracy of Vendor Information What is the County Departments Role What is 1099-MISC and What does it Mean?

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Vendor Code/1099 Section

Robert E. Byrd, CGFM

County Auditor-Controller


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Agenda

  • What is 1099 –Misc Reporting

  • Type of Payments

  • Payments Not Required Reporting

  • Reporting Timeline

  • Accuracy of Vendor Information

  • What is the County Departments Role


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What is 1099-MISC andWhat does it Mean?

  • A 1099-Misc is a type of tax form. It is used to report miscellaneous income for vendors who have been paid a total of $600 or more in non-employee payments during a calendar year.


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What Type of Payments are Reported on 1099-Misc?

  • Legal Services

  • Rents

  • Prizes/Awards

  • Medical/Dental Services

  • Guest Speakers/Lectures

  • Performers

  • Child Care Providers

  • Other Services


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Payments Not Required to Report on 1099-Misc

  • Payments to Corporations (Except payments made for legal/medical services)

  • Payments for merchandise, telegraphs, telephone, freight, storage

  • Wages paid to employees (reported on W-2, Wage and Tax Statement)


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Payments Not Required to Report on 1099-Misc

  • Business travel allowances /mileage paid to vendors

  • Payments to non profit organizations and government agencies


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1099-Misc Reporting Timeline

  • IRS regulation mandates that the Form 1099-Misc is distributed no later than January 31 of the year following payment.

  • Electronic file is due to the IRS by March 31.


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Why is Accurate Reporting of Vendor Information Critical?

The County of Riverside annually files to the IRS the reportable amounts paid to each vendor during the calendar year.

  • The legal name and Tax Identification Number (TIN) in PeopleSoft MUST match exactly with the legal name and TIN on file with the IRS.


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Why is Accurate Reporting of Vendor Information Critical?

Yearly, the County has paid between $12,000

to $14,000 in penalties to IRS.

  • For 2007, the penalty amount was $10,450 for 209 vendors with incorrect information.

  • Penalty notifications were sent to these vendors. 84 vendors responded and have been corrected. This reduced the penalty by $4,200.


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Why is Accurate Reporting of Vendor Information Critical?

  • The ACO is sending a second notification to 125 vendors from the 2007 penalty reporting period.

  • These vendors did not respond to the first request. If the vendor fails to respond to the second request, then the ACO, on behalf of the County, will apply a penalty at the required 28% rate.


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What is the Role of theCounty Departments?

  • Verify that the vendor information is accurate on the W-9 and matches the IRS 147-C letter OR matches a copy of the Social Security Card.

    • NOTE: Social Security Number (SSN) or Employer Identification Number (EIN) MUST always have a 9 digit number


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What is the Role of theCounty Departments?

  • If a SSN is used, then the Individual/Sole Proprietor box should be Checked on the W-9 form or AP-1 (substitute W-9 form), AND the legal name should be written in the “Name” field and NOT in the “Business name” field.


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What is the County Departments Role?

  • Please submit all required vendor code documentation (for more specific detail, refer to the MAM presentation of 11/20/08.)


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Vendor Code & 1099’s

  • Vendor Code Section contact list:

  • Denene Guerrero Guzman 955-3837

  • Felix Offor 955-0334

  • Jason King 955-5179


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