This bulletin informs agencies of Internal Revenue Service information reporting penalties, and explains agency responsibilities for verifying voucher payments to avoid IRS penalties.

IRS requires payors, including states and their agencies, to report certain payments on 1099 forms. OSC uses the payee information entered on vouchers that have an IRS code to print 1099 forms for taxpayers and to generate 1099 magnetic tapes for IRS. If the 1099 forms sent to IRS contain errors, IRS can impose a $50 penalty on the payor for each error. Agencies should verify payee data, as described in the following section, to avoid IRS penalties.

Errors in reporting 1099 information to the IRS occur when an identification number/name combination reported by a payor does not match a number/name combination on IRS files. This can be caused by a number that is entered incorrectly, or by a name that is misspelled or abbreviated. Please enter the proper business name in the voucher Payee Name block. (Our objective is to enter on the voucher the payee name that appears on IRS files.)

Agencies should verify that the payee name, amount and IRS code was correctly entered and processed by the CAS by comparing entered voucher data to the payee data on the VOU065, VOU065A or VOU065P.

If any of the fields (Name, Payee ID or IRS Code) listed on the VOU065, VOU065A or VOU065P are incorrect, the agency should:

1. Underline the incorrect information on the appropriate VOU065 page, and write the correct information above the underlined field;
   
2. Send a copy of the VOU065 page containing the correction to the following address:

Office of the State Comptroller
Federal Reporting Unit
Albany, NY 12236

Agencies should continue to notify the OSC EXPENDITURE HELP LINE (518) 474-4868, when the payee name on the VOU065, VOU065A or VOU065P doesn't agree with the name listed on the voucher.