Episode 22: Roundup of Top Information Return Happenings in the First Quarter

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This episode of Information Return Intelligence is airing the first full week of April. And this week we're going to do a roundup of what is new in the information return world in the first quarter of 2026. Information Return Intelligence is sponsored by IOFM. Check them out at IOFM.com. And welcome to this week's episode of Information Return Intelligence. I'm Jason Dynason. We are going to cover what is new with information returns in the first quarter of 2026, January, February, and March. Probably the top thing to say is that as of the airing of this episode, which it's set to drop April 8th, the W9 still has not changed. There's that draft that's out there that we've talked about many times, and it still hasn't been released. But I check the IRS website obsessively several times a day to see if it's changed and it hasn't yet. But as soon as it does, we'll let you know. So let's start at the start. The month of January, there was an interesting private letter ruling that the IRS released relating to a Native American tribe and whether or not the tribe needed to issue 1099s to a prize winner and a powwow. And the tribe made three arguments against needing to issue a 1099. They said, number one, we're not subject to taxation, so we shouldn't need to issue 1099s. Number two, the law says that persons engaged in a trade or business need to issue 1099s, and we're a tribe, not a person. And number three, they said, anyway, we're not engaged in a trade or business. This is a cultural event that loses money. In the private letter ruling, the IRS rejected all three of those arguments. I think that provides some insight for any organization. Even if you're a for-profit corporation or something, I think that it provides more insight for any organization. I have it on my list to do an episode about this private letter ruling. So we'll have that in the coming weeks. Also in January, the Treasury Department released proposed regulations relating to backup withholding and form 1099K. Most of you listening to this probably are not issuing 1099K, so we're going to keep this very brief. But I think this provides a good reminder for anyone on when backup withholding applies. So the 1099K reporting threshold for third-party settlement organizations is twenty thousand dollars received by the vendor on the platform and 200 transactions. Both of those things have to be true before the third-party settlement organization issues a 1099K. And so these proposed regulations say backup withholding as it relates to 1099Ks only applies on transactions where the vendor is past those thresholds. And so a 1099K will be issued. This all has to do with the fact that over the last few years, the 1099K threshold has bounced around and was proposed to be $600 for 2026. And then the big beautiful bill last summer reset everything back to that $20,000 and $200 transaction threshold. That's what this is all about, is just saying, okay, backup withholding for 1099K is reset back to those thresholds as well. Again, most of you probably are not issuing this form. So it doesn't apply to you. But it's a good reminder for anyone that backup withholding is on reportable transactions. So if you're paying a contractor and it's a 1099 NEC, the threshold at which backup withholding would need to start would be $2,000 for 2026 because that's the threshold at which you have to issue a reporting form. Also in January, the Treasury Department released proposed regulations relating to information reporting for the new deduction available for interest paid on qualified vehicle loans. That's all we're going to say, but it gets into when you have to issue this new form called a 1098 PVI. Then we get into February. The IRS released draft W9 instructions. This is a follow-up to then issuing a draft form W9 in September with no instructions. And we've covered that many times on this program. That the draft W9 would prohibit anyone marking individual sole proprietor from giving an EIN, they'd have to give their social security number. Some people have said, well, maybe the IRS won't actually go forward with this. That's what they had said after the September release of a draft form. Well, in February, they dropped draft instructions, which means that the IRS, I don't think, is going to forget about this. But as of the airing of this episode on April 8th, 2026, it still hasn't been released for real yet. As always, Information Return Intelligence is sponsored by IOFM, the Institute of Finance and Management. A great organization to be a part of if you're involved in accounts payable, accounts receivable, procure to pay, finance, anything like that. The spring conference in Orlando is coming up in about a month. You can still register. Go to IOFM.com for more information. You can join the ranks of over 30,000 certified financial operations professionals if you take IOFM certification courses. I teach the certification course on 1099s. There are also certification courses on accounts payable and procure to pay. These certification programs provide you with sharper skills, more respect. These designations are recognized in the industry and provide the opportunity for career advancement. Companies such as Coca-Cola, FedEx, Fruit of the Loom, and many more have sent people to these certification programs. You don't have to be an organization of that size, though, to benefit. Any organization that deals with accounts payable issues will benefit from being a part of IOFN. Go to IOFN.com for more. And now back to the show. Then we get into March. In March, the IRS released an e-file waiver request for e-filing of Form 1042, which is something that we've talked about, how some organizations may face a hardship with getting Form 1042 e-filed. So the IRS put out a waiver process where you can write a letter to them asking for a waiver of e-filing this year. As detailed in a different episode a few weeks ago, I don't recommend using that procedure. But it is there if you really need to. Also in March, the IRS released another draft of the 2026 version of publication 1099. And this is actually the third time in 2026 that they put out a draft of publication 1099. In prior drafts, the IRS had softer language about the closing of the fire system. In prior drafts, they just said we plan to shut it down in December, December of 2026. The most recent draft now says it will be shut down. And that IRIS will be the only method of filing information reform. And iris will be the only method of filing information forms next year. And the latest draft also says that basically the IRS is scrubbing references to FIRE and the FIRE publication, which is publication 1220, they're removing references to those things. So that's another one where some people have said maybe they'll change their mind on this, but it sure doesn't seem like they're going to change their mind. In late March, the IRS released another round of drafts of the 2026 version of forms 1099 NEC and 1099 miscellaneous. And these drafts retain what's been in prior versions, which is new boxes for reporting of overtime pay and tips. Most issuers of 1099s probably won't use those forms, but you might once in a while. One other new item on these drafts, and I don't know if it's a big deal or just a footnote, it's probably just a footnote, but the draft form breaks down the name and address fields into separate boxes. Whereas in the past, it's always just been one big box that encompassed all of that. Now each item has its own separate field. Also in March, the Treasury Department released proposed regulations that basically make it easier for issuers of Form 1099 DA for digital asset reporting. The proposed regulations make it easier for issuers of that form to provide the form electronically. So right now there are cumbersome rules that were written long ago before the current digital world that we live in, that have pretty specific rules that you have to follow before you can provide an information form electronically. That would mean even emailing of a form. And I think we've talked about this before that you might say, well, I've always just emailed a PDF of a 1099 to my vendor, and nothing has ever happened. The IRS hasn't said anything. But the regulations are pretty clear about what you're supposed to do. You have to get authorization from your vendor before you send an information form to them electronically. And so what these proposed regulations do is specific just to the 1099 DA. The regulations make it much easier for issuers of this form to send electronically. And at the same time, the Treasury Department announced that they're soliciting comments from the public on revisions to all of these rules relating to electronic sending of information forms. So it looks like the Treasury Department is serious about investigating softening the rules on all issuers, making it easier for you to send a form electronically. Right now, the actual softening of the rules just applies to 1099 DA, but the Treasury Department is investigating, making it easier and less cumbersome on all issuers. And that's a recap of what happened in the information return world in the first quarter of 2026. As always, this episode is brought to you by IOFM, the Institute of Finance and Management. Check them out at IOFM.com. Join us again next week. I'm Jason Dinason, saying so long for another week. Dinason Media Ventures.