5 Steps to Follow for Delinquent Information Return Procedures
Delinquent information return procedures can be challenging for any business. Failing to submit information returns can lead to penalties, interest, and a lot of stress. However, there are steps that businesses can take to remedy this situation. In this article, we’ll look at five steps businesses can follow for delinquent information return procedures.
Step 1: Determine which Information Returns are Delinquent
The first step to take is to determine which information returns are delinquent. The most common information returns that businesses are required to file are W-2, 1099-MISC, and 1099-NEC forms. Businesses can check their records to see which forms were not filed or if any were filed late. The IRS imposes penalties for each form that is not filed correctly or on time, so it is essential to identify the delinquent forms quickly.
Step 2: Gather the Necessary Information
After identifying the delinquent forms, the next step is to gather the necessary information. This could include employee or contractor information such as names, addresses, and social security or tax ID numbers. It is important to ensure that all of the information is correct and up-to-date before submitting the forms.
Step 3: File the Delinquent Returns
Once the necessary information is gathered, businesses should file the delinquent returns as soon as possible. They can do this by submitting paper forms or by using the IRS’s electronic filing system. It is important to remember that even if the business cannot pay the full amount owed, they should still file the returns to minimize penalties and interest.
Step 4: Pay Any Penalties or Interest
Businesses may face penalties or interest for late or incorrect filing of information returns. The amount of the penalty depends on various factors such as the time elapsed since the due date and the number of returns filed late or incorrectly. It is crucial to pay any penalties or interest as soon as possible to avoid further escalation of the situation.
Step 5: Implement Procedures to Prevent Future Delinquencies
The final step is to implement procedures to prevent future delinquencies. Businesses can establish internal controls to ensure that all information returns are filed timely and correctly. They can also use automated systems to help track and file returns, reducing the risk of human error.
In conclusion, delinquent information return procedures can be challenging for any business. Following these five steps – identifying delinquent forms, gathering necessary information, filing the returns, paying any penalties or interest, and preventing future delinquencies – can help businesses in resolving this issue. By understanding the procedures and taking the necessary steps, businesses can avoid penalties and interest and stay compliant with IRS regulations.
