Sovos State of Compliance Newsletter
August, 2015
Stricter Enforcement = Higher Penalties for 1099 Misfilings.
H.R. 1295, (now PL 114-27), more than doubles the penalty per record from $100/record to $250/record for failure to file properly. This update also doubles the annual maximum penalty cap from $1.5M to $3M. The new penalties are effective for information returns required to be filed after Dec. 31, 2015. Sovos Compliance was recently covered in Law360 talking about these penalty increases and their impact.

Learn more about these increases by attending our upcoming B&P Notice Best Practices Webinar on Wednesday, August 26 at 1:00 CT or in this blog post.

ACA PENALTIES ALSO AFFECTED BY PL 114-27.

Not only are 1099s covered by the doubling of penalties for non-compliance, so are penalties for ACA forms 1094/1095.  

This penalty update directly affects the new 1094/1095 Health Care ACA forms, even though sections 6721 and 6722 of the IRS code traditionally relate only to 1099 & W-2 information returns. How? Sections 6055 and 6056 of the IRS code, which govern minimum essential healthcare coverage reporting requirements, specifically reference 6721 and 6722 for penalty enforcement. This includes penalties that relate to errors, deadlines to correct said errors and other important implications regarding tax filing requirements.

The IRS will enforce these new penalties unless entities can show they made a good faith effort to provide all necessary reporting information accurately. A good faith effort does not include late filings or failing to file an information return or statement. This good faith effort approach also only applies to the filings for Tax Year 2015. Learn more about the implications in our blog post

FATCA, CRS and CDOT; The growth of global information reporting.
Global reporting requirements like the Common Reporting Standard (CRS) are introducing significant and complex reporting obligations for financial institutions around the world to identify and transmit information of specific accounts to their local government, ushering in a need for new reporting systems and data management. Read more
Implementing ACA Reporting Webinar with SHRM: 9/1, 2:00 ET
Under the Affordable Care Act (ACA), employers with over 50 employees have a new set of tax information reporting obligations required for tax year 2015. For many organizations, responsibility for this reporting falls on HR and benefits departments. SHRM and Sovos Compliance will provide an overview of the new reporting obligations and discuss common implementation challenges. Register now.
HAVEN'T SIGNED UP FOR SOVOSCON YET?

Use Promo Code AugustSOC to get 50% off the current registration fee!

SovosCon, October 28-30 in San Diego, features a wide range of CPE-accredited hands-on training classes covering multiple tax compliance issues such as Sales & Use Tax management, European compliance, ACA reporting, customer experience and more!

These 40 educational sessions will showcase the latest news and best practices as they relate to topics like:

  • Tax Information Reporting for 1099s, ACA, and FATCA
  • Sales and Use Tax Compliance, Filing, and Reporting
  • Value Added Tax Compliance, Filing and Reporting
  • Customer Experience and Technical Tax Challenges
  • Optimally Implementing and Troubleshooting Tax Technology

Combined with keynote presentations from industry experts, hands-on training, and one-on-one support, you will learn how to leverage Sovos Compliance’s technologies and tax research expertise to maximize your business’ tax reporting security while minimizing cost.

See our agenda to learn more about SovosCon sessions and speakers.

SALES TAX HOLIDAYS IN THE NEWS

On July 23, 2015, CNBC published an article highlighting how Sovos Compliance breaks down the complexity of sales tax holiday information. With a total of 18 states and Puerto Rico now holding these retail holiday weekends, it is important for businesses to understand what is exempt in each jurisdiction.
 
Every state has its own rules regarding qualifying purchases, which can make it extremely difficult for both consumers and companies to keep track and make the right adjustments for shopping trips. Check out our
interactive Sales Tax Holiday Guide for more information.

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