Earlier today, Sovos announced it has acquired 1099 Pro, a California-based company that delivers tax information reporting software and services to tens of thousands of small and medium-sized businesses (SMBs), in addition to enterprise organizations. 1099 Pro has been a market leader for three decades, and it brings talented team members to Sovos to extend our deep bench of regulatory and technology experts.
This acquisition comes at a time when businesses most need a modern, complete solution to address the digitization of tax compliance. We have seen rapid and significant regulatory changes, increased filing complexity, and lowered thresholds for e-filing. Now is exactly the right time for 1099 Pro to join Sovos.
Why 1099 Pro?
The IRS decision to exclude the new Form 1099-NEC for non-employee compensation from the Combined Federal/State Filing program left businesses in a tough spot in the 2020 tax season. Thirty-five states, the District of Columbia and the federal government all required businesses to report this data, and many jurisdictions had unique reporting formats, making it even more difficult for businesses.
The 1099 NEC form change added complexity to the tax information reporting processes, while increasing the expense of printing and mailing all those forms to multiple tax authorities. At the same time, the threshold for electronic filing of 1099 and W-2 forms will be reduced for 2021 seasons, and the related requirements pose challenges to small business filers. Among other changes, those SMBs will need to obtain transmitter control codes from the IRS, and most will find the new requirements too complicated for the homegrown solutions or manual efforts they’ve been using.
As 1099 Pro joins Sovos, we will offer options from self-service downloads to enterprise software-as-a-service, all backed by subject matter expertise and decades of experience in tax information reporting. It’s good news for the customers we serve and the future customers we’re ready to help.
On the road to Solve Tax for Good® for every organization
Increasingly, the digitization of tax compliance and regulatory reporting affects every business, as well as government agencies and institutions of higher education. As part of our mission to Solve Tax for Good, Sovos is committed to meeting the needs of every company, from SMBs to large enterprises. 1099 Pro is the third acquisition of a new fiscal year that began on July 1, which reaffirms the Sovos commitment to removing the friction from tax compliance so businesses can prosper and communities can thrive.
Learn more about Sovos here.