1200 Tax Compliance

Agencies are to comply with the Internal Revenue Service (IRS) rules regarding compliance with tax information reporting, “B” notices, backup withholding and making timely deposits with the IRS. This policy outlines responsibilities for the central processor and individual agencies to comply with IRS requirements. The central processing agency, NC Office of the State Controller (OSC), will submit the electronic 1099-MISC file to the IRS and the NC Department of Revenue in a timely manner. Each agency is responsible for filing any amendments related to the original 1099 filing and issuing all related tax deposits. All other tax information reporting is the sole responsibility of each agency. Tax Identification Number (TIN) Matching is an Internal Revenue Service internet-based pre-filing e-service that allows authorized payers the opportunity to match 1099 payee information against IRS records prior to filing information returns. The TIN Matching process compares the information provided on the OSC Substitute W-9, IRS Form W-9 or IRS W-8 type forms (name and TIN) with IRS records. TIN Matching reduces the potential of backup withholding errors, penalty notices and the error rate in TIN validation. Utilizing this service improves the accuracy of the vendor master database. See IRS Publication 1281, Backup Withholding on Missing and Incorrect TIN(s).

Each state agency/institution must comply with Federal information returns and Form W-2 reporting requirements. This includes developing procedures for accumulating calendar year data and preparing the appropriate information returns in the IRS acceptable media.