Form 1099-K Letters to Businesses

Beginning next week, the IRS will be sending out approximately 20,000 letters to small businesses questioning the possible underreporting of income. The IRS matched the information reported on 2011 Form 1099-K that was sent to the business to the income the business reported on its tax return.

We understand that there will be three different letters:

1. Soft touch/inquiry
2. Correspondence audit, possibly questioning the underreporting of income
3. CP2000

The letters have not been released for review; however, we were notified of the IRS’ plans to mail these letters during a conference call. We were also told that the IRS will post the letters on IRS.gov next week.

This information was provided to us via the NATP.  If you have questions or concerns about this information please feel free to contact Tax On Wheels, LLC at 803 732-4288.