IRS Launches Online Tool to Review 1042-S Data Before Filing
Compared to IRS Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, completing and filing IRS Forms 1099-MISC and 1099-NEC is easy! But now Form 1042-S filers have help. The IRS has announced the launch of a new online tool that enables “withholding agents” (that would be accounts payable departments, among others) to run a data quality review before filing their 1042-S forms to the IRS.
The tool does not replace filing 1042-S forms—you must still submit the forms to the IRS by the March 15 deadline. But this new tool, offering a quality review of your 1042-S data, can help you identify and correct data errors as you prepare your forms for filing.
Use of the tool is voluntary, but the IRS notes that it will consider its use by a filer when the IRS is “making enforcement and penalty determinations.” So, consider running your 1042-S data through the tool.
The tool is designed to accept Form 1042-S data in standard file formats that most back-office systems can generate. After uploading the data, the user will receive a report indicating errors and potential errors.
The IRS also notes, “Even though the tool identifies data errors, the withholding agent remains responsible for making changes to the data on the agent’s system of record before submission to the IRS. The list of resources below will help agents understand and correct errors before submitting the Forms 1042-S.”
The online-access tool by Fairfax Software includes a tutorial and set of videos explaining how it works, but you have to go ahead and register here to access them. Companies can use the tool as many times as necessary, including revised data. Also, according to the IRS announcement, the IRS has no access to users’ data submitted to the tool.
“U.S. withholding agents play an important role in helping the IRS administer the tax code, so we are delighted to be able to provide this tool free of charge to assist agents in meeting their filing requirement,” said Nikole Flax, IRS Large Business and International division commissioner.
Find out how VendorInfo can help you gather vendor tax information: contact us.
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