The Internal Revenue Service announced yesterday that lenders are not required to and should not file a 1099-C information return with the IRS or payee statement to the eligible recipient when all or a portion of a Paycheck Protection Program loan is forgiven under section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES).
Generally, entities are required to file the 1099-C information return with the IRS when they discharge at least $600 of a borrower’s indebtedness and to furnish a payee statement to the borrower.
IRS Announcement 2020-12 is intended to prevent erroneous underreporting notices that may be triggered by the filing of the information returns and confusion caused by the furnishing of payee statements to eligible recipients.
We are in this together,
Brinker Simpson & Company, LLC
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice & cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).