I'm late on filing a 1099 for a contractor, what is the penalty for missing the deadline?

What exactly counts as "reasonable cause" though? Is just saying "I didn't know" enough for the IRS to waive the penalty? And do you have to submit some kind of special form to request the penalty waiver?

Reasonable" cause typically means circumstances beyond your control prevented timely filing. First-time mistakes can sometimes qualify, especially for small businesses new to filing requirements. The key is showing you acted in good faith and'weren t willfully neglecting your obligations. You'don t submit a special form initially. First, file your late 1099 as soon as possible. If you receive a penalty notice, then you can respond with a letter explaining your reasonable cause request. Include any documentation supporting your case - for example, evidence this is your first time with contractor payments requiring 1099s, or documentation showing'you ve taken steps to ensure compliance in thefuture.

Does this taxr.ai thing actually connect you with a real person or is it just some automated system? I'm dealing with a much more complicated 1099 situation (multiple contractors, some international) and wonder if it would be helpful.

I'm skeptical about these online services. How does it actually help with tax penalties? Does it just give general advice or does it actually help prepare the explanation letter? What's different from just Googling "reasonable cause IRS"?

It's actually an AI system specifically designed for tax documentation. It doesn't connect you with a human, but it analyzes your specific situation based on the information you provide and gives personalized guidance. For multiple contractors including international ones, it would definitely help sort through the different requirements. It goes way beyond general advice - it helps draft the actual explanation letter based on your specific situation and includes references to relevant tax codes and precedents. It's different from Google because instead of having to piece together information from different sources, it gives you a complete solution specific to your circumstances. It also keeps up with the latest IRS guidelines which isn't always true for random Google results.

Wait, how exactly does this work? Do they somehow have a special line to the IRS or are they just willing to sit on hold forever? And do they have access to your personal info or tax details?

This sounds like BS honestly. The IRS phone system is deliberately designed to be impossible to navigate. I seriously doubt some third-party service has magically solved this problem that's existed for decades. If it were that easy, everyone would be doing it.

They don't have any special line - they use technology to navigate the IRS phone system and wait on hold so you don't have to. When an agent answers, you get a call connecting you directly to that agent. It's basically automated hold-waiting. They don't need or have access to any of your tax details or personal information. All they do is connect the call - once you're connected to the IRS agent, it's just you and the agent talking. The service just handles the frustrating part of getting through the phone system and waiting on hold, which can sometimes take hours.

Wait seriously? I had no idea about Form 1096! Is that something I can just download from the IRS website? And does it need to be mailed or can I submit it electronically somehow?

Yes, Form 1096 is required when submitting paper 1099s to the IRS. It's essentially a cover sheet that summarizes all the 1099s you're submitting. You can download it from the IRS website, but it needs to be the official red-ink scannable version - a regular printout won't be accepted. For your situation, you might want to consider e-filing instead. If you e-file your 1099, you won't need the 1096 at all. There are several IRS-approved e-filing services that make the process pretty straightforward, and it's generally faster and eliminates the risk of mail delays. Plus, you get confirmation when the IRS receives your submission.

Does the contractor copy have the same deadline? Like, are you penalized separately for sending it late to the contractor versus sending it late to the IRS?