Should a corrected 1099-MISC be filed if the FATCA box on the form was checked mistakenly?

Should a corrected 1099-MISC be filed if the FATCA box on the form was checked mistakenly?

by Nancy G. Montanye, CPA | May 31, 2019

askacpaiconMy wife received a 1099-MISC with the FATCA filing box checked in error. Only box 7 has an amount, which is the correct box. The income in box 7 was reported on Schedule C in TurboTax. We didn't notice that the box was checked until after we filed, so the FATCA box was reported in TurboTax as not checked. Should she have the issuer submit a corrected 1099-MISC? The issuer is a small church in Ohio, and they are telling her it's no big deal and to just ignore it. She has received a 1099-MISC for the past several years from them, with income always in box 7 and always reported on Schedule C, but this was the first year that they erroneously checked the FATCA box.

Your responsibility is to report accurate information on your tax return. When a tax document is received that contains an error, you need to contact the payer to correct the problem, which you did.

The 1099-Misc FATCA box refers to the Foreign Account Tax Compliance Act. Since this box was admittedly checked in error, the church is responsible for filing a corrected 1099. Any penalties will be imposed on them. 

With the FATCA box checked, the IRS expects the taxpayer to file Form 8938, Statement of Specified Foreign Assets. Since the IRS has a robust matching program, cross-checking 1099 income to reported tax return income, you may receive a related IRS tax notice. No payment will be needed, only correspondence explaining the situation: that you contacted the payer (provide details or a copy of communications) and followed their advice about handling the error.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Nancy G. Montanye, CPA, is a sole practitioner in Williamsport, Pa. 

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
Financial FAQs

Search the most frequently asked finance and accounting questions and read the responses from PICPA members. Always consult a CPA before taking action.