1. Defense Finance & Accounting Service DFAS Tax Office August 2010
1099 Tax Reporting Program
Welcome screen.
We hope that by the end of our presentation, you will have a better understanding of why you report payments made via government convenience check in the 1099 Tax Reporting Program, and the affect on the 1099 recipients (the individuals and merchants who receive the payments) if you report incorrect information.
Defense Finance & Accounting Service
DFAS Tax Office
August 2010

2. General – Program Description
What is the 1099 Tax Reporting Program (1099TRP)
Application created to collect & report to the IRS payments made by DoD for “services”.
The 1099TRP is a secure government web based tool for collecting payment data.

3. General – Convenience Checks
IRS form 1099-Miscellaneous
SANDY ’
S BAR & GRILL
222 SANDWICH BLVD
SOMEWHERE
WV 24946
Partial picture of an IRS form 1099-Misc.

4. General – Convenience Checks
Transactions for services are payments made for work performed rather than purchase of goods.

5. General – Convenience Checks
Examples of reportables
Dry cleaning of uniforms
Booth rentals for job fairs/recruiting
Maintenance fees
Instructor and speaker fees
Examples of non-reportables
Goods/products
Payments to any government agency
Payments to Federal tax-exempt business
By government agency we mean Federal, State, Local, City. Example the Post Office.
There are some businesses that are State tax-exempt, but not Federal. If you are in doubt, request a copy of the IRS Determination Letter. If they do not have one and they were paid for services, report the data.

6. System Access User roles & permissions
Agency Program Coordinator (APC)
Convenience Check Transaction Screen
Review
Add
Modify
Delete
Convenience Check Report
View
Print

7. System Access User roles & permissions
Approving Official/Billing Official (AO)
Convenience Check Transaction Screen
Review
Convenience Check Report
View
Print
Note: It is a conflict of interest to be able to approve payments & have the ability to manipulate payment data.

8. System Access User roles & permissions Checkwriter (Account Holder)
Convenience Check Transaction Screen
Review
Add
Modify
Delete
Convenience Check Report
View
Print

9. System Access Obtaining user id & password
Each person requesting access must complete
DD form 2875
DD form 2869

10. System Access DD form 2875 (versions 2009)
APC, AO, or Checkwriter completes
Type of Request, Date, System Name
Part I, all blocks
Part II, blocks 13 thru 20b
Your Security Manager completes
Page 2, Part III, all blocks
Tax Office completes
Location
Part II, blocks 21 thru 25
The current version is Some agencies have created a 2010 version, however, we do not accept it. Only the owner of the form, DISA is authorized to change the form.
You must have a positive background investigation. It is unnecessary to have a security clearance.

11. System Access – DD form 2875
We accept forms that are digitally signed, faxed, or mailed.

12. System Access DD form 2869 (version 2007)
APC, AO, or Checkwriter completes
Section I, all blocks
APC completes
Section II, all blocks
Tax Office completes
Section III, all blocks
The APC must have access; otherwise, the checkwriter’s access will not work. The checkwriter’s access is linked to the APC’s access. Will discuss this further on in the presentation.
The Program allows roles for a Primary APC, one Alternate APC, one Primary AO, and one Alternate AO per checkwriter.

13. System Access – DD form 2869
If you are an APC or AO, do not forget to list all of your checkwriters and their account numbers. Also make sure you contact us if a checkwriter leaves or with new account numbers.

14. Initial System Access Sun Java Plug-in Must be loaded on PC
Allows user to view application
Message will appear if not loaded
Contact your LAN/Technical Office to load

15. Initial System Access
Public Key Enabled (PKE) Registration w/Common Access Card (CAC)
Receive initial userid & password
Access the 1099TRP website
Required to register user id & password

16. Initial System Access Registering for PKE Open web browser
Input 1099TRP web address
.mil agencies:
.edu agencies:
.mil receives 1099TRP Homepage; .edu does not
Click link, “Enter the 1099TRP here”
On PKE Screen enter userid & password
Click Register Button
Receive message, “Successful Registration”
.edu users will not see the 1099TRP Homepage. We can send you are copy of the Convenience Check User’s manual.
Screen shows the two links for accessing the Program.
If you receive an error message and cannot PKE your machine, please us at Describe what happens and any message you receive. We may have to have your password unlocked and reset.

17. Initial System Access - PKE Screen
Picture of the PKE registration screen where the user id and password are input.

18. After PKE Registration
Initial System Access
After PKE Registration
Use CAC & CAC pin
No more user id & password
Must access Program at least once every 90 days to avoid being locked out
You can add a reminder to your calendar to log into the program every 90 days.

19. Initial System Access Steps to Sign into 1099TRP Open web browser
Enter 1099TRP web address
Receive 1099TRP Homepage
Click link, “Enter the 1099TRP here”
Select digital certificate, click OK
Enter CAC pin, click OK
Program loads
Receive Warning screen, click OK

20. 1099TRP Homepage Link to access the 1099TRP
Convenience Check User’s Manual
Informational messages
DD Forms 2875 & 2869
GSA SmartPay Presentation
What is & is not reportable
IRS Charity Site
Public/Private Colleges & Universities
Cannot stress enough using the Convenience Check User’s Manual. It has step-by-step instructions for accessing the Program, inputting, modifying and deleting data. It talks about each screen and what goes in it.
Informational messages like the Program is up, down, expected to be down, etc.
A list of what is and is not reportable. It contains examples to help.

21. 1099TRP Homepage
We cannot stress enough the importance of using the Convenience Check User’s Manual. It contains step-by-step directions for navigating the program.

22. System Overview Welcome screen First screen of Program
Provides current status of the 1099TRP
Convenience Check Data entry point
Tool bar

23. System Overview - Welcome Screen

24. System Overview Convenience Check Entry Transaction Screen
All users are permitted access to this screen
Convenience check data entered here
Divided into 3 tabs
Transaction Screen
Merchant Screen
Sole Proprietor Screen

25. System Overview – Transaction Screen

26. System Overview – Transaction Screen
Category
Non-Employee Compensation
Pay merchant/individual for services, not employee
Most often used
Rents
Pay to use a space or equipment
Medical & Heath Care
Pay doctor, dentist, or hospital
Gross proceeds paid to an attorney
Pay attorney for legal services

27. System Overview – Merchant Screen

28. System Overview – Merchant Screen
Tax Identification Number (TIN)
Social Security Number (SSN)
Individual or Sole Proprietor
XXX-XX-XXXX Always 9-digits, no letters
Employer Identification Number (EIN)
Merchant/Business
XX-XXXXXXX Always 9-digits, no letters
Must match name registered on IRS
records
Important: Protect the TINs

29. System Overview – Sole Proprietor

30. System Overview – Sole Proprietor
Sole business owner
Owner and business names different
William R Smith
Bill’s Lawn Mowing Service
Not partnership or corporation
Usually small business
Has SSN; rarely has an EIN
Sole Proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation.

31. Check Report Convenience Check Report Request
Screen is accessed from Reports menu
All users have access to their authorized accounts
Screen of where the Reports menu resides.

32. Check Report Convenience Check Report Request Can be sorted by
Check date
TIN
Merchant Name
Month
Year
Click Select box
Click Run button
Screen where Reports requirements are selected.

33. Check Report Convenience Check Report Request
ACCOUNT CONFUSED, DAZED A (Active)
CHECK # DATE AMOUNT TIN MERCHANT ISSUED? CATEGORY
/25/ XXXXXXXXX VICKY’S GOWNS OF GLORY NO NONEMPLOYEE COMPENSATION
2468 DRESS AVE, BOWLING LANE, OH 43352
Example of what data is shown contained on a Convenience Check Report.
The 1099 Issued? will appear as NO until the forms are issued in January. If the merchant’s payments total $600 and above, a tax form is issued. The column will read YES. If no form is issued, the column will remain NO.

34. General – Purchase Card
Do not input any purchase card data
DFAS receives & reports it electronically
DFAS receives the purchase card data electronically from the main banks, i.e. VISA & MasterCard. It is important for the checkwriter not to report the purchase card data, since this will result in duplicate reporting of the transaction.

35. Updates PKE - no more passwords after initial registration
Changes to reporting requirements Section 6041, Internal Revenue Code
2011
Banks issue tax forms for purchase card payments
Decision pending on banks issuing tax forms for convenience checks
2012
Reporting requirements apply to goods & services

36. Web Addresses .mil or .gov web address .edu web address
.edu web address
.edu – You are unable to view the website homepage. Sorry. We will you information such as what is and is not reportable with your password.

37. E-mail Address cco.checks@dfas.mil Access issues Access requests
General reporting questions
General Program questions
Hey, us

38. Half-Way Point
Are we done yet?
Nooo not yet.

39. Good To Know Enter, Save, Add. Enter, Save, Add…
Clear commands – Clear & Cancel
Remove unwanted record - Delete, Save
Find a record - Query
Move backward or forward - Previous or Next
Idle time 30 minutes – Oh, I’m knocked out & must log back in
The function keys allow duplicate check entries so be careful if you use them.
The “Clear” and “Cancel” buttons remove commands that are interfering with you reporting the data.
If you do not click the “Add” button after inputting data, you are typing over what you have reported. You will end up with one check reported.
If you are looking for a specific check or merchant, use the Query button.
To navigate through your check data, use the Previous button to go backward and the Next button to go forward.
If you take a break and are away from the program for 30 minutes, it will knock you out of the program. That is a security feature. Just log back in when you are ready.

40. Good To Know The tax year is Calendar Year, not Fiscal Year
December 31 is the absolute, last day
for inputting check data!!
Or was it December 32?
Encourage your checkwriters to input the check data before December
Are you planning on taking leave in December? You really need to have your input up-to-date by December 1. Something always happens in December - We take leave, you take leave, the merchant takes a vacation, system issues.

41. You are Responsibilities
Whose responsible for inputting & ensuring the convenience check data is reported correctly?
You are

42. Responsibilities – All
Privacy Act Information
TINs
Names & Addresses
Account Numbers
Pssssst….secure it
We cannot stress enough the importance of
Keeping this information secure.

43. Responsibilities - Checkwriter
Obtain merchant info for tax reporting
Legal name & address
Tax Identification Number (TIN)
Obtain check data
Check number
Date check was written
Check amount
Brief description of what was purchased
Input merchant & check data at least monthly
Review input for accuracy
Use something to capture the merchant’s legal information. We recommend the IRS form titled “Request for Taxpayer Identification Number and Certification (form W-9)” found on our homepage or at
The data needs reported at least monthly. Data can be reported the same day the check is issued if you would prefer.

44. Responsibilities - APC
Ensure Checkwriter obtains merchant &
check data
Ensure check data is input at least monthly
Review input for accuracy
Input data in the absence of Checkwriter
Checkwriters need informed of anything that will affect their reporting. If you, the APC, are leaving, the checkwriters need to know who is replacing you.

45. Ensure Checkwriter obtains merchant &
Responsibilities - AO
Ensure Checkwriter obtains merchant &
check data
Ensure check data is input at least monthly
Review input for accuracy

46. Data Review Merchant data free of misteaks?
Merchant data consistent?
Merchant data free of misteaks?
Sole Proprietor correctly identified?
Check number correct? No duplicates?
Dollar amount correct? No extra zeros?
Only reportable data input
Reportable data input for any $ amount
($600 threshold applies to the Tax Office)
There is a $ threshold for reporting payments, exception $10.00 for Royalties. Our office is the final reporting entity; therefore, the threshold applies to our office, not yours. Input all reportable check data regardless of the $ amount.

47. Data Review
What happens when the data is
input incorrectly?

48. Data input incorrectly in 1099TRP APC, AO, & Checkwriter
do not review data
DFAS issues tax forms & reports data to IRS
IRS forms are issued to “real” people. What you report affects their income and their reporting to the IRS. No one wants to be audited by the IRS.
Angry merchant contacts DFAS
IRS audits merchant

49. What happens when an angry merchant contacts us?
You could be taken on a three-hour tour

50. Audits
What happens when you are audited and you did not report your check data?
You’ll be sorry
And you will be audited at one time or another.

51. So what do I need for an Audit?

52. Audits APC & AO List of Checkwriters AO & Checkwriter Checkwriter
Account numbers
1099TRP Convenience Check Report
AO & Checkwriter
Receipts/invoices for transactions
Checkwriter
Logbook, checkwriter, & Internal records

53. Tax Office

54. Tax Office End-of-Year 2009
In November and December, we received approximately 343 System Access Request forms, 1,523 password reset requests, 772 access issue inquiries, and 2,369 general and informational inquiries.
We are still adding new account number due to the SmartPay II. We added 957 new account numbers.
It really is in your best interest to have everything up-to-date, all accesses approved, and all earlier check data reported before the November/December timeframe.
The best way to contact us at the end of the year is to us.

55. Tax Office - Contacts Vicky Waldron – Primary Sandy Major – Alternate
Gayla Vincent – Program Manager
fax number:
DSN
Contact me?
Dy-no-mite!
Contact our office with your inquiries and technical problems. Do not contact the DFAS Web PMO; they can not assist you.

56. The End
Mother elephant and baby elephant walking away signifies the end of the presentation. .