Missed 1099-DIV filing

[KJ Judd]

I got a new client last fall. It's a C corp. with a June year end. Before I took over the accounting & taxes, the corp paid a $25,000 dividend to the sole shareholder in the prior fiscal year.

Although I prepared the 1099-MISCs for the corp., I did not file a 1099-DIV. To be honest, I only have two C corps. (most of my corps are S) and didn't realize the dividend was paid during the calendar year. Another firm prepares the individual's tax return. (When I took on the client, I told him that it's highly unusual to have a different preparer for individual & corporate tax returns because of difficulties in tax planning & something may get missed.) I am nearly positive the individual's return does not include the $25,000.

My question is do I need to file the 1099-DIV at this point? It would be late. Or do I just wait to see if we get a notice? Obviously I need to bring this to my client's attention & recommend he amend his individual tax return.

[OldJack]

It is only a small penalty for not filing/late filing the 1099-DIV but the important thing is the individual tax return reporting as the IRS will know of the dividend without the 1099-DIV. A C-corp must identify a dividend on the 1120 reconciliation of page 4, so the IRS would know about it from there. I would file the late 1099-DIV mainly because of the large amount and to ensure that the other preparer has to file an amended 1040X if not reported on the original 1040.

[veritas]

I agree with OldJack. I once had an audit and a 1099 was not completed for rent. The agent wanted it done. I did with no penalty.

[sea-tax]

I would agrre with the others , however i would notify the client first what you are going to do . You do not want them to find out from a IRS notice.