IRS 1042 Webinar Oct 26

Do you pay royalties to foreigners? If so you should be filing IRS Form 1042 for each payment (not form 1099 MISC).

Learn more about Form 1042 and what the IRS is looking for by attending the Accounts Payable Now & Tomorrow webinar “Preparing for Form 1042 Audit” on Monday October 26, 2009.

Register at: http://ap-now.com/1042audit.html 

“Please join us for an information-packed 60 minutes on October 26, 2009 as Cyrus Daftary, an international tax and regulatory compliance expert :

  • Explains why tax withholding has become such a hot topic and what this means for your organization

  • Documents the cost of non-compliance

  • Reveals what you can expect during an audit

  • Shares insights into what the IRS really wants

  • Provides a better understanding of the IRS’ Internal Revenue manual

  • Tips for handling the audit process

  • Describes some validation tools being used today by major corporations”

The cost for this 60 minute semianr is $179, if you cannot attend you can order a CD of the webinar.

PS: If your roylty software does not track 1042 liabilities, your accounting software may.  Kensai International; a book publishing consulting firm, recommends that publishers utilize software; such Dynamics GP, Dynamics NAV (see knkPublishing) or AcumenBook that can generate the required 1042 forms.

IRS 1042 Reporting Penalties

Not reporting royalty payments to foreign authors on IRS form 1042-S can result in penalties that approach the amount of royalties paid to foreign authors.

A report from Deloitte lists the penalties that the IRS can apply;

  • Tax liability for 30% withholding
  • Interest on tax
  • Failure to deposit penalty
  • Interest on failure to file penalty
  • Failure to pay penalty
  • Failure to file form 1042-S penalty
  • Failure to provide payee statement penalty

 The Deloitte report also outlines the  10 step audit procedure that IRS agents follow when auditing the reporting of income paid to foreign recipients – including the payment of royalties to foreign authors.

Read the Deloitte Paper on Tax Information Reporting