Members in Government

CPA Letter, The, February, 2007 by Anonymous

February 2007

New IRS Reporting Requirement for Tax-Exempt Interest

news update

In general, Section 6049 of the Internal Revenue Code requires anyone (including a government entity) to furnish Form 1099-INT each year to anyone it paid $10 or more in interest. In general, tax-exempt interest is an exception. The Tax Increase Prevention and Reconciliation Act of 1985, enacted May 17, 2006, amended Section 6049 to eliminate the exception from reporting for interest on state or local bonds that is tax-exempt under section 103(a).

Notice 2006-93, issued by the Internal Revenue Service on Oct. 30, 2006, provides guidance on the new filing requirements and offers transitional relief from backup withholding requirements.

Reportable tax-exempt interest under...

Read the rest of this article with a Free Trial at HighBeam Research.

Premium Content Partnership | HighBeam Research provides an in-depth online archive library of reference works.