REMICs consequently provide regular interest holders with IRS Form 1099-INT (and Form 1099-OID
, if applicable).
The perpetrator files a fake Form 1099-OID
to justify a false refund claim on a corresponding tax return.
The IRS notes that this latter assumption is at odds with reporting requirements of Form 1099INT, Interest Income, and Form 1099-OID
, Original Issue Discount, and that the customer is not bound by the assumptions that the broker uses to satisfy the reporting requirements.
Barel's technique involved collecting information about her customers' debts--credit cards, car notes, mortgages, etc.--and then reporting those outstanding debts as Form 1099-OID
deductions, making it look like the entire amount of the debt was withheld as taxes.
Banks and other financial institutions must supply their depositors who earn original issue discount with a statement (Form 1099-OID
) setting forth the amount of original issue discount deemed to have been received during the year.
The issuer of a taxable bond with OID is required to issue Form 1099-OID
to report the discount to be included as ordinary income on the taxpayer's current-year income tax return.
Although the law is unclear on this point, for interest deemed paid, it is assumed that the lessee should file Form 1099-OID. Thus, the payor or lessee must be prepared to make the calculations amortizing payments between interest and rent and report those amounts on the applicable Forms 1099.
467 rental agreement with decreasing payments, presumably Form 1099-OID would be filed by the lessor for the deemed interest payments back to the lessee, while the lessee would report the actual payments of rents on Form 1099-MISC.
Corporations issuing debt obligations now have more definitive guidance for computing the amount of OID for purposes of Form 1099-OID
reporting and for deducting interest expense o their tax returns.
6049 requires brokers and other middlemen to file annual information returns (Form 1099-OID
) with the IRS and to forward a copy to the instrument holder of record.
If the interest incurred is considered to be OID, the amounts would presumably be reported on Form 1099-OID
, Original Issue Discount.