Businesses face new and revised information return requirements.

• Author: Fox, George G.

Once viewed by many as a backwater of tax law, the area of third-party information reporting has become more important to businesses and tax practitioners. In recent years, Congress has tightened penalties for noncompliance, and the IRS has stepped up its enforcement activities. As one indication of the extent of ongoing developments in this area, the following list outlines information returns introduced in calendar-year 1997, followed by a brief summary of the more significant changes to existing returns.

New Information Returns

* Form 1099-LTC, Long-Term Care and Accelerated Death Benefits: Payments under long-term care insurance contracts and accelerated death benefits paid under life insurance contracts must be reported on Form 1099-LTC. Payors include insurance companies, governmental units and viatical settlement providers.

* Form 1099-MSA, Distributions From Medical Savings Accounts: Distributions from medical savings accounts (MSAs) paid either to a medical service provider or to the account holder must be reported on Form 1099-MSA.

* Form 8851, Summary of Medical Savings Accounts: Trustees of MSAs must report on Form 8851 the number of MSA accounts established. The form was due by June 2, 1997, to report MSAs established between Jan. 1, 1997 and Apr. 30, 1997. A second filing is due by Aug. 1, 1997, to report MSAs established between May 1 and June 30, 1997.

* Form 5498-MSA, Medical Savings Account Information: This form was developed for use by MSA trustees or custodians to report contributions, rollovers and fair market value information. Form 5498-MSA filers must remit Copy B, statement to participants, by June 2, 1998. Participants may be given (but are not required to be given) a statement of the Dec. 31, 1997 value of their accounts by Feb. 2, 1998.

Changes to Existing Information

Returns

* Form W-4P, Withholding Certificate for Pension or Annuity Payments: Revisions to this form include the standard annual changes to the personal exemptions claimed on the "Deduction and Adjustments Worksheet," as well as to the tables for calculating the amount included on line 2 of the "Multiple Pension/More than One Income Worksheet."

* Form W-9, Request for Taxpayer Identification Number and Certification: Instructions to Form W-9 were revised to reflect the following changes: 1. The requirement to obtain individual taxpayer identification numbers (TINs) for nonresident aliens who are ineligible to obtain social security numbers. The...