In the United States, the Form 1099-OID is a tax form intended to be submitted to the Internal Revenue Service by holders of debt instruments (such as bonds, records, or certificates) discounted on purchase to report tax differences between the values Actual instrument and discounted purchase price. Some misinformed informers do not understand the purpose of the form and misinterpret it on their tax return. Others intentionally misreported forms, aimed at reducing tax payments, or for generating large refunds, in so-called 1099-OID scams. This method works because the IRS does not re-examine tax returns with the reported 1099-OID information. Peter J. Reilly, writing for Forbes, explains that "[w] an amazing hat about the OID scheme, is that it has absolutely nothing to do with OID, other than using the same form". In essence, the fraudulent submission of the 1099-OID form is successful because inconsistencies on the form are not noticed, and the tax return is calculated with inaccurate information submitted on the form.
Video Form 1099-OID
See also
- Form 1099
Maps Form 1099-OID
References
Source of the article : Wikipedia
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