During the last legislative session, House File 2455 was passed initiating changes in governmental audit requirements. Currently, all Iowa cities with a population over 2,000 are required to receive an annual audit. Cities with population from 700 to 2,000 are required to be audited once every four years and cities with a population under 700 are not required to be audited, except by petition of the citizens. The Cities had the option to hire a CPA firm or the Auditor of State to perform the audit through the request for proposal process, and cities paid a filing fee based on budgeted expenditures to the State Auditor’s Office with the submission of their report.

If you haven’t yet filed forms 1096 or W-3 with the IRS or SSA, it will be easier to fix a mistake on them without the need to file amended returns. However, if you have already filed forms 1096 or W-3 with the government, and there are errors on those forms, then you will also have to file amended reports which can be complicated and time consuming. So, file those 1096s and W-3s closer to their due date to avoid potential amended return filings.

Basically, 1099 reporting requirements will continue to be the same as they’ve always been. This change will significantly decrease the compliance burden small businesses were anticipating. However, this recent change does not do away with the requirement that payers obtain and retain a form W-9, Request for Taxpayer Identification Number and Certification, for all payees.

In addition to the changes made for Bonus Depreciation and 1099 reporting, several other items of interest were changed by the recent legislation for 2011 and 2012:

Beginning in fiscal year ending June 30, 2011, governments are required to separately identify amounts that are non-spendable. All other amounts will be classified according to resource constraints. The new classifications are as follows:

We would like to remind our clients of the importance of the new W-9 rules set into effect by recent tax legislation. We cannot stress enough that your attention to this new rule is crucial.