DCL-02-04, 1099 Request

DCL-02-04

DATE: March 13, 2002

TO: ALL STATE IV-D DIRECTORS

RE: 1099 Request

Dear Colleague:

The Federal Office of Child Support Enforcement (OCSE) and the Internal Revenue Service (IRS) have reached an agreement to reinstate the processing of 1099 requests from the Federal Parent Locator Service (FPLS). Before the FPLS can begin re-submitting 1099 requests to the IRS, there are important decisions that states need to consider.

Annual Certification - Before the FPLS can accept any new 1099 requests, a state must send to the FPLS a completed Annual Certification to Request Information from Forms 1099 on the Wage and Information Document Master File for Project 1099 form. The recently revised form is attached. A description of the form and its use can be found in the FCR Interface Guidance Document at Section 9.6.3. The annual certification is an IRS security/safeguarding requirement. To expedite the processing of your request, the form may be faxed to the attention of Joan O’Connor at (202) 401-5647. The FPLS will submit its first monthly 1099 batch request to the IRS on April 4, 2002. To ensure that your requests will make that first monthly cutoff date, the FPLS must receive your certification form by April 1, 2002, and must receive the transmission of your requests by April 3, 2002.
Pending Requests - The FPLS has cancelled all prior 1099 requests. We are starting fresh, so do not expect any transactions relating to prior 1099 requests.
Legacy FPLS - The FPLS will no longer process state 1099 requests submitted via the legacy FPLS. All 1099 requests must be made via FCR transactions.
Increased Cost of 1099 Requests - 1099 operations were suspended last year as a result of escalating IRS costs for 1099 processing. While a new agreement with the IRS is in place that should ensure continued operation over the remainder of this federal fiscal year, we must take a serious look at the cost of the data compared to their benefits. In light of the benefits to be obtained from NDNH proactive matching and Financial Institution data matching, states should re-evaluate their continuing need to obtain 1099 information and, if appropriate, revise the criteria they use to select cases for 1099 requests. Additionally, 1099 information is generally stale upon arrival, given the normal delays in the 1099 reporting process. OCSE strongly suggest that cases not be submitted for 1099 matching until NDNH and FIDM matching have been conducted and any hits received are reviewed for action. OCSE will continue to analyze the costs and benefits of the 1099 data; we look forward to discussions with states about their value and continued use.

Your cooperation in this matter is greatly appreciated. If you have any questions please contact George Laufert at (202) 205-3605 or email at glaufert@acf.hhs.gov.

Sincerely,

Sherri Z. Heller, Ed.D.
Commissioner
Office of Child Support Enforcement

Attachment

cc: State IV-D Directors
Regional Program Managers
ACF Regional Administrators
1099 Contacts