Episode 25: E-Delivery Rules for 1099s: Why Emailing PDFs Isn’t So Simple

This week on Information Return Intelligence, we break down one of the most overlooked areas of 1099 compliance: electronic delivery to recipients.

Most organizations are used to thinking about e-filing with the IRS—but what about actually getting the form to the recipient? If you’re emailing PDFs of 1099s (and let’s be honest, most people are), there’s a good chance you’re not fully compliant with IRS rules.

In this episode, Jason walks through:

Why 1099 e-delivery rules are tied to W-2 regulations
What the IRS actually says about furnishing statements electronically
The three key requirements: consent, format, and notification
Why a simple “sure, email it to me” isn’t enough
How major e-filing platforms handle compliance (and why it matters)
The real-world risk of ignoring these rules—even if “everyone else is doing it”

The takeaway? This isn’t a gray area. The rules exist, they’re detailed, and they’re enforceable—even if they’re widely ignored.

If your current process involves emailing 1099 PDFs without a formal consent workflow, this episode will make you rethink that approach.

Key Topics Covered
IRS Publication 1099 and electronic furnishing rules
Reg. §31.6051-1 and its application to 1099s
Recipient consent requirements (and why they’re more complex than expected)
Substitute statement formatting (Pub. 1179)
Website posting and notification requirements
Practical compliance strategies for AP teams and tax professionals
Who Should Listen
Accounts Payable professionals
Tax practitioners and accountants
Anyone responsible for issuing Forms 1099 or W-2
Organizations using (or considering) electronic delivery methods
About the Show

Information Return Intelligence is a fast-moving weekly podcast focused on Forms 1099, W-9, 1042-S, and everything in the world of information reporting—brought to you by IOFM.

Transcript

SPEAKER_00 0:00

This week on Information Return Intelligence, we dive into the surprisingly complex and oftentimes not talked about rules relating to electronic delivery of 1099s and W-2s to recipients. And welcome to Information Return Intelligence, sponsored by IOFM. I'm Jason Dinason. So on this week's episode, I wanted to talk about electronic delivery of 1099s to recipients. So we focus on 1099s on this podcast, but just know that these rules apply to W-2s as well. And in fact, the 1099 rules actually draw from the W-2 regulations. And we touched on this last week when we were talking about the IRS or the Treasury Department relaxing the rules for issuers of Form 1099 DA to make it easier for them to deliver 1099 DA electronically. And how the Treasury Department is seeking public comment on perhaps changing the regulations for all issuers. Well, what exactly are we talking about with that? This is something where it's not hidden. In fact, at length in publication 1099. But I feel like this is something that a lot of organizations and a lot of accountants and tax pros don't know about. The rules relating to electronic delivery of 1099s to recipients. Now we all know good and well that PDF versions of 1099s and W-2s are flying around all over the place. Organizations have a contractor, they want to get that contract to the 1099, so you just email a PDF to that guy. Do these rules cover sending a PDF by email of a 1099? Well, there's nothing that explicitly says one way or another, which shouldn't completely shock you, but I think the answer is yes, because note the wording in publication 1099. If you're required to furnish a written statement, that means a 1099, to a recipient, you may furnish the statement electronically instead of on paper, but only if you meet the requirements discussed later in this section in that publication. And we have to go to one of the regulations relating to W-2s, which the IRS in publication 1099 says this regulation relating to W-2s applies to 1099s as well. And this regulation, if you care, it's regulation 31.6051-1, says you may furnish the W-2 in an electronic format in lieu of a paper format. And again, that regulation applies to 1099s as well. So this implies your options are send the form to your recipient on paper. Or your other option is electronic format, but you have to jump through hoops. Whether people do jump through these hoops or not before sending the PDF out, I think we know the answer to that. Keep in mind, though, the argument of everyone else is doing it won't hold water if you draw the short straw and the IRS starts poking around. So let's get into it. Here are the requirements consent, format, posting, and notification. Now I have an article on Substack that goes into great detail on this. I'm going to kind of summarize this from a little bit higher level view on this podcast and then talk about how to manage all of this. So for consent, the IRS in publication 1099 says the recipient must consent in the affirmative and not have withdrawn the consent before the statement is furnished. And the consent has to be made electronically in a way that shows that this person can access the statement in the electronic format in which it will be furnished. And then there's this long list of bullet points that have to be displayed in the consent. So it's not enough to just send an email to your contractor saying, hey, can we send you a PDF of your 1099? And they write back and say, sure. That actually would be one piece of it, but there are like six, no, seven. I'm looking at it here. There's seven bullet points, which the IRS says have to be prominently displayed in the consent. Check out the Substack article to see what those are, but it's things like the scope and duration of the consent, how the person can get a paper copy even after giving electronic consent. Then the remaining requirements are format, posting, and notification. So format means that you are providing a PDF or whatever, whatever, not just PDF, whatever electronic format you're providing it in, what the recipient sees when they open it up is going to comply with IRS requirements for substitute statements. So in other words, it has to either be the literal 1099, just in digital format, or in some kind of format that meets IRS specifications. There's actually a publication that goes into this, publication 1179. Posting means if you're providing it on like a secure website, you're providing the form on a secure website, you have to make the form available through at least October 15th. So if it's a 2025 form, you have to make it available. If you're posting it to a secure website of some sort, you have to make sure it's available through at least October 15th of 2026. And then notification means that if you're posting it somewhere, you have informed the recipient that it's there and given instructions on how to go get it. And before we go further, let's hear a word from our sponsor, IOFM, the Institute of Finance and Management. As you're listening to this, it's about two weeks away, if you're listening live, two weeks away from the spring conference in Orlando. There's still time to sign up for that. Or, you know, you can't make travel arrangements that fast, that's okay. Become an IOFM member anyway. Join 10,000 of your peers in the accounts payable and accounts receivable and finance realm who want to learn all about information forms. I do a lot of things with IOFM. But anything else relating to finance, cash management, they publish white papers, they have a spring conference, a fall conference, this year's fall conference will be in Austin, Texas. Periodic webinars, which are eligible for continuing education if you need CE hours. Check them out at Iofm.com. And now back to the show. So how do you manage all of this? Especially since many of our listeners, this may be the first time that you've heard about this. Well, I know it's annoying to have to get consent just to email a PDF of a 1099 to a contractor. And I would agree with you when your response on this is, oh, nobody does that. Well, the reality is they do. There are places that do. I know there are. All of the big players out there on electronic filing of 1099s, the platforms that you can work with, if you provide them with your recipient's email address, they will send the 1099 electronically. And they care about this stuff. They make sure that they are meeting these specifications. They care very deeply about it. But you could say, well, average organizations, they don't do this. And they're emailing out PDFs and no one ever gets in trouble. I would agree with that, but it's like anything else. It's like you might not get pulled over for speeding, but you might. And if you do get pulled over for speeding, you can't say, well, everyone else is speeding. Why did you pull me over? That that doesn't fly very well. The regulations say what they say. This isn't a hypothetical. This is just like the W9 issue of those single-member LLCs taxed as sole proprietors, where they're not supposed to give you the EIN of the LLC, but they do a lot of times. You know, it may be something that people do, but it's not right. And it's like if you read the instructions, it's pretty clear what to do. It's the same thing here. The instructions, and it's not just the instructions, it's the regulations say what they say. So I think that the best answer is review your processes. What do you need to do to make sure that you are compliant with what the regulations say? Why chance it? Follow the regulations, know you're being compliant, and then you don't have to worry if the IRS ever starts poking around. You're following the regulations. That'll do it for this week's episode of Information Return Intelligence, sponsored by IOFM. We'll catch you again next week.