In accordance with IRS regulations, we are required to report payments of $600 or more made to non-
incorporated companies, partnerships, or individuals for rents or services (including parts and materials,
if those parts and materials are incidental to completing the service) during a calendar year. The
requirement extends to gross proceeds paid to an attorney. This information is sent to the IRS on FORM
1099-MISC (Miscellaneous Income). Locations are also required to report certain information to the
California EDD on Form 542 (refer to the section “Form 542 - EDD Reporting Requirements” for a
complete explanation of what is required by the EDD).
IRS Reporting Requirements
The Diocese of San Diego is a corporate entity. As such, we are required to report the payments noted
above to the IRS on an aggregate basis - that is, the sum of all payments made by all parishes, schools,
and other diocesan organizations (locations) to an individual or a company are combined and reported to
the IRS on one FORM 1099-MISC. We therefore ask each location to report information about ALL
payments made to non-incorporated companies, partnerships or individuals for services during a calendar
year even if the payments for your location are less than $600. Once the finance office receives the
information from all the locations, it combines the information, validates it, and issues 1099s for
companies/individuals that were paid a total of $600 or more from all locations. Effective January 2005,
this information is required to be reported to the diocese on-line by the deadline (which is generally the
end of the first week of the calendar year). Proper planning is therefore crucial.
When your location hires an individual or company to perform services, you should FIRST have them
fill out a W-9, Request for Taxpayer Identification Number (TIN) and Certification. This form
should be kept on file at the location and will be used at year-end when the location submits the
information to the Diocese. Form W-9 can be downloaded from the IRS website. We’ve also posted
copy of form W-9 on the diocesan website - in the finance section
The IRS is permitted by law to assess a penalty for forms that are filed which are incomplete or do not
include the proper information. They are also permitted to assess a penalty for forms that are filed late.
We therefore stress the importance of obtaining the necessary information up front, before the
individual/company performs any services or receives any payments, to avoid problems at year-
end. Effective January 2006, a penalty will be levied on a location for forms that are filed late or with
incomplete information. A penalty may also be charged for forms filed with incorrect information,
unless the location had the vendor fill out a W-9 and the vendor provided incorrect information.
Diocese of San Diego – Office for Finance April 2005