What This Letter Means
Letter 1865C goes to businesses and other filers of paper information returns: Forms 1099, 1098, 1095 and similar forms, with a Form 1096 or 1094 transmittal. It says some or all of the forms you filed couldn't be processed. The full title says it plainly: Information Return (Paper) Incomplete or Rejected for Processing.
The letter explains the problem in detail and states how many forms are affected. It asks you to resubmit corrected forms within 30 days of the letter date. It also tells you what penalties apply if you don't.
Common Reasons Forms Get Rejected
- Forms for more than one tax year sent together, or no tax year shown.
- A transmittal with no forms, or forms with no transmittal.
- No money amounts, or payments entered in the wrong box.
- Different kinds of income on a single form.
- The payer on the transmittal doesn't match the payer on the forms.
- Substitute forms that can't be read by IRS equipment, or damaged forms.
- Missing payer name, TIN or a mailable address.
What to Do
- Read the letter and any copies the IRS enclosed to see exactly what's wrong.
- Prepare a corrected, processable submission. Use official scannable forms.
- Send it within 30 days, as the letter directs, with a copy of the letter.
- Keep proof of mailing.
If You Don't Respond
If the forms are still unprocessable, the case goes to the Information Return Penalty Unit for the penalty for failure to file in the proper format. That penalty applies per unprocessable return. You won't get another warning letter first. You'll get a CP15 or CP215 penalty notice.
Fixing the forms now is much cheaper than fighting the penalty later.
If you received Letter 1865C or a penalty that followed it, call us at (813) 229-7100.