Creating the 1099 Audit File (F045144)

The Create 1099 Audit File program (P045144) updates the 1099 Audit File (F045144) with the current 1099 reportable expense amount for each voucher by company and object/subsidiary account. The system selects only posted expense records for those suppliers who are assigned a person corporation code of P or N. The 1099 Audit File provides all of the detail for the records that the system creates when you run the Build G/L Workfile.

When you run Create 1099 Audit File, the system retrieves the value in the Calendar Year processing option from the 1099 Processing Option Setup program (P04510STUP) to select records that have the G/L payment date within that calendar year for expense accounts set up in the AAIs. The program verifies whether any processed records already exist for the current year in the 1099 Audit File. If the program identifies processed payment records, that is records with 1 in the Closed Item field, for the current year it stops and issues an error report.

When you run this program, the system creates three types of records and updates the value of the Record Code field (1, 2, and 3) accordingly. The system creates the following records:

• Type 1 records for each voucher with 1099-reportable expenses for the current year based on the PXxxxx AAIs. The system summarizes voucher detail records by company, and then by object and subsidiary accounts. The system recognizes the company associated with the expense accounts, as well as the company on the voucher, and updates the corresponding company field in the F045144 record.

• Type 2 records for each payment of a 1099-reportable voucher expenses for the current year based on the PXxxxx AAIs. Because the payment might include amounts that were not 1099-reportable expenses and might be less than the voucher expense amount (due to discounts), the system recalculates the payment amount that it uses in Amount field in the F045144 file as follows:

  • The system first subtracts any non-1099-reportable expenses from the payment amount, and then allocates the remaining payment amount to 1099-reportable voucher expenses in ascending order.

  • If there is any remaining voucher expense amount, the system adds this to the Remaining Amount field in the record. Depending on the total expenses related to the voucher, the Type 1 and Type 2 amounts might not net to zero and might leave a balance in the Remaining Amount field.

  For example, you enter voucher 8769 for $1000.00 with a $10.00 discount and create payment 21222 for $990.00. There is a $200.00 non-1099 reportable voucher expense that leaves a balance of $800 of 1099 reportable expenses updated to the Type 1 record. The system allocates the remaining payment amount of $790.00 to the voucher expenses, but because there was a $10.00 discount, there is a $10.00 amount remaining on the voucher. The system updates the Amount field on the Type 2 record with $790.00 and updates the Remaining Amount field with $10.00.

• Type 3 records, created for the opposite amount of the Type 2 records, to use when the system builds the G/L workfile. The system copies each Type 2 record and uses the reversing sign for the Amount field. For example, if the Type 2 Amount field contains 1000-, the Type 3 record Amount field is 10.00. When you run the Build G/L Workfile program (P04514), the system includes the Type 3 records.

You can run the Create 1099 Audit File program multiple times, if necessary. The system deletes all records that do not contain a 1 in the Closed Item field and rebuilds the file.

Use the Payments with Discount processing option to specify whether you want the program to use the gross or net payment amount as the value of the Amount field in the F045144 file.

Note:

Whether you enter 1 or leave the Payments with Discount processing option blank, the program considers only that part of the payment that applies to 1099-reportable expenses.

See also:

• Create 1099 Audit File Program Detailsfor more information about the Create 1099 Audit File program.

• Reviewing the 1099 Audit File for information about reviewing the contents of the 1099 Audit File (F045144).

Before You Begin

• Post all vouchers and payments for the 1099 reporting year.

• Review and update processing options in the 1099 Processing Option Setup program (P04514STUP)

• Set up or verify AAI items PXxxxx using the Automatic Accounting Instructions program (P0012)

• Run the Update BU.Obj.Sub to Journal Entry program (P09806), if you have made changes to the Account Master file (F0901).

• Run the Audit File Close program (P04514CMP) to mark prior year 1099 Audit File (F045144) transactions as processed.

Navigation

From The G/L Method (G04221), choose Create 1099 Audit File

Received Not Vouchered Accounts

The system evaluates each of the G/L distribution accounts in the Account Ledger (F0911) records that correspond to the selected voucher to determine whether to include the record in the F045144 file:

• If the G/L account matches an RNV account in either the 4320 (Received Not Vouchered) or 4355 (Received Not Vouchered Tax) AAI tables in the Distribution & Manufacturing AAIs (P40950), the system selects corresponding records from the Purchase Order Receiver file (F43121) that have the value 2 in the Match Type field.

  The system then validates whether the values of the Object and Subsidiary fields in the F43121 record are included in the 1099 PX AAI ranges:

  • If the account is included in the PX AAI range, the system includes it in the 1099 Audit File.

  • If the account is not included in the PX AAI range, the system does not include it the 1099 Audit File.

• If the G/L account does not match the RNV account in either the 4320 or 4355 AAI tables, the system validates whether the G/L account exists in one of the PX AAI ranges:

  • If the account is included in the PX AAI range, the system includes it in the 1099 Audit File.

  • If the account is not included in the PX AAI range, the system does not include it the 1099 Audit File.

Therefore, if the G/L distribution account associated with the voucher is in the Distribution & Manufacturing AAI table (4320 or 4355), the system does not validate whether it exists in the 1099 PX AAI ranges; instead, it looks at the accounts associated with the F43121 record. If your business process does not update the Object and Subsidiary fields on the F43121 record, it does not locate a corresponding 1099 AAI and does not include the records in the 1099 Audit File.

Purchase Card Transactions

If you track merchants in the Purchase Card (PCard) Management system, you can generate 1099 returns using the G/L Method. The system uses the purchase date, which it stores in the G/L Reference Date field (DRFJ) of the F0911 record to determine whether the payment is in the current 1099 reporting year, and then uses PXxxxx AAIs to determine whether the account is reportable for a 1099.

To update the G/L Reference Date with the purchase date from the PCard transaction, you must run program P01PQD1. This program is not located on a menu; you must access it from the Versions List. For additional information, see document 1499477.1 (Mandatory Program Required to Process PCard Transactions using the G/L Method) located on My Oracle Support.

Processing Options

See Create 1099 Audit File (P045144)

Data Selection

This program includes predefined data selection to eliminate void payments and to select only posted payments. Do not change the data selection.