Form 1099-LS (2020) Checklist: Complete Filing Guide
Purpose and Overview
Form 1099-LS reports reportable policy sales under IRC Section 6050Y for the 2020 tax year. This form documents acquisitions of life insurance contracts or interests in such contracts when the acquirer lacks a substantial family, business, or financial relationship with the insured person. The December 2019 revision serves as the official version for all 2020 calendar year reportable policy sales.
Critical Filing Deadlines for 2020 Tax Year
Understanding the specific deadlines is essential to avoid penalties. For 2020 calendar year transactions, acquirers must meet the following requirements:
- Furnishing to Payment Recipients: Provide Copy B by February 15, 2021
- Furnishing to Issuers: Provide Copy C by January 15, 2021, at the latest. However, the form must be furnished by the later of 20 calendar days after the reportable policy sale or five calendar days after the end of the applicable state law rescission period if that later date occurs before January 15, 2021.
- Filing with IRS (Paper): Submit Copy A with Form 1096 by February 28, 2021
- Filing with IRS (Electronic): File via FIRE system by March 31, 2021
Step-by-Step Filing Instructions
Obtaining and Preparing the Form
Obtain the December 2019 revision of Form 1099-LS, which is the current version for 2020 calendar year reportable sales. Verify that the form header states “For calendar year” with a blank year field where you will enter “2020.”
Do not download and print Copy A from the IRS website for submission to the IRS. The online version is not scannable, and filing it may result in penalties. Instead, order official scannable Copy A forms from the IRS or file electronically through the FIRE system.
Completing Acquirer Information
Enter the acquirer’s taxpayer identification number and complete name in the designated fields. If the acquirer’s contact information differs from the acquirer’s mailing address, provide separate contact details, including the contact name, street address, city, state, country, ZIP code, and telephone number. This information appears on Copy D and ensures direct access to someone who can answer questions about the form.
Payment Recipient Information
Enter the payment recipient’s taxpayer identification number in full on Copy A filed with the IRS. This may be a Social Security Number, Individual Taxpayer Identification Number, Adoption Taxpayer Identification Number, or Employer Identification Number. Copy B furnished to the recipient may display only the last four digits of the TIN to comply with privacy requirements outlined in the 2020 General Instructions for Certain Information Returns.
Include the payment recipient’s complete name and mailing address, ensuring accuracy to avoid processing delays or penalties.
Policy and Transaction Details
Report the policy number assigned by the life insurance company issuer. This field is required for 2020 transactions and must match the contract identification used by the issuing company.
Enter the Box 1 amount showing dollars and cents as the total payment made to the payment recipient in the reportable policy sale. For 2020, no adjustment or exclusion applies at the acquirer reporting stage. The full amount paid must be reported.
Enter the Box 2 date of sale using MM/DD/YYYY format. The 2020 instructions require this date to reflect the actual closing or transfer date of the reportable policy sale.
Issuer Identification
Identify the issuer name, which is the life insurance company bearing risk on the policy. For 2020, the company responsible for administering the contract and paying death benefits must be identified. The issuer is the entity that handles premium collection and contract administration on the date Form 1099-LS is required to be furnished.
Filing Copies with the IRS
File Copy A with Form 1096 transmittal to the appropriate IRS Service Center by February 28, 2021, for paper filing. If filing electronically via the FIRE system, the deadline extends to March 31, 2021. The FIRE system requires software that generates files according to specifications in Publication 1220. The IRS does not provide a fill-in form option for Copy A electronic submission.
Furnishing Statements to Recipients
Furnish Copy B to the payment recipient by February 15, 2021. This copy contains crucial tax details and notifies the recipient that the IRS will receive the information.
Furnish Copy C to the issuer by January 15, 2021, at the latest, observing the special timing rules based on the sale date and applicable state law rescission periods. The issuer receives this copy because they have an information reporting obligation under Section 6050Y to file Form 1099-SB. Copy C notes that only the payment recipient is required to report this information on a tax return, and the Box 1 amount is optional on the issuer’s copy.
Corrections and Void Returns
Mark the CORRECTED checkbox on all copies if resubmitting to correct previously filed information. The CORRECTED checkbox appears on Copies A, B, C, and D. Corrected forms must be filed with the IRS and furnished to all parties who received the original form.
Mark the VOID checkbox on Copy A and Copy D only when voiding a previously filed return. The 2020 instructions prohibit filing a voided Copy A with the IRS unless a corrected version replaces it. Do not file void returns as standalone submissions.
If a reportable policy sale is rescinded, file a corrected Form 1099-LS within 15 calendar days of receiving notice of the rescission. Furnish corrected statements to the payment recipient and issuer within the same 15-day timeframe.
Important 2020 Reporting Requirements
Box 1 Reporting Standards
For the 2020 tax year, Box 1 reporting includes the full amount paid to the payment recipient with no exclusions, deferrals, or temporary adjustments. There are no Section 1031 exchange deferrals, COVID-19 relief adjustments, or other modifications that reduce the reportable amount. The acquirer must report the complete payment made in the reportable policy sale.
Privacy and TIN Protection
Payment recipient TIN masking is enforced for 2020 to comply with Privacy Act notice requirements. The full TIN must be reported to the IRS on Copy A; however, Copy B, furnished to the payment recipient, may show only the last four digits.
This applies to all types of taxpayer identification numbers, including SSNs, ITINs, ATINs, and EINs. The acquirer’s TIN may never be truncated on any form copy.
Official Form Requirements
The December 2019 revision represents a continuous-use format, meaning both the form and instructions will be updated as needed rather than annually. Always verify you are using the most recent version by checking IRS.gov/Form1099LS for any updates or changes.
Copy A submission requires official IRS-scannable forms when filed on paper. Website-printed copies are not scannable and may incur penalty risk if filed with the IRS. Electronic filing through the FIRE system offers an alternative that eliminates the need for scannable forms.
Reference Materials and Compliance
Consult the General Instructions for Certain Information Returns (2020 version) and Form 1099-LS Instructions (December 2019 revision) for comprehensive guidance on penalties, filing extensions, recordkeeping rules, and other requirements applicable to 2020 calendar year reportable sales. These resources provide detailed information about backup withholding, nominee reporting, and special situations that may affect your filing obligations.
For questions about reporting on Form 1099-LS, contact the Information Reporting Customer Service site toll-free at 866-455-7438 or 304-263-8700. Persons with hearing or speech disabilities can access TTY/TDD equipment by calling 304-579-4827.
Key Takeaways for 2020 Compliance
Remember that Form 1099-LS serves a dual purpose: it alerts the IRS to reportable policy sales and documents the amount received by the seller. The acquirer bears responsibility for accurately and timely filing and furnishing all required copies. Different deadlines apply to different recipients, with issuers receiving expedited notification to allow them time to complete their Form 1099-SB reporting obligations.
Electronic filing offers extended deadlines and eliminates concerns about scannable forms, making it an attractive option for many filers. However, regardless of filing method, accuracy in reporting taxpayer identification numbers, payment amounts, and transaction dates remains critical to compliance and penalty avoidance.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
