Form 1099-LS Checklist: Tax Year 2021 Filing Guide
Purpose and Overview
Form 1099-LS reports reportable policy sales under IRC Section 6050Y for the 2021 tax year. Acquirers must report acquisitions of life insurance contracts where payment recipients receive proceeds, communicating contract identification, sale date, and payment amount to the IRS, payment recipient, and issuer.
The 2021 instructions require electronic filers to follow Publication 1220 specifications using the FIRE system. Paper filers must use official IRS scannable Copy A stock only. Website-printed versions trigger scanning penalties under IRC Section 6721.
Critical Deadlines for 2021 Tax Year
Understanding the three distinct deadlines is essential for compliance.
- Filing with IRS: February 28, 2022, for paper submissions; March 31, 2022, for electronic filing via the FIRE system
- Furnishing to Payment Recipients: February 15, 2022, for Copy B
- Furnishing to Issuers: January 18, 2022, at the latest for Copy C, subject to specific timing rules based on 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
Step-by-Step Completion Checklist
Obtain Proper Form Stock
Acquire Copy A from official IRS stock or file electronically using Publication 1220 specifications. Do not print Copy A from the IRS website. The 2021 instructions confirm that non-scannable copies are subject to penalties. To avoid scanning compliance issues, order official forms from IRS.gov/orderforms or use the FIRE system.
Complete Acquirer Information
Enter your complete taxpayer identification number (EIN or SSN) in the designated field. Verify TIN format against IRS records to avoid mismatch rejections flagged under IRC Section 6721 accuracy penalties. Provide the acquirer’s complete name and address as registered with the IRS.
If your information contact differs from the acquirer’s primary address, complete the designated section with the contact name, address, and phone number. The 2021 instructions require direct contact details so payment recipients can resolve discrepancies.
Report Payment Recipient Details
Enter the payment recipient’s complete TIN on Copy A filed with the IRS. A full TIN is mandatory for IRS submission, as per the 2021 General Instructions. Copies B and C may display only the last four digits for privacy, but Copy A must contain the full identifier.
Include the payment recipient’s full legal name and complete mailing address with accuracy to avoid processing delays and penalties.
Enter Transaction Amount
Complete Box 1 with the gross amount paid to the payment recipient in the reportable policy sale. Do not net against basis or other offsets. The 2021 instructions specify gross consideration without reduction. Report the total amount paid regardless of the recipient’s tax treatment or cost recovery.
Document Sale Date
Record the sale date in Box 2 using the MM/DD/YYYY format. The 2021 guidance requires the exact date of closing or transfer, not estimated or approximate dates. Accurate date reporting affects issuer furnishing deadlines and subsequent Form 1099-SB obligations.
Verify Issuer Identification
Confirm the issuer’s name matches the insurance company bearing risk on the date Form 1099-LS is required to be furnished. Update if the policy was transferred mid-year under IRC Section 6050Y(b) rules. The correct issuer is the entity responsible for contract administration when reporting obligations arise.
File with the IRS
Submit Copy A with a Form 1096 transmittal by February 28, 2022, for paper filing, or March 31, 2022, for electronic filing through the FIRE system. Electronic filing requires that files be generated according to the specifications outlined in Publication 1220. The IRS does not provide a fill-in form option for Copy A.
Furnish Copies to Recipients
Provide Copy B to the payment recipient by February 15, 2022. This serves to inform the recipient that the IRS is receiving the information for their tax reporting needs. Furnish Copy C to the issuer by January 18, 2022, at the latest, observing special timing rules for transactions near year-end. Issuers need this information to file their required Form 1099-SB. Copy C note that the Box one amount is optional on the issuer’s copy.
Key Regulatory Updates for 2021
Scanning Penalties Emphasized
The 2021 General Instructions emphasize scanning penalties under IRC Section 6721 for filers submitting non-official Copy A. Acquirers must order official forms from IRS.gov/orderforms or use FIRE's electronic filing to avoid penalty exposure. This amendment creates a heightened compliance burden for paper filers relative to electronic filers.
Form Revision Continuity
Form 1099-LS Rev. December 2019 edition continued into the 2021 tax year with no line redesign. However, 2021 instructions clarify that Copy A is scannable only when printed from official IRS stock, not website downloads.
Issuer Reporting Requirements
IRC Section 6050Y(b) issuer reporting obligation remains unchanged for 2021. Issuers must file the corresponding Form 1099-SB based on the Form 1099-LS data received from acquirers. This explains the accelerated January 18 deadline for furnishing Copy C to issuers.
No COVID-19 Extensions
The 2021 instructions do not extend COVID-19 filing extensions. Standard deadlines apply under the normal General Instructions framework without pandemic relief carryover. Acquirers must meet regular due dates without automatic extensions.
Compliance Best Practices
TIN Verification
Verify TIN accuracy against IRS records before submission to avoid mismatch rejections. Use the IRS TIN Matching program when available to validate taxpayer identification numbers. The filer’s name and TIN must match Form 945 records to avoid information return penalties.
Electronic Filing Benefits
Consider filing electronically through the FIRE system to take advantage of the extended March 31 deadline and address concerns related to immediate scanning. Electronic submission requires adherence to Publication 1220 specifications, but it removes the penalty risk associated with non-scannable forms.
Documentation and Recordkeeping
Maintain thorough documentation of all reportable policy sales. Create a deadline calendar noting January 18 for issuers, February 15 for payment recipients, and February 28 or March 31 for IRS filing. Build buffer time to accommodate corrections before deadlines expire.
Double-check that the reported amounts represent the gross consideration without any reduction. Confirm that sale dates accurately reflect the actual transaction dates. Review issuer names to ensure correct risk-bearing entity identification.
Continuous Use Format
Form 1099-LS operates in a continuous-use format with updates as needed, rather than undergoing annual revisions. Always verify the most current version at IRS.gov/Form1099LS for updates, clarifications, or changes issued after the initial publication of the 2021 instructions.
Quick Reference Summary
- Form Version: Rev. December 2019 (continuous use through 2021)
- IRS Filing: February 28, 2022 (paper) or March 31, 2022 (electronic via FIRE)
- Payment Recipients: February 15, 2022
- Issuers: January 18, 2022 (subject to transaction-specific timing rules)
- Copy A Source: Official IRS stock or electronic filing only; website downloads prohibited
- Box 1 Reporting: Gross consideration without reduction
- Box 2 Format: MM/DD/YYYY exact date required
- TIN Requirements: Full TIN on Copy A; last four digits permissible on Copies B and C
- Electronic System: FIRE only (not AIR system)
- Extensions: No automatic COVID-19 relief for 2021
Keep copies of all submitted forms and supporting documentation for compliance verification and potential amended return preparation.
Need Help With Your Tax Filing?
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
We offer:
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Call now before filing: (888) 260-9441
Fast transcript pull available
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.
