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Why can’t I file plain paper printouts of IRS “red ink” forms? FAQ
Why can’t I file plain paper printouts of IRS “red ink” forms? FAQ

Here’s why trying to file plain black-ink copy A, 1096 and W-3 copies to federal agencies could get pretty costly.

Adams Tax Forms avatar
Written by Adams Tax Forms
Updated over a week ago

The IRS processed more than 240 million federal returns in fiscal year 2021.

To keep up with that demand, 1099 forms are processed with automated equipment that uses Optical Character Recognition (OCR) technology.

Your 1099 Copy A and 1096 forms and W-2 copy A and W-3 forms are printed with OCR red “dropout” ink. This special red ink allows scanners to drop the form template during the imaging process. This cleaner image is easier and faster to scan.

So, what happens if I throw a plain black-ink copy into the works?

The worst possible outcome is that your 1099 forms won’t scan. That means humans get involved and your forms are processed by hand.

If that sounds expensive, it should. For slowing down the workflow, the IRS may assess penalties for each 1099 form you sent that isn’t scannable.

Avoiding penalties for red ink 1099 & 1096 forms

To avoid costly delays and fines, send only pre-printed IRS-approved Copy A, 1096 and W-3 tax forms to the IRS. You can purchase authentic Adams Tax Forms online day or night at the Adams Tax Center.

As a gentle reminder, Adams Tax Forms Helper Online produces a watermark on your black-ink 1096 and W-3 pdfs and printouts.

Watermarked copies are for informational purposes and are suitable for your records. They just aren’t suitable to file to the IRS or SSA.

Is there any way to avoid buying pre-printed forms?

Yes! Since Adams Tax Forms Helper Online is an authorized eFile provider, you can e-file directly to the IRS and SSA without official IRS forms.

Add Print & Mail Assistant, and we’ll even mail perforated copies to your employees and recipients from our secure mail facility. Additional fees will apply.

Is the IRS really planning to shift to eFile?

Yes, and that process has already begun. The IRS is encouraging all employers to file forms electronically and advises that eFiling is both faster and safer than filing paper forms by mail.

Nearly 195.2 million returns and other forms were filed electronically last year. That’s 81.3% of all filings in 2021, an increase of 5.7 percent from 2019.

Large employers with more than 250 employees are already required to file electronically, and the IRS has broadcast intent to lower that threshold over the next several years.

The current proposed timetable would:

  • drop the threshold next year to 100 employees for 2023

  • drop the threshold again to 10 employees in 2024

For now, the threshold remains at 250. Stay tuned to Tax Forms Helper email updates for threshold changes as they’re announced.

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