Wolters Kluwer Financial Services Helps Securities Firms Alleviate Tax Season Burdens Related to IRS Forms 8937 and 1099-B

Waltham, MA - 5 February 2013

As U.S. securities firms face the looming Feb. 15 deadline to provide their clients with IRS Form 1099-Bs, which summarize stock transactions for tax reporting purposes, Wolters Kluwer Financial Services is helping them work through one challenge they might have underestimated.

Under the cost basis reporting law, companies engaging in a corporate action that has a quantitative effect on basis, such as a stock split or merger, must report the event to the IRS in an issuer statement via IRS Form 8937. Brokers must take into account information provided in these issuer statements when they compute cost basis reported to investors on Form 1099-B.

By the end of 2012, nearly 2,000 Form 8937s had been made publicly available, representing approximately 30,000 individual reportable events. Each event must be properly accounted for by brokers as they report cost basis on the 2012 Form 1099-Bs provided to investors.

“Brokers can easily be overwhelmed by the number of issuer statements, not to mention the time it takes to locate each statement, interpret the information and process the data so that basis is accurately reflected on clients’ 1099-Bs,” said Stevie Conlon, senior director and tax counsel, Wolters Kluwer Financial Services.

Wolters Kluwer Financial Services is helping securities firms tackle these challenges with its CISR™ 8937 Capital Changes Issuer Statement Reporting Service, which provides one source for all publicly available IRS Form 8937 issuer statements along with expert analysis. Centralizing coverage of issuer statements, providing fielded corporate actions, security and taxability details, and linking to original Form 8937s, CISR™ 8937 saves time and reduces resource burdens.

Additionally, the company has published a new whitepaper, “Cost Basis Reporting Law Compliance Complexities: Do you have the IRS Form 8937 Issuer Statement Details Covered for 2012 Tax Reporting?,” to help firms assess their practices.

“Our goal is to help securities firms ensure they are equipped to monitor, track and interpret taxability details from Form 8937s, which not only helps them provide clients with accurate 1099-Bs, but also allows firms to avail themselves of the penalty relief provisions in the cost basis reporting regulations,” said Chuck Ross, vice president and general manager for Investment Compliance Solutions at Wolters Kluwer Financial Services.

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