The Internal Revenue Service could be doing more to encourage businesses to report miscellaneous income payments on 1099-MISC forms, according to a new report.

While businesses reported about $6 trillion worth of such payments in 2006, the Government Accountability Office estimates that even a small share of payers that fail to submit the 1099-MISCs could result in billions of dollars in unreported payments on the payees’ tax returns. Data from the IRS suggests that payees are more likely to report such income on their tax returns if the IRS receives the payers’ information returns.

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