CUNA Comment Letter
Form 1099-OID, Original Issue Discount; OMB Number: 1545-0117
January 17, 2007
Re: Form 1099-OID, Original Issue Discount; OMB Number: 1545-0117
Dear Ms. Johnson:
The Credit Union National Association (CUNA) appreciates the opportunity to comment on the continuing information collections concerning Form 1099-OID, Original Issue Discount. CUNA represents approximately 90 percent of our nations 8,700 federal and state-chartered credit unions, which serve nearly 87 million members.
We appreciate the Treasurys continuing effort to reduce paperwork and evaluate the necessity of information collection by reviewing form 1099-OID. Form 1099-OID is submitted for each owner of a time deposit, savings plan or certificate of deposit (CD) with an original issue discount of at least $10 and a term of more than one year. Form 1099-OID is also used to report income from certain deposit arrangements such as time deposits or bonus savings plans of more than one year.
We believe additional guidance is needed to determine when a financial institution is required to complete this form. Instructions state that both taxable interest and the OID may be reported on Form 1099-OID. However, it is unclear when a credit union must file Form 1099-OID in lieu of 1099-INT.
Additionally, we believe additional instructions specific to financial institutions on completing the form will be helpful for credit unions and other financial institutions.
Alternatively, because credit unions typically pay interest income on accounts as it is earned and report the income on Form 1099-INT, we believe the requirement to file Form 1099-OID is redundant and financial institutions should be given an exemption from this form.
Thank you for the opportunity to comment on this request to continue information collection on OID. If you have any questions or comments, please feel free to contact me at 202-508-6733.