Handling IRS 1099-S in Oracle Fusion Payables

 

A blog that states the workaround around implementing 1099-s in Oracle Fusion Accounts Payable

Background and Problem Statement

Oracle Fusion Payables delivers standard support for IRS Forms 1099-MISC and 1099-NEC. However, IRS Form 1099-S (Proceeds From Real Estate Transactions) is not provided out of the box.

This gap impacts organizations that sell real property, work with escrow agents, attorneys, or settlement companies, or process closing-related payments that require IRS 1099-S reporting.

The requirement for the 1099-S often surfaces during year-end reporting or audit reviews, requiring organizations to design an alternative, compliant approach. However, the Accounts Payables need to ensure that the ready is prepared throughout the year complaint to support the custom solution or provide data to third party vendor for filing 1099-S.

Why Standard Payables 1099 Functionality Does Not Apply to 1099-s

Form 1099-S has fundamentally different reporting requirements compared to Payables supported 1099 forms.

It reports gross proceeds rather than income and requires property-specific details such as address and closing date.

Our goal in this blog is to leverage Oracle Fusion delivered 1099 feature as much as possible to come up with a workaround to support 1099-S reporting requirement.

Commonly Adopted Implementation Approach

·         Most organizations address this gap by treating Oracle Fusion as the system of record and handling reporting and filing outside of Oracle with help of third-party vendors like SOVOS, ADP or Vertex etc.

·         Standard Payables invoices are used, supplemental data is captured through configuration, and reporting is performed through custom reporting solution.

Supplier and Invoice Configuration

Since we can add new Income Tax Type or edit existing Income Tax Type so you can work with your client to come up with an Income Tax Type that is not applicable for your client to be repurposed as “1009-S”. One of the example is GOV7 which is income tax type used to classify agricultural payments and may not be applicable to Higher education or utilities industries clients.

Create Invoice header DFFs to capture required 1099-S attributes, including property address, closing date, gross proceeds, and internal reference numbers.

Capturing this information directly on the invoice ensures traceability and avoids parallel spreadsheet tracking.

Custom report or extract

·         Create custom report to extract the 1099-S data based on income tax type GOV7 and send it to third party vendor for filing.

·         Alternatively, one option is to copy the seeded “U.S. 1099-G Data Model” and “U.S. 1099-G Electronic Media Data Model” from Financials->Payables->Income Tax and Withholding->Data Models into Custom->Financial->Payables->Income Tax and Withholding->Data Models folder.

At the end of this section, you will find the link for the sample data model and rtf template.

·         Copy the existing scheduled process by navigating to setup and maintenance and search for setup task “Manage Enterprise Scheduler Job Definitions and Job Sets for Financial, Supply Chain Management, and Related Applications”

 

 

·         Search for the job US 1099-G Report and click on duplicate.

 

 

·         Provide the name for the custom job and make sure the report id points to the customer report mapped to custom layout in BI Publisher. You can copy the US 1099-G report from standard folder to custom folder and change the template to match the layout to 1099-S.

 

 

·         Below is the screenshot of the sample template and the link for rtf that matches the xml output from the data model US 1099-G Report and the e-text output for electronic media.

 

Link for sample data model, query and RTF layout: https://github.com/sohailakht-wq/1099-S-Data-Model-and-Query.git

Conclusion

Handling 1099-S in Oracle Fusion Payables is a design and reporting decision rather than a configuration shortcoming.

By capturing the right data, implementing clear controls, and reporting using either a tested custom reporting solution or externally using third party vendors, organizations can meet compliance requirements.

This approach has proven effective across higher education and public sector implementations.

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