Donegal Insurance Group
Faced with increasing 1099 form volume due to growth, Donegal Insurance Group turned to TIN matching capabilities in the Sovos Tax Information Reporting solution to save time and ensure accuracy.
Founded in 1889, Donegal Insurance Group is a publicly traded entity consisting of a group of companies that provide full lines of personal, farm and commercial insurance products across multiple regions of the United States. Based in Marietta, Penn., the company has grown rapidly through acquisitions and reported revenues of nearly $740 million in fiscal 2017.
Filing 1099 forms is “a huge endeavor” for Donegal, says vice president and assistant treasurer Karen Groff. The company now sends about 17,500 forms a year, most of them forms 1099-MISC, many of which had accelerated deadlines for tax year 2017. The number of forms has increased in recent years as Donegal has grown. Prior to using Sovos TIR, Donegal had to submit huge electronic files to the IRS for name-TIN validation and then wait for the agency to respond. The process was slow and time-consuming, which was a problem given that company resources are already taxed for other reasons during reporting season.
Sovos TIR provides real-time TIN matching, enabling Groff and her staff to verify name-TIN combinations in real time at any time rather than sending files in bulk to the IRS during or just before reporting season. The Sovos system enables Donegal to automate the matching of name-TIN information for account holders and facilitates the process of sending 1099 forms to the IRS.
“At the end of the tax season, you simply click a button in Sovos TIR, and the IRS electronic filing is done. We no longer have to worry about getting onto the IRS site.” -- Karen Groff, vice president and assistant treasurer, Donegal Insurance Group
Donegal was a Sovos customer when Groff took over 1099 reporting four years ago. Donegal upgraded to a version of Sovos TIR with TIN matching shortly after her arrival. The company prints forms internally to send to payees, but Sovos provides ease of use and fast processing speed for reporting 1099 forms to the IRS.
With Sovos TIR, Groff can focus on other activities during reporting season in January and February, including producing nine companies’ Property and Casualty Annual Statements for the industry’s governing body, the National Association of Insurance Commissioners. Groff says uploading information, doing TIN matching and getting forms ready to print takes about a week, a significant time savings. And in the more than 17,000 forms Donegal filed last year, there were only about 10 TIN-name mismatches.
● Donegal Insurance Group faced rising numbers of 1099-MISC forms as the company grew.
● The company needed to reduce time spent on 1099 reporting and ensure accuracy of information.
● Sovos TIR offered real-time TIN matching, eliminating the need to send huge files to the IRS and wait for a response.
● Sovos facilitates the process of sending 1099 forms to the IRS.
● Donegal accounting staff can focus on other business-critical projects on deadline during reporting season.
● Real-time TIN matching eliminates errors and saves time in the reporting process.