In the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

, a Form 1099-OID is a tax form intended to be submitted to the Internal Revenue Service by the holder of debt instruments (such as bonds, notes, or certificates) which were discounted at purchase to report the taxable difference between the instruments' actual value and the discounted purchase price. Like other 1099 forms, it is normally filled out by a payer of income — for example, the issuer or seller of a discounted bond — and sent both to tax authorities and the recipient of the income.

Fraudulent use

1099-OID fraud consists in filing Form 1099-OID with a false

withholding Tax withholding, also known as tax retention, Pay-as-You-Go, Pay-as-You-Earn, Tax deduction at source or a ''Prélèvement à la source'', is income tax paid to the government by the payer of the income rather than by the recipient of the income. ...

information to reduce taxable income. Promoters of the fraud allege that the withheld amount exists in a secret bank account, a claim that originates from the redemption movement. The IRS has taken notice of 1099-OID fraud schemes and has successfully brought legal action against them.IR-2018-48
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References

Personal taxes in the United States IRS tax forms {{US-gov-stub