Need End-of-Year Financial Report to Reconcile 1099-K

Number:rdar://16041842 Date Originated:Feb 11, 2014
Status:Open Resolved:
Product:iTunes Connect Product Version:
Classification: Reproducible:
As of 2013, Apple files with the Internal Revenue Service a 1099-K for each "Apple entity that acts as an agent or commissionaire for U.S. App developers... who meet the following thresholds in a calendar year: More than $20,000 in unadjusted gross sales, and more than 200 transactions." (from the iTunesConnect Banking and Tax FAQ) The figures reported in the 1099-K are based not on the payments received by a developer, but rather on the developer's "unadjusted gross sales" which the iTunesConnect Banking and Tax FAQ explains is "the total amount of your sales, unadjusted for Appleā€™s commissions, fees, refunds, and other adjustments."

The problem is that although developers can view their financial reports and take into account refunds and Apple's 30% commission, there is no information provided to account for the fees and "other adjustments" that make up part of the reported unadjusted gross sales. Further, even if this information was available, it would still be cumbersome to use it to reconcile the 1099-K to received payments, since the financial records are based on fiscal months and years, while the 1099-K is based on calendar months and years.

Steps to Reproduce:
1. Attempt to reconcile a 1099-K with financial records provided by Apple.

Expected Results:
At the end of each calendar year, Apple should provide an end-of-year financial report for each "Apple entity that acts as an agent or commissionaire" summarizing on both a monthly and annual basis a developer's unadjusted gross sales as well as any and all commissions, refunds, fees and other adjustments which were made to those sales figures before payment was made by Apple to the developer. Such a report would make it much easier for a developer to reconcile a 1099-K to the payments which were actually received from Apple.

Actual Results:
Confusion about how a 1099-K relates to payments received from Apple.


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