Somebody please explain to me how it can possibly make sense that the Bank of New York is not required to send me
1099-OID's for Israel Bonds for which the OID amount is under $10, but I'm still required to report these OID amounts on my taxes.Presumably, the point of not requiring institutions to send
1099's for amounts under $10 is allowing those institutions to save the expense of printing and sending out the forms.However, if people who would otherwise have received those forms still have to report the income, and the only way for them to find out how much to report is to contact the bank on the phone or in writing, then surely the expense to the bank of employing enough staff to respond in a timely fashion to those thousands and thousands of inquiries far exceeds what it would have cost them to just send out the 1099-OID's in the first place.
Unless, of course, the vast majority of people in this situation aren't actually contacting the bank and therefore aren't actually reporting the income to the IRS.
(Please note: I'm not talking about 1099-INT's, where I can figure out how much the bank paid me by looking at my bank statements and/or the interest payments recorded in GnuCash. Rather, I am talking about 1099-OID's, for which the values each year are calculated using some magical formula unknown to mere mortals like myself.)
Does everybody (the banks, the IRS, etc.) just tacitly acknowledge and live with the fact that these amounts aren't actually being reported by most people, and therefore taxes aren't being paid on them?
Am I a sucker for reporting and paying taxes on these amounts?
(Oh, and while we're at it, why did the Bank of New York agent to whom I just spoke on the phone tell me that since the bank didn't report these amounts to the IRS, I'm not required to report them on my taxes? That's just wrong, isn't it?)