“but I don't know what to do with the 1099's and 1096? Do I include these forms with the return and send them all together or do it separately?”----->As long as your trade or business has issued a 1099-MISC or any 1098, 1099, 5498 or W2-G to anyone, you have to send the IRS the Form 1099MISC and Form 1096 summary. The IRS has been known to fine $50 per 1099-Misc ommission, and a further $50 per month delay in the filing. Howerver, the IRS hardly imposes penalties to minor errors. So, you need to file the 1099-Misc along with a Form 1096 as soon as possible. Penalties for failing to file Form 1099 MISC were sharply increased as of 2011. If you file late, correct returns within 30 days of the due date, your penalty is $30 per return, increased from $15. The maximum penalty is $250,000. The penalty increases to $60 per return if you file more than 30 days late, but prior to August 1. The maximum penalty is $500,000. The maximum penalty for failure to file outright is $1.5 million. Businesses with gross receipts of $5 million or less have lower maximum penalties. If your forms are incorrect or incomplete, the IRS may assess a penalty of up to $50 per occurance, with a maximum penalty of $100,000 per year. The IRS does not typically apply the penalty to immaterial errors that do not impede the processing of these forms, however. Again, a willful disregard of legal requirements may result in a penalty of $100 per occurrence with no maximum penalty.The IRS requires that filers send form 1099 on specially printed scannable red forms.
Please visit the IRS Website for more information in detail;General Instructions for Certain Information Returns (2011)