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Thread: 1099 Question

  1. 05-16-2008 11:38 PM #1
    Charly
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    Default 1099 Question

    A company sent me a 1099 for quarterly consulting with them lat year. 3 quarters the checks were in my name, the last quarter it ws in my corporate name (A C Corp). I called their CPA and asked them to revise the 1099. Never happened (I did an extension anyway)

    I spoke to the CPA last week, promised he corrected it on his end but didn't send me a corrected copy. When pressing him he said

    "Doesn't much matter, the government doesn't match 1099's up much unless you get audited.'

    is this true?

    Thanks
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  2. 05-16-2008 11:43 PM #2
    ZahiD
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    Charly...

    Not at all. What I would do is put the amount of the 1099 in the sales area on a Schedule C on your personal return. In the other expenses area of the Schedule C type, "Turned over to Corporation ID #----" and use the same amount. The effect on your personal taxes is "0" and a CP-2000 letter (generated by IRS under-reporters unit that checks your return against amounts reported by your payers) will not be generated.

    This is common on Doctor's returns. Many of the insurance companies make 1099s out to Doctors and they turn the money over to their practices or their hospitals. The hospitals sometimes issue letters stating that. In the old days before e-filing, I used to attach the letters to the return. I haven't had a problem, even with e-filed return without letters attached, using the above method.

    I wouldn't take a chance on a) the correction being actually done, or b) IRS processing the corrected 1099 timely.
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  3. 05-16-2008 11:49 PM #3
    boolean
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    Default

    I would think not. I know of someone who got a "letter" from the IRS telling them they had not included 1099 income on their tax return the previous year. Also, early this year I received a letter from the state (CA) informing me that they were aware that I had 1099 income that I had not filed a tax return for (sad but true, I did not file my 2006 taxes until everyone else was filing their 2007 taxes). So, at the very least, the state of CA is checking. I wouldn't believe that CPA if I was you.
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