Commercial Client OVERstates income on my 1099 substantially???

jd28619

LawnSite Member
Location
Midwest
Got a 1099 in the mail from a lady that handles a good number of the commercial accounts I do.

The figure she has on the 1099 is almost two times the actual amount of work that was done. The more I have gotten to know her over the past couple years, the more I think this might have been done on purpose to minimize her taxes.

So, what do you do in this type of situation?

She's also one of those ladies where if I ask her about it, I would have to do so tactfully and in NO WAY make her feel like I am calling her out or anything like that.

What would you do?
 

DA Quality Lawn & YS

LawnSite Fanatic
Location
Rochester, MN
Just take your non 1099 sales and subtract the amount from it. Then you don't get taxed for income you didn't make.

However, I would just send the form back and itemize the work you did and tell her to correct it. How hard is that?
 

32vld

LawnSite Gold Member
Location
Long Island, NY
Got a 1099 in the mail from a lady that handles a good number of the commercial accounts I do.

The figure she has on the 1099 is almost two times the actual amount of work that was done. The more I have gotten to know her over the past couple years, the more I think this might have been done on purpose to minimize her taxes.

So, what do you do in this type of situation?

She's also one of those ladies where if I ask her about it, I would have to do so tactfully and in NO WAY make her feel like I am calling her out or anything like that.

What would you do?
You are a business man?

You have business records?

You should be able to prove what this lady has paid you, can you?

Then just tell the lady according to your records she has only paid you half of the amount of the 1099.

So tell the lady: please send me a corrected 1099.

If lady says the 1099 is correct then tell her to send you the other half of the money she owes you.

If the lady is willing to do neither get guidance from your CPA and lawyer. Most likely you telling this lady that her refusing to take either action you have been advised to contest this 1099 with the IRS for you will not allow yourself to be taxed on income that you did recieve.

 

wz2p7j

LawnSite Member
You are a business man?

You have business records?

You should be able to prove what this lady has paid you, can you?

1) Then just tell the lady according to your records she has only paid you half of the amount of the 1099.

2) So tell the lady: please send me a corrected 1099.

3) If lady says the 1099 is correct then tell her to send you the other half of the money she owes you.

If the lady is willing to do neither get guidance from your CPA and lawyer. Most likely you telling this lady that her refusing to take either action you have been advised to contest this 1099 with the IRS for you will not allow yourself to be taxed on income that you did recieve.

I'll take what's behind door number 3. LOL

Chris
 

sjessen

LawnSite Fanatic
Location
Knoxville, Tn
This is probably a stretch, but could she be skimming money by overstating expenses?

Seems like you could add up the totals from last year's invoices and compare to the number on the 1099.
 

gebby

LawnSite Senior Member
Location
COLUMBUS, OHIO
In the long, I could think of about 100 things to do or try. In the short I would make her aware of her mistake and, ask for a corrected form. If that does not work, me not being an accountant, I would then ask mine how to proceed. I'm sure they have a work around so that you would not have to pay taxes on income that you did not receive.
 

ed2hess

LawnSite Fanatic
Just to let you know that will be a mess to get straight with IRS. I had a situation where it was about $30K. The only difference was i didn't get any 1099 but the IRS sent me notice that I owed them tax money for the 10099 money. The bad part they wanted me to investigate the problem, meaning go find out why they reported it against ME and tell IRS where it should have been reported.
 

P.Services

LawnSite Fanatic
Location
Fenton Michigan
I would flip my shet if someone gave me a overstated 1099 form. I know what they are trying to do, chances are if shes doing that she has all kinds of other shady things going on so the chances of a audit are high. If she gets a audit they are going to pull you into it also to verify that she paid you that much money.
 

DA Quality Lawn & YS

LawnSite Fanatic
Location
Rochester, MN
OP don't worry about overpaying for income you didn't receive. Just subtract the 1099 amt from your non 1099 sales and you are ok. Easy.
 

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