I had a client who worked as a computer consultant for a
friend's corporation. He earned $7800. The corp sent him a
1099 form with $78,000 in income on it. They refused to
correct it. We reported the $78,000 plus the $7800 he really
earned on Sch. C. We then deducted the $78,000 as 1099
issued in error. He never heard from IRS about it. I have
used this technique in other instances.

One former client cashed checks for her friend while she was
visiting out of state. Her friend then issued a 1099 for the
amount of the checks. We listed the 1099 amount on the tax
return and deducted the cash provided with a note. Again no
question by the IRS. I don't know what happened to the
friend.

Linda Dorfmont E.A., CFP, CSA

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David Woods, EA, ChFC, CLU <dwoods[at]woods-financial.com> wrote:
- quote -

Sure; the two sentences were in contradiction,
so I questioned it.

Seth

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xxx[at]lighting- research.com says...

- quote -

Report the amount(s) from the Form(s) 1099 and subtract out
any amount not received.

Gary

--
E-mail to the above address is rarely read. If you want to
contact me directly, please send an e-mail to: gary at
gdgoodman dot com.

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"Seth Breidbart" <sethb[at]panix.com> wrote:
- quote -

Hey it was a TYPO. I mean you did read the first sentence,
right?

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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David Woods, EA, ChFC, CLU <dwoods[at]woods-financial.com> wrote:

- quote -

But that _isn't_ the income he received. It's the income
somebody inaccurately claimed he received.

Seth

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- quote -

I'm sorry, but I'm confused by your answer.

If I received less income in any year than reported on the
1099 for that year, do I pay tax on the amount received or
the amount reported on the 1099?

--
Vic Roberts
Replace xxx with vdr in e-mail address.

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"J. Patrick Brandt" <null[at]void.net> wrote:
- quote -

You report the income you received. That you received less
than the 1099 means you pay tax on the 1099 number.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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"J. Patrick Brandt" <null[at]void.net> wrote

- quote -

You can fix that on the return if necessary, so you aren't
"stuck" with it.

--
Paul A. Thomas, CPA
Athens, Georgia

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J. Patrick Brandt" <null[at]void.net> wrote:

- quote -

I had this happen once and my accountant told me to record
the payment on the tax year received and ignore the 1099. I
guess if I got audited I might have to convince the IRS
that, based on the date of the check it could not possibly
have been received by me in the tax year indicated on the
1099.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

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"Paul" <TaxMan[at]negia.net> wrote:
- quote -

Even if you are a contractor - you may get a 1099.

If they payer wrote the check in 2004, and puts it on your
1099 for 2004, you are kind of stuck with it in 2004, even
if you didn't get the check until 2005. This doesn't sound
like the case for you, but it can happen that way,
sometimes.

[I got a check, on 1/3/05 that was dated 12/30/04 -- I do
enough business with this client that I am sure I will get a
1099, and they will be expensing that payment to me in 2004,
bet your bottom dollar.]

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Thank you all for the response and helpful advice. I didn't
receive the check from the client until today, so I will
have to claim it on my 2005 return.

Mike

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MPeter wrote:

- quote -

If you're a cash basis taxpayer, and most people are, then
it's 2005 income.

ChEAr$,
Harlan Lunsford, EA n LA
Mon, 3 Jan 2005

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Mike,

It depends on whether you are on the cash or accrual basis.
If you're a sole proprietor with a service business like
consulting and no employees... ie. pretty straightforward...
you'll probably be on a cash basis. This means income is
recognized when received, not billed. I defer to
professional accountants<g
jo

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"MPeter" <mpeter[at]nospam.yahoo.com> wrote

- quote -

Consulting is generally a cash basis activity, and as such
you will report your income when received and your expenses
when paid.

It looks like 2005 income.

You should have had some 2004 expenses. Report those on the
appropriate forms and schedules and attach a note that while
you were in an active business in 2004 and incurred expenses
in 2004, the income was not received until January
2005....or something along those lines.

A Schedule C with expenses and no income does raise some
concerns at the taxing agencies.

--
Paul A. Thomas, CPA
Athens, Georgia

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You claim the income the year you receive it. If you are
like some of us tax pros, if you do *not* receive it, you do
*not* claim it as income.

Missy Doyle

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2004 will be the first year I have to claim self-employment
income for some consulting work I'm doing after hours.

I billed the client in early December for some work that was
done, but have been told that they will not be sending me
out a check until after Jan 3rd. Do I still claim this
income on my 2004 federal return or is it now considered
2005 income? Is it based on when I receive the payment or
when I actually billed the client?

Thanks in advance.

Mike

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