dvrbase-google[at]yahoo.com wrote in news:115lt6i1u18d9d3

- quote -

A number of years ago I sent out 1099-MISC's for a
then-client of mine. Included was a 1099-MISC to the bozo
they'd had doing their accounting and bookkeeping for years
(you can make correct assumptions on the quality of his work
by the work I chose to describe him). They got a letter
from the IRS saying the name and listed SSN didn't match. I
double-checked the records, and it was indeed the one he had
given and had (theoretically) been using. I sent a letter
back to the IRS saying, in effect, you've got all the
information we have and we can't find the guy now.

The ball was at that point in the IRS' court. I hope they
chased him down... it took me almost a year to get those
poor folks straightened up from the mess the guy left
behind.

Point of this is, you issue based on what you have. When/if
it's questioned, tell the IRS you've provided all
information in your possession. It's not like you can pull
missing info out of thin air if your contractor has
disappeared. I suppose you could also send a letter in with
the 1099 summary, but I don't know if it would get to the
right place. Probably couldn't hurt.

Catherine

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No. There is no SSN / EIN # on the form.

Can the IRS track this person down? Will they?

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If you don't have an independent contractor's SSN or EIN,
and the total amount paid to the contractor is $600 or more,
you are required to withhold 28% of each payment to the
contractor and turn that amount over to the IRS. See Code
section 3406.

If the IRS decides to pursue this, both your business and
you personally could be liable for the amount of the tax
that should have been withheld. You may be able to get some
relief from the penalty if you can show that the contractor
reported the income on her tax return.

You could also be liable for filing an incomplete 1099 with
the IRS, unless you followed the IRS rules for attempting to
obtain the SSN. The penalty is $50 per 1099, but could be
raised to 10% of the total amount reported on the 1099 if
the IRS determines that the violation was intentional. Code
section 6721.

You might consider trying to get the contractor to sign a
W-9 form and then filing a corrected 1099 and sending the
corrected 1099 to the contractor. If you do this, the IRS
could still impose penalties for filing a late 1099, but
they should be reduced to $30 if you make the correction
before August 1. Code section 6721(b).

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dvrbase-goo...[at]yahoo.com wrote:

- quote -

If the person sent out a form 1099-MISC they would have to
have a social security # or an EIN.

Missy Doyle

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We are a small (< 15 employees) technology start-up in
California that used consultants last year to assist us.

It turns out that for one consultant who served us for 3
months, she either never provided us or we lost her SSN and
/ or W-9 form. We have no record of this person working for
us except the signed agreement, 3 paychecks (without our
witholding any taxes), and email/document trails.

The person responsible for handling paychecks and taxes (who
is also a contractor!) sent out a 1099-MISC to this person's
address and filed all the standard forms with the govt/IRS.
Thus far we haven't heard from either.

My questions, on the assumption that this one contractor is
not going to report any income received, are:

* Granted that we seem to have screwed up, what additional
steps should we have taken to make sure the IRS doesn't come
after us to prove that we did indeed contract this person?

* Also, what do people think is the likelihood that this
consultant will not report any income received to the IRS?
It's almost as if our mishandling has provided her with free
$$$ at a cost to us...

Thanks in advance for your responses.

Dennis

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