"Jim" <jpb1970[at]comcast.net> wrote

- quote -

Well, I would be looking into what paperwork you got back
then (probably in a musty box someplace). If they told you
their name and SSN (instead of Company and TIN) then you
shouldn't ahve to change anything. Also, how were the
checks actually issued? If in their name (not the companys)
then you did right to issue the 1099 to the individual.

FYI: He can fix it all on his own just by proving that the
money was deposited to his business accounts, properly
recorded in his books and properly reported on his corporate
returns, and that he picked up that profit through salary
and/or company profits on his personal returns. The IRS
knows how to fix this because it happens all too often.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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"Jim" <jpb1970[at]comcast.net> wrote:

- quote -

The W-9 he provided lists him as a sole proprietorship and
he gave us his SS#. Thanks to everyone who answered.

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- quote -

I think a really plausible resolution is that you don't have
to do anything. Let the IRS come to you, if they *really*
need to, and see what problem there might be. Your vendor
is just whining because there's something wrong in his tax
returns that he can't explain.

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"Jim" <jpb1970[at]comcast.net> wrote:

- quote -

Why does he think you can fix this? All he has to do is
show the IRS that the income was correctly reported on the
1120-S.

I doubt you got the SSN from the Psychic Hotline, so I'd
just tell him to resolve it with the IRS himself. If the
IRS wants any information from you, they'll let you know.

--
Phil Marti
Clarksburg, MD

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- quote -

First, determine if it was issued in error. Do you have a
Form W-9 from him? If so, does it have his SS # or
corporate EIN on the form? (How did you get his SS# in the
first place? I assume he must have given it to you.)

Second, do you have a written contract? Did you contract
with him individually or with his corporation? If there was
no contract, then I assume you received an invoice from him.
Was the invoice from him or his corporation?

If there was no contract or invoice, to whom was the check
made payable? Him or his corporation?

Based on your records you need to determine if you engaged
him or his corporation. If you engaged him personally,
tough on him. If you engaged his corporation, you should
file a corrected Form 1099.

You can go on the IRS's website and get prior year forms.
To correct this you would issue a 1099 to him with zero in
misc comp and check the corrected box, then issue one to his
corporation for the correct amount. Although you do not have
to issue a Form 1099-MISC to a corporation, I would do so in
this case since you are correcting a previously issued
Form-1099. You also need to file form 1096.

Hope this helps

Bert Harrison, CPA

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Jim wrote:

- quote -

Even if the 1099 was incorrect in your view, or the view of
the worker to which you only _might_ agree, 1099 entries --
original or corrected -- don't change the underlying facts
as to whether the contract was with an individual or a
corporation. Which was it? Written or oral? If an
arrangement with a known corporation, did it provide that
this individual alone would provide the services? What did
the guy put on Form W-9, if he gave you a W-9? How did he
invoice it if he did so?

If unclear as to the substance of the contract, you don't
have to, nor should not, involve yourself with someone's IRS
audit problems. If fuzzy on facts, gratuitously furnishing a
corrected 1099 showing a corporation may steer IRS
incorrectly on the facts. IOW, that burden of correctness
is now primarily upon the guy being audited. Wait for any
IRS inquiry of you, or request from the worker as to what
specific factual information to place in a letter to the
guy, which he furnishes to IRS (if it helps him). Of
course, all you should say in such letter are the
articulable facts as best you know 'em.

Fred F.

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Which number did he give on the W9?

How did you start using his SS#?

When did he incorporate?

If he gave the SS# on the W9, problem solved. You use the
number he gave you.

If he gave the EIN on the W9, you should issue a corrected
1099 for 2000. I'm sure some of the other more learned
people on here will correct me if I'm wrong, but there are
two ways to do this. One would be to issue a corrected 1099
in his SS# showing --OO-- where the amount reported formerly
was listed and the "corrected" box at the top of the form
checked and not issue a 1099 in the EIN since corporations
are not required to have them issued to them. Another way
would be to do the corrected 1099 for his SS# and then issue
one to the EIN.

Obviously, you got his SS# from somewhere. My guess is from
him. <G
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Jim <jpb1970[at]comcast.net> wrote:

- quote -

Since you issued him a 1099, I assume he gave you a W-9?

If so, leave it as is.

If he did not give you a W-9, how did you know to issue the
1099 to his SSN?

At this point, if you really really want to be a nice guy,
you give him a W-9, see what he says on it, and re-do the
1099. But he is a bit disingenious too. It is not
difficult at all for him to back that 1099 out of his
personal tax return and report it on his 1120S. His 1120S
will then give him a K-1 for his portion of the income.
Note: If he is a sole owner of his S Corp, he's just making
waves here. Maybe he thinks he can report some of the S
Corp income as dividends not earned income, but that's
probably not going to fly if he's examined.

--

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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My company issued a 1099-misc form to a vendor using his SS#
for the year 2000. He is now being audited and claiming we
issued this 1099 incorrectly. He is saying he was an S-corp
and we should have had his Fed TIN not his SS# and is
demanding we fix this with the IRS. How do we correct this
error? What are our responsibilities for this issue?

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