Seth Breidbart wrote:

(snipped.

- quote -

I'm inclined to say there's nothing to prohibit it; just
that one is not required.

Besides, I see it frequently.

ChEAr$,
Harlan

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

- quote -

It appears that he's being audited and wants to make income
disappear.

It also appears that you want to be rude to him, but protect
yourself legally.

What about re-issuing the 1099 as a correction, showing $0
to him, and another one showing the payment to his
corporation?

Then send a letter to the IRS explaining exactly what
happened and what you've done. I'm sure they're quite
capable of handling it properly.

(You're _allowed_ to issue a 1099 to a corporation, right?)

Seth

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"clj1219[at]bellsouth.net" <clj1219[at]aol.com> wrote:

- quote -

We don't have any record of him providing us with a new W-9
when he incorporated but it is possible he may have sent one
and it never got to the correct department. Isn't it up to
him to prove he sent it to us?

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Taxbert <Taxbert[at]hotmail.com> wrote:

- quote -

I would not threaten legal action.

Rather, I'd have the attorney write a letter stating that
since _he_ threatened legal action, all further
correspondence is to be with the attorney only. Then the
only thing you ever say to him is "Tell my attorney."

Seth

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Jim wrote:

- quote -

You are by far on firm ground the way you reported
everything back then and your subsequent actions. When he
incorporated he should have officially notified you along
with a brand new W9 form or some type of substitute. if he
can't prove he did this, then the "arrogant jerk" has no
case, least of all for a law suit. When he got the 1099 he
should have noticed at that time and sought any corrections
in a timely manner.

ChEAr$,
Harlan Lunsford, EA n LA

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clj1219[at]bellsouth.net wrote:
- quote -

Just to clarify one point here, people have the impression
that if the payments are made to a corporation no W9 need be
filled out and submitted. Not true. The payor still needs
the W9 on file to cover himself for not having submitted the
1099-misc at year's end. And of course there is the issue
of certifying the one is not subject to backup withholding.
Hmmm, I wonder now.

Also remember that when no W9 form is filled out, all
payments, whether to individual or corporation, are subject
to withholding.

ChEAr$,
Harlan Lunsford, EA n LA

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Just a question/thought here: Is it possible what he really
wants is for you to

i) issue a corrected 1099 howing zero income to his sole
proprietorship, and

ii) since he wants the income attributed to his Corp, and
corps do not get 1099s, to not have any reissued 1099?

Obviously he knows not what he is doing, but I can't figure
out just what advantage there is in issuing a 1099 to his
corp?

And he should read up on Backing Out income.

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

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Jim wrote:

- quote -

Under federal law, there is action available under =A77434
if a taxpayer can show someone willfully filed a fraudulent
information return--note that's a fairly high bar to clear,
since they must show both willfulness and fraud, neither
being easy burdens to carry.

As well, under =A77434(c)(2) the action must be brought
within one year from the date that someone exercising
reasonable care would have discovered the erroneous
reporting. If he got this "fraudulent" 1099 by the due date
for 1099s being provided, it seems he would have a real
problem with this provision as well.

Does he possibly have a case? Well, it would depend on the
facts, but it seems he'd have an uphill fight to prevail.
That said, if he merely brings the case you likely will end
up being out a lot more than it would cost to amend the
1099, so you would have to decide if he really would do it.

As well, he could also try to bring an action in state court
if he decides (as he rationally probably should) that the
federal option doesn't look too good <grin> .

--
Ed Zollars, CPA
Podcast at http://ezollars.libsyn.com

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

- quote -

First - The guy's a jerk and full of crap and you are not
required to do anything in this situation. You issued a
valid Form 1099 based on the Form W-9 you had. If it was
incorrect he should have told you so in 2001. The problems
he is having with the IRS are his problems, not yours. You
CANNOT get in trouble with the IRS based on what you have
told us so far.

What is probably going on is that he kept poor (or no)
records of his business. For the IRS to be auditing him now
he either did not file a return for 2000 or he filed late
(I'll bet he didn't file). Because he kept poor records the
IRS is trying to put this income on a Schedule C. He wants
it in his corporation. If he kept good records he would be
able to prove to the IRS that the income belonged to the
Corporation.

Second - He cannot get the IRS to "audit the crap out of
you" any more than you can get the IRS to audit the crap out
of someone else. He can make false accusations to the IRS
about you, but the IRS agent who is auditing him probably
knows he's a jerk anyway.

Third - What would/could he sue you for? If you prepared all
forms in good faith, you are OK.

Here is a gutsy move. Say you will gladly talk to the IRS
agent that is auditing him about this situation (it is
called a third party contact which is usually initiated by
the IRS). I'll bet he will decline. Or, if you know or can
find out the IRS agent's name who is auditing him, send the
agent a letter (without the jerk's knowledge) spelling out
the facts based on your records. (i.e. Dear IRS Agent,
"Jerk" has contacted you wanting to reissue the Form 1099.
Based on your records the Form 1099 was issued correctly.
Also "Jerk" has threatened to have you audited and to sue
you if you do not change the Form 1099. Just state the
facts but include the threats.)

FYI - Keep all documentation of contact with him just in
case he is stupid enough to sue you or makes false
accusations to the IRS about you. If you spoke with him
over the phone write a memo summarizing the phone
conversation (and the threats) for your files. For the most
part, he is just blowing smoke.

I would cease all contact with him. If you have an attorney
(or a friend that is an attorney) I would have them send a
letter to this jerk saying that based on your records the
forms were filed correctly. Further, he has threatened you
and your company, and any other threats will result in legal
action on your part. You can also BCC the IRS on this
letter. To do this you would address the IRS's copy to IRS
address where he would file his individual return. On the
IRS's copy of the letter put "Attention: Individual Income
Tax Audit of "The Jerk" SS#, his address, Tax Year 2000. If
you really want to piss him off let him know that you copied
the IRS on the letter.

Bottom line - there is nothing you did wrong, so there is
nothing you can get in trouble for.

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Jim wrote:

- quote -


If he was "initially" a sole proprietor at the time he did
the work and that is how he reported his ID number to you,
that is how you should file.

This appears to be HIS problem and not yours.

He should have just reported on his tax return that the
income was paid out to his corporation from him.

Save the letter (or whatever form of communication) he wrote
to you and let him sue you or inform the IRS. <G
Since obviously you obtained his SS# from somewhere,
presumably him, for the portion that he did as a sole
proprietor, I wouldn't correct it. You did as you were
supposed to do--use the information he supplied to complete
the information return 1099-Misc. However, if you paid him
after the time he was incorporated and he did inform you of
a different number for that time period, you should provide
a corrected 1099. Do you have a W9 with the EIN and
corporate name?

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

- quote -

"this guy is basically an arrogant jerk"

What an understatement! Threatening somone from whom you
need favor is an extreme suboptimal strategy.

It really gets worse cause if this "arrogant jerk" had
representation, the W-9 income would just be shifted to the
S-Corp. So he's going it alone to save a few francs and is
clueless as to how to handle the situation.

My policy is if someone tells me do this or else, I take the
or else - with exceptions for law enforcement officers and
federal agents.

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I posted back on 5-24-06 about a vendor that is being
audited and is claiming my company issued a 1099 for the
year 2000 under his SS# instead of his corporation's fed ID.
I informed him that the W-9 he provided indicated he was a
sole proprietorship and he gave us his SS# so we do not need
to issue a corrected 1099. Here is the response I got:

"Yes your company was in a rush for me to take over installs
so initially i was a sole p. However; that lasted all of two
weeks before the articles of inc. were filed and my corp.
attorney and myself notified your company of the change as
stated by law. Again your company was aware of my intentions
and actions from the very begining. It is not my problem
that you have turned over so many employees since 2000 that
you cant locate the correct W9. If you do not send a
corrected 1099 I will sue your company and give the IRS a
nice reason to audit the crap out of you. Are we clear?"

I have come to understand that it is basically at my
discretion whether or not to issue a corrected 1099. I am
inclined not to do it because this guy is basically an
arrogant jerk who we haven't done business with in years.
Does he have any legal ground to sue or is he just blowing
smoke? Shouldn't he have to prove he provided us with a
different W-9 back in 2000? He never reported to us in 2001
that the 1099-misc we issued for 2000 was using an incorrect
TIN. Even if he did doesn't the IRS state that we are only
required to report under the new TIN going forward, and
issuing a corrected 1099 is at our discretion?

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