Who do I write to about an inaccurate 1099 form?

Question

I am an independant contractor who did not get paid for work completed. The contractee lied about earnigns made.

Answer 1

Does the 1099 state more, or less, than you actually got paid? Do you have any kind of proof that your reported earnings are correct and the 1099 isn't? You will be asked for that. If the contractee refuses to correct the 1099, notify them that you will be challenging it and file your return. Expect to be audited, so have your proof ready.

Answer 2

Are you sure he lied, or are you using different numbers to calculate income? Remember, the 1099-MISC is going to represent the checks he wrote to you during 2006. If he wrote you a check on 12/29/06, but you didn't receive it until 1/07/07, the contractor would still be including that on his 1099-MISC.

If you're not sure how the number was calculated, contact the company and ask for a detailed breakdown of how the 1099-MISC was calculated. If it still doesn't come up correctly, then you have some options. Obviously, you need to report the correct amount of receipts on your tax return. If your number is correct, even if the contractee won't correct his 1099, you should use the correct receipt amount. Just as a warning, though, the IRS does have a matching program. If the amount of his 1099 is greater than the total amount of receipts you show on your Schedule C, chances are you'll be getting a notice from the IRS asking why you're not reporting all of your income. If you have dealt with multiple customers (not all of which have probably sent you 1099s, chances are), as long as you are reporting more receipts than what's on that 1099, the IRS won't notice a discrepancy unless you're audited. The key thing is to make sure that your total receipts figure matches your bank deposits (assuming you're cash basis).

Answer 3

You have to go back to who issued the 1099. If they refuse to correct it, then you need to attach a complete explanation to your tax return, detailed with support, to show why you are not agreeing with the 1099. That will be a pain.