What would you do? I did work and the company stopped payment on check because...?

Question

I was cleaning some old files and found an 8 month old check from a company I did some work for as an independent contractor. The check did not have a "cash by" date on it, so I deposited it into my bank.

The check did not clear, payment was stopped. The reason why it was not immediately cashed (not that it matters) was because I was very ill for the 2 1/2 months after that check was issued, and I simply forgot about it. The company knew I was very ill, but instead of calling me about it, they stopped payment.

I have emailed them to issue another check, but got no response. I looked at my 1099 form, and they declared this as money paid to me, which means I must pay taxes on it. The taxes will be several hundred dollars.

My email was very professional and nice, but now I'm PO'ed. Am I wrong, or am I entitled to this money? What should I say in the letter I am writing them? Or, should I just have my attorney write them a letter?

Answer 1

You are entitled to the money. Did you get the check back? If you did, return it to the company by registered mail and ask them to issue a fresh one. Deposit that one promptly.

As for taxes, you had control of the money in the year you got the check (it does not matter that you did not deposit ti then). Consequently you must pay taxes on it in that year, rather than when you get the replacement check.

Answer 2

I'm surprised the bank accepted it. Checks are generally considered as stale dated after six months, and banks normally won't take them. You do have the right to a replacement, though.

How long ago did you email them? If it's within the last week or two, maybe they're in process of replacing it, although it would have been nice if they'd replied to your email. If it's been longer than that, I'd send them a letter, then if you still get no response, having your lawyer send a letter would make sense.

Answer 3

I think you need to get on the phone to the right person and also email copies of the stopped check-just emailing "into space" doesn't always work. Don't get mad before you find out whats going on-most companies,and banks won't cash anything older than 6 months and personally,I would have contacted them for a new check BEFORE trying to cash anything that old. Just find the right person in bookeeping and deal with them-they have a business to run too-