I just conducted business with a company and they asked me to write the payment check to their personal name. I guess this is legal but I started to think that maybe they were trying to skirt paying IRS taxes on business. Opinions?
2007-10-25 13:22:21 · 5 answers · asked by sgt 4 in Business & Finance ➔ Taxes ➔ United States
They very possibly are trying to evade taxes, and won't show this income on their tax return. But you haven't done anything illegal on your side.
2007-10-25 13:49:48 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
It is common and that is almost always the reason. You can usually do it without penalty to yourself so long as you get their Social Security Numbers and issue them a 1099 at the end of the year.
By the way, when you ask for their Social Security Numbers and tell them that it is to issue a 1099 to them, they will freak out and say all sorts of things. It could kill your deal, unless you aleady have what you paid to get. If thatis the case, tell them you will only write the check to the company because that is with whom you did business. They will again yell and scream, but there's little they can do about it.
2007-10-25 14:46:53 · answer #2 · answered by mcmufin 6 · 1⤊ 0⤋
Of course they are. Make sure you have a receipt as you could end up paying again when they say you never paid the company for the job. Oh that check, maybe they sold you a used banjo in a yard sale. You would need to prove it! The tax thing is not your problem, if they are indeed doing that it is their problem.
2007-10-25 13:28:45 · answer #3 · answered by Old Goat 3 · 0⤊ 0⤋
Yup, most likely. If you want to make sure they pay income taxes and the amount was over $600.00 send them form 1099 in January. One copy goes to them and one to the IRS.
2007-10-25 13:26:59 · answer #4 · answered by Dan H 7 · 0⤊ 0⤋
Before concluding legal or illegal, why don't to ask the company? If they want in the personal name, get the social security number.
2007-10-25 16:27:35 · answer #5 · answered by MukatA 6 · 0⤊ 0⤋