Hi all,
Does any of you know any previous case about contract labor expense deduction without issuing 1099?
My client who prepared his own taxes in 2007 is being audited. He paid $30K to contractors but did not issued any 1099. (He is a schedule C filer.) His payments was more than $600 to each individual he had paid. The IRS is questioning this deduction.
He has the canceled checks as proof of payment. However, he doesn't have the contractor's SSN's or their contact info anymore.
The closest similar case I found is Deputy v DuPont, but it doesn't answer my question clearly.
If you have any insight to share or know any similar cases, I would be glad to listen.
Thanks,
John