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prior yr 1099-misc issue continued

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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Reply to
Jim
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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. 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?

Reply to
clj1219

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?

Reply to
Jim

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

Reply to
Seth Breidbart

(snipped.

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

ChEAr$, Harlan

Reply to
Harlan Lunsford

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