Urgent....forgot to send 1099
************************************I have a situation where I forgot to send a 1099 to the IRS for 2005 for some services rendered by an individual. Doing 2005 taxes now with an Oct 15 extension.
What can I do?
Are there any penalties attached to sending the IRS a late
1099? late fees? penalties? Pls let me know .....URGENTLY.Thanks in advance for your help.
Best, Kalpana
Yes, there is a penalty for late filing of 1099's. Up until THIS year, this really wasn't a problem. Ive never heard of penalties being assessed before year 2005. However since then I've heard of a couple of cases where IRS is taking a hard line. I know how this may sound, and I'm not advising either way (!!) but if you don't file even now, how will they miss it? There's no cross check with the payee anyway. So only in case of audit of your business return (since 1099's aren't used with personal transactions) would IRS have a chance to notice. And even then, ....... (grin) ChEAr$, Harlan Lunsford, EA n LA
Harlan Lunsford wrote: [...]
Schedule C, line 11 is where contractor expenses are entered. Shouldn't the amount entered be the sum of the amounts reported on forms 1099-MISC except for those contractors who don't meet the minimum ($600 I think)? I would think that it would be easy for the IRS to reconcile line 11 with amounts reported on forms 1099-misc and flag those with a large discrepancy. Perhaps I don't understand the situation with the forgotten 1099. Howard
That so called 'contract labor line is IRS's attempt to try to force 1099 reporting; not that that's bad of course. But no, they could never match it up because it's just for labor, and as we know 1099's are issued for other situations, e.g. rent, and to individuals furnishing both materials and labor. Some 1099's may be issued to repairmen, in which case the expense is included in that category. Also 1099's are issued to contractors whose services may be properly attributable to Cost of Goods sold on page 2. No size fits all I guess.
ChEAr$, Harlan Lunsford, EA n LA
Reconciling Schedule C with 1099s sent is not necessarily easy. In addition to those under the minimum amount, there may be other reasons for not sending 1099s. The contractors may be corporations or they could be foreign persons or entities, who don't receive 1099s. Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans
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