I got W-2 forms, from my builder, and I never worked for him!

I am located in Georgia.

I received 2 different income stubs (Miscellaneous Income forms) during the 2006 tax season from 2 different companies. Both companies are owned by my home builder. (I bought a brand new home from this builder almost 2 years ago). They state that I worked for each company and made "XX,XXX" amount of money. I have never worked for my builder, nor have I ever received a dollar from him.

This is one of the many headaches I have received from this builder. I cannot get in contact with him. I do not need the IRS coming after me for something I did not claim. What I can do to protect myself and prove I never worked for this man?

Thank you.

Angel G

Go to your local IRS office & ask how to file a complaint against him for filing a fraudulent W2 & 1099. There may be no way to do it, but the IRS may have a form you can fill out to try to head off a CP2000 letter. If that doesn't work, just wait for the IRS letter, then respond by explaining what the relationship was & that he never paid you money -- you paid him.

I also suggest you gather your evidence now so you have it when the IRS letter arrives. Have a record of payments to him & what they were for, & get a statement from your employer that you were working full time.

You could also file a complaint with the local builder's assn & better business bureau. You may also file a complaint with the state's attorney.

DKVRottweilers said:

I am located in Georgia.

I received 2 different income stubs (Miscellaneous Income forms) during the 2006 tax season from 2 different companies. Both companies are owned by my home builder. (I bought a brand new home from this builder almost 2 years ago). They state that I worked for each company and made "XX,XXX" amount of money. I have never worked for my builder, nor have I ever received a dollar from him.

This is one of the many headaches I have received from this builder. I cannot get in contact with him. I do not need the IRS coming after me for something I did not claim. What I can do to protect myself and prove I never worked for this man?

Thank you.

Angel G

Click to expand...

The burden of proof is on the builder to prove that he paid you. All you have to do when you get a notice is to write a letter stating that you never worked for nor received payment from the builder. The IRS will take care of the rest.

I would also follow up with the state DOL and tax office.

Just a hunch, but if you did receive "sweat equity" in the form of down payment assistance for having completed certain tasks (painting, landscaping, etc.) then it's possible that you were supposed to get a 1099. A w-2 being required is unlikely, though, as that would require you to have been an employee under their supervision, assigned specific tasks and methods, etc. Also, a w-2 requires the employer (in this case, your home builder) to have withheld taxes in your name. If he didn't do so, he's subject to penalties and can end up having to pay those taxes out of his own pocket.

I just re-read your post: in the title, you say "w-2," but in the body you say "miscellaneous income." So was it form 1099-MISC or form W2? 1099-MISC might be justified, for the reason I mentioned above. Check your closing statement, if you got credits in exchange for labor or the like, they might be right. They might still be wrong, though; home builders aren't exactly Mensa candidates.

REPLY - I don't understand

Thank you for the responses. Yes, it was a 1099-MISC as you said. I am not great with tax lingo and realized that made it a bit confusing.

When I purchased the home it was a brand new, completed home. Everything was complete. I did a regular purchase. I put down a $50,000 down payment and got a mortgage.

I did not need any other assistance or improvements on the property. I never received any labor or improvements from the builder. The builder does own several companies though. I got the first 1099-MISC from his lumber company. About a week later, I got another 1099-MISC from my builders other construction company he owns with his son. This form had a phone number on it, and when I called, it brought me to the voicemail of the builders son.

I would not be concerned if the amounts were small, but one is for $42,000 and the other is $11,000. These amounts are in box 7 where it states nonemployee compensation. Do you have any idea what this means or what this could be for?

Are you saying that these papers could mean I excepted some form of work from him, rather then it meaning I actually worked for him? I am just so confused. The only business I ever did with the man was buy a home from him.

Any suggestions?

Thanks.

Angel

One more thing...

RE: but if you did receive "sweat equity" in the form of down payment assistance for having completed certain tasks (painting, landscaping, etc.) then it's possible that you were supposed to get a 1099



Thanks for the suggestion, I understand what you are saying. However, I did not receive any assistance for the down payment. I got the funds from the sale of my other home in FL. I did not get any assistance for the down payment, painting, landscaping, etc.

Any other ideas you can of?

I really appreciate the help!!!!!

Angel

It really sounds to me like they are out-of-bounds on these, then. If you can't get ahold of them and don't see anything on your closing statement that might explain these, I would do as irsos and HomeGuru suggested and contact (via letter) the IRS, state, and local tax departments. Even if the builder has a justification for it, they should be available to tell you why!

Oh - just to verify - check the "Recipient's Name" and "Recipient's Identification Number" boxes and make sure that they're actually made out TO you. You never know, maybe they sent you copies of the 1099's that had to do with your house for no reason. Or perhaps they have an odd accounting setup that treats your purchase of the home as 1099 income for the subcontractors from you to the subs. (Grasping at straws here, I must admit..)

Good luck.

-David

Thanks

Thank you David. I will follow your suggestions.

Angel

This is a double post of one of a two part question. The 1099-misc is probably for uncompensated work the builder did in clearing a trash pit from the OP's property. It would not appear on closing documents because apparently the builder was unaware of the pit's existance.

Ok....exactly WHAT did you receive? W2s or 1099s? What kind of 1099s did you receive, and in what box on the 1099 was the dollar figure listed?

Ldij,

Please review reply box #6, where I explain in more detail what exactly I got.

Thanks!

DKVRottweilers said:

Ldij,

Please review reply box #6, where I explain in more detail what exactly I got.

Thanks!

Click to expand...

OK...in that case the 1099s are completely fraudulent. Had the amounts been listed in box 3, rather than box 7, an argument could be made that the amounts might have had something to do with cleaning up the trash dump...but with the amounts being in box 7, its clear fraud.

Considering the amounts involved, I would get an attorney involved. The builder needs to be forced to cancel those 1099s with the IRS.

Even if somehow the builder can make a case against you for issuing a valid 1099, the amounts DO NOT belong in box 7, they belong in box 3. There is a huge difference tax-wise between the amounts being listed in box 7 or 3. If they are listed in box 7, they are subject to self employment tax. If they are listed in box 3, they are not.