Fraudulent 1099-MISC

[tibicina]

What is the name of your state? North Carolina

O.k. This situation is a bit complicated, so bear with me. I married my current husband in 2007 and only started filing jointly with him for tax year 2007.

He is self employed and works as a sub-contractor to several home builder companies, receiving (typically) two to five 1099-MISC forms.

In 2004, an individual known to be a scam artist by other contractors filed TEN identical 1099-MISC's claiming my husband worked for him. My husband never worked for this man, nor ever received any kind of payment from him, and my husband's primary business partner has remarked that the man in question has tried this scam before on other subcontractors in the local area.

The 1099's in question contain the man's name, his address, TIN and all that, so he CAN be contacted.

Fast forward to today... I file jointly with my husband, completely unaware of any tax liability he might have. The IRS does not deposit my expected refund or stimulus payment. When I call to inquire, I am told that the money is being held by the IRS due to either (a) a federal lien on my husband or (b) a request by the IRS that my husband file a 2004 return to clear up some question about it (I assume about the identical 1099's). Because I am not required to pay his tax lien, I filed an Innocent Spouse form (8865?) with my 2007 tax return, but have been told that if the hold up of my money is due to his 2004, then he has to correct that issue before they'll let even my share of the return and stimulus package be deposited.

I'm willing to assist him in filing the 2004 return, but am unsure about how to deal with the fake 1099's as far as the IRS is concerned. The IRS hasn't directly questioned us--as in doing an audit--so I'm not sure if I have to file forms stating that the 1099's are fraudulent.

Help!

[irsos]

If you filed an Innocent Spouse claim - that is not the correct form. You should have filed an Injured Spouse claim - Form 8379.

As for the erroneous 1099, the burden of proof is on the issuer of the 1099 to prove they paid your husband that amount. In preparing the 2004 return, you ignore that 1099. If the IRS has already assessed a liability for 2004, it will be a little trickier.

I suggest you get professional help. You are over your head.