No 1099-MISC Received

[Hoons]

What is the name of your state (only U.S. law)? Indiana

One of my clients never sent me my 1099-MISC (or it got lost in the mail). The amount was for over $25K. I do know the exact amount for the Schedule C so that's not an issue, but will I get penalized for not filing it with my return? The client was from India, but their checks came out of Chicago. Also, if for some reason they never filed it with the IRS, will me claiming the income cause issues for me? Thanks in advance.

 

[tranquility]

Unless there is withholding, you don't "file" the form. Just report the amounts.

 

[OHRoadwarrior]

What did they say when you called them and asked about it?

 

[davew128]

What did they say when you called them and asked about it?

Why does anyone care? The 1099 doesn't "get filed" with the tax return and if the client was in India, wasn't required to issue one anyway.

 

[HomeGuru]

What is the name of your state (only U.S. law)? Indiana

One of my clients never sent me my 1099-MISC (or it got lost in the mail). The amount was for over $25K. I do know the exact amount for the Schedule C so that's not an issue, but will I get penalized for not filing it with my return? The client was from India, but their checks came out of Chicago. Also, if for some reason they never filed it with the IRS, will me claiming the income cause issues for me? Thanks in advance.

**A: you do not need to file the form just report the income on C. If they do not file with the IRS, there is no problem with you reporting the income. The problem is the other way around.

 

[Hoons]

OK, thank you. I'm glad I don't need it. Just out of curiosity, if they didn't file it with the IRS will THEY get in any sort of hot-water when I claim it on my Schedule C. And yes they are in India, but as I said, the checks come from Chicago, so they have a US office.

 

[Hoons]

To answer the question of what they said, they haven't responded to my query yet.

 

[tranquility]

OK, thank you. I'm glad I don't need it. Just out of curiosity, if they didn't file it with the IRS will THEY get in any sort of hot-water when I claim it on my Schedule C. And yes they are in India, but as I said, the checks come from Chicago, so they have a US office.

In some states, they might not get to deduct the amount. Federally, I don't think there is a blanket prohibition yet, but there is some minor information return penalty. The government is not going to know where you got the money so your reporting the information will have no effect on the payer.

 

[Hoons]

There are some states that would not allow them to deduct the expense of contract labor, so we both get taxed on the same money? Sheesh, that doesn't seem fair.

 

[tranquility]

There are some states that would not allow them to deduct the expense of contract labor, so we both get taxed on the same money? Sheesh, that doesn't seem fair.

My state, CA, is one. The reason is that the purpose of the 1099 is to insure all income gets reported. If someone does file a 1099, someone not quite honest might "forget" to put it on. Also, it helps audit deductions that are reported. Someone ships you a 1099 for an amount you've never heard of and you're going to give them a call. Frankly, the penalty (I think it $50, but have no idea.) is so small that without that larger "penalty" lots of payers might play the audit lottery.