Received 1099-MISC But Didn't Get Paid
cindy
company and they never paid me for it. They sent me a
1099-MISC form though and with this extra self-employment
income I have to pay an extra $200 in taxes.
I have been contacting the company for the past several
months and it's excuse after excuse. They are obviously
having financial problems because they aren't publishing any
new magazines "until further notice".
It's bad enough that I didn't get paid but I'm NOT paying
$200 in taxes for money that I didn't receive. Does anyone
know how I should go about this? Is there a way to contest
the 1099-MISC?
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Arthur L. Rubin
> In November I wrote a magazine article for a publishing
> company and they never paid me for it. They sent me a
> 1099-MISC form though and with this extra self-employment
> income I have to pay an extra $200 in taxes.
What _I_ would do is not report the income (unless, of
course, you're an accrual basis taxpayer). According to the
instructions on page C-3, you have to attach a statement if
your reported income is less than the total reported on
forms 1099-MISC box 7.
Alternatively, you could report it on line 1 of Schedule C
and back it out on line 2 (attaching a statement there,
also).
--
Arthur L. Rubin 216-...@mcimail.com
(Service to be discontinued June 2003 -- watch my posts for
further developments)
Phil Marti
> It's bad enough that I didn't get paid but I'm NOT paying
> $200 in taxes for money that I didn't receive. Does anyone
> know how I should go about this? Is there a way to contest
> the 1099-MISC?
Just file your return correctly. I can't tell if this was
your only writing gig for 2002 or not. If it was, I'd just
ignore the 1099. If IRS inquires, you tell them that you
never got paid and they'll go to the issuer if they're
interested, which they probably won't be. If you're already
doing a Schedule C for writing, include the 1099 in gross
receipts and back it out as an unpaid billing.
Phil Marti
Topeka, KS
Thomas E. Healy
> $200 in taxes for money that I didn't receive. Does
> anyone know how I should go about this? Is there a way to
> contest the 1099-MISC?
Most writers are on a cash basis of accounting. Thus, if you
didn’t get the money you don’t report it. If your
writing business generated more income than is reported on
1099’s that’s easy. Otherwise, you could add an expense
line, “reported income not received in 2002.”
Tom
--Solving your tax and business problems with
Professional Service...Personal Attention
Email: t...@tomhealycpa.com
Web: http://www.tomhealycpa.com
Lanny Williams
> In November I wrote a magazine article for a publishing
> company and they never paid me for it. They sent me a
> 1099-MISC form though and with this extra self-employment
> income I have to pay an extra $200 in taxes.
>
> I have been contacting the company for the past several
> months and it's excuse after excuse. They are obviously
> having financial problems because they aren't publishing any
> new magazines "until further notice".
>
> It's bad enough that I didn't get paid but I'm NOT paying
> $200 in taxes for money that I didn't receive. Does anyone
> know how I should go about this? Is there a way to contest
> the 1099-MISC?
You don't have to "contest" the 1099, simply do not include
it in the income you report on Schedule C. 1099s are
presumptive evidence of your income but not conclusive. If
you maintain records of your income, as the law and
regulations require, your records prevail until IRS can
prove that they are wrong. The 1099 you recieved is not
proof for this purpose.
If you received income from anyone who did not issue a 1099,
you may not even hear from IRS. If the total you report on
Schedule C is more that all 1099s they receive, they will
not do anything. If their totals are more, you may receive
a letter from them. When you do, you write them an
explanation.
Things like this happen all the time. A few years ago, one
of my clients won $36,000 on Jeopardy. They sent him a
check, dated 12/23, in an envelope with a postmark of 1/5.
But they reported the total on a 1099 for the year he was on
the program. Fortunately, my client kept the envelope and
we reported the income in the second year. IRS did ask but
we told them what happened (and sent a copy of the envelope)
and never heard from them again.
--
Lanny K Williams, C P A
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans
RONGROEN
> way to contest the 1099-MISC?
Understand how the IRS matching process works. They get a
copy of this 1099-MISC and are looking for you to report it
as gross income on your return, most likely a Sch C. Once
you don't do this, you are guaranteed correspondence about
the non-match. The amounts you list as expenses will most
likely not get special attention as long as the gross amount
matches. Provided we are not talking huge numbers here, I
would complete the Sch C with the correct gross income, any
legitimate expenses you have, and take the full difference
as "OTHER" on page 2, with wording something to the effect
"Moneys not received" and fill in the amount to zero out the
schedule. There's a good chance that will be the end of it,
but the possibility exists that they will contact you. If
the rest of your return is relatively audit proof, an audit
is the worst you could have, and you should be able to
defend it with the non-payment facts.
You have another option. Tell the IRS you never received the
money, but be sure of your facts. There have been rulings
where the burden of proof that you received the money is on
the IRS, and they will have to get this proof from your
publisher. Expect them to give you a hard time on this, but
the law is on your side.
As a side note, it sounds like this publisher is "Cooking
the Books, ala Enron" by reporting expenses not actually
paid. Depending on the size of this company, that could be
an entirely new issue with the SEC.
Ron, EA in FL
Office
> In November I wrote a magazine article for a publishing
> company and they never paid me for it. They sent me a
> 1099-MISC form though and with this extra self-employment
> income I have to pay an extra $200 in taxes.
>
> I have been contacting the company for the past several
> months and it's excuse after excuse. They are obviously
> having financial problems because they aren't publishing any
> new magazines "until further notice".
>
> It's bad enough that I didn't get paid but I'm NOT paying
> $200 in taxes for money that I didn't receive. Does anyone
> know how I should go about this? Is there a way to contest
> the 1099-MISC?
Simply attach a statement to your 1040 for the year and a
copy of the 1099-misc form. The statement should set forth
the facts as you state them above, and telling IRS that is
the reason the amount does not appear on line 20 of your tax
return.
Cheer$,
Harlan Lunsford, EA in LA
Dave Woods, EA
> In November I wrote a magazine article for a publishing
> company and they never paid me for it. They sent me a
> 1099-MISC form though and with this extra self-employment
> income I have to pay an extra $200 in taxes.
Why are you paying tax on income you didn't receive?
> I have been contacting the company for the past several
> months and it's excuse after excuse. They are obviously
> having financial problems because they aren't publishing any
> new magazines "until further notice".
>
> It's bad enough that I didn't get paid but I'm NOT paying
> $200 in taxes for money that I didn't receive. Does anyone
> know how I should go about this? Is there a way to contest
> the 1099-MISC?
Yes, don't report it as income.
--
David M. Woods, EA
Boston, MA 02109
Postings here are general information only and not to be
relied upon as advice.
Frank S. Duke, Jr.
> In November I wrote a magazine article for a publishing
> company and they never paid me for it. They sent me a
> 1099-MISC form though and with this extra self-employment
> income I have to pay an extra $200 in taxes.
>
> I have been contacting the company for the past several
> months and it's excuse after excuse. They are obviously
> having financial problems because they aren't publishing any
> new magazines "until further notice".
>
> It's bad enough that I didn't get paid but I'm NOT paying
> $200 in taxes for money that I didn't receive. Does anyone
> know how I should go about this? Is there a way to contest
> the 1099-MISC?
If you are a self employed writer, I would include the
1099MISC in your schedule C and then subtract it back out as
a negative adjustment explaining that the money was not
actually received.
If you have no other self employment income, include a copy
of the 1099MISC on the back of your return and write a note
on it that the payer reiniged on the payment so you did not
actually receive the income.
All freely provided advice guarantee correct or double your
money back
Frank S. Duke, Jr. CPA
Cincinnati, OH USA
Paul A. Thomas
> In November I wrote a magazine article for a publishing
> company and they never paid me for it. They sent me a
> 1099-MISC form though and with this extra self-employment
> income I have to pay an extra $200 in taxes.
>
> I have been contacting the company for the past several
> months and it's excuse after excuse. They are obviously
> having financial problems because they aren't publishing any
> new magazines "until further notice".
>
> It's bad enough that I didn't get paid but I'm NOT paying
> $200 in taxes for money that I didn't receive. Does anyone
> know how I should go about this? Is there a way to contest
> the 1099-MISC?
Yes. Since you received the 1099 (and so did the IRS)
report the money on Schedule C and then back it off on page
two with a note saying that those funds were never received.
You may also want to attach Form 4598 to report the
incorrect 1099.
You should also be able to take any deductions you incurred
to generate the money you never received (business
expenses), unless this was just a hobby and not a business.
--
Paul A. Thomas, CPA
Athens, Georgia
tax...@negia.net
Pete Buser EA
> In November I wrote a magazine article for a publishing
> company and they never paid me for it. They sent me a
> 1099-MISC form though and with this extra self-employment
> income I have to pay an extra $200 in taxes.
>
> I have been contacting the company for the past several
> months and it's excuse after excuse. They are obviously
> having financial problems because they aren't publishing any
> new magazines "until further notice".
>
> It's bad enough that I didn't get paid but I'm NOT paying
> $200 in taxes for money that I didn't receive. Does anyone
> know how I should go about this? Is there a way to contest
> the 1099-MISC?
<Cindy........Getting the 1099 Corrected is more trouble
than it is worth. Report the income on Schedule C. Take
a deduction for the same amount on line 2 returns and
allowances. Good luck.
Pete Buser EA