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You put the offset as an other expense. Don’t reduce the revenues because they will catch that and send a letter. Put as an other expense and title it something like this: “1099 issued incorrectly – s/b rents” or “Amount properly transferred to Sch E”.

Have done this with every, yes every, incorrect 1099 over the last 20 or so years. No IRS notices. I do not even bother to try to get them corrected, just put it on the return & take it back out again.

Document the rents, put the 1099 on Non-employee comp and then back it out on the return, and report it on rents. Wait for the letter. Send in the documentation. Wait for the response. Answer questionaire about political affiliations with the payer (OK, maybe that won't happen). You will spend less time doing it this way than trying to get the 1099 corrected. Tom Hollister, CA

I've wanted to do this for a while now. Some of the clients I've mentioned it to thought it was a good idea. My office door is directly to the outside, so I don't want to put a permanent slot in the door. I'm cold enough already and my office is the coolest room in the house. I have a front porch that is covered, but I'm not too keen on having everyone walk up to the front door either. I like to keep the personal part of my house as off limits as is possible, even though that's hard at times. I do warn people that if they stop by unannounced in the summertime, they might be hailing me down from the large mower out in our field. So anyway, back to the point of the dropbox, I'm considering purchasing a locking mail box from the home improvement store. I looked at the nicer ones, and with the sale price it would run in the $100-120 range before the post and other hardware. What do others of you use? Here's a picture of the side of my house. I was thinking that I could put the box at the end of that short section of sidewalk is where that hosta is growing, next to the steps railing on the right side.

This sure made me laugh out loud, so maybe it belongs under "Joke" rather than "Tax" Rangel: ‘This Is Wrong to Abuse the Tax System’ http://freebeacon.com/rangel-this-is-wrong-to-abuse-the-tax-system/

Does come in handy to cover up those holes and torn wallpaper in the wall!

I have a feeling MsTabbyKats does not want to turn into a "Professor of Taxation". She won't be able to charge enough from these clients for her time and efforts!

Agree. He reported more than the 1099 was for. It did not rise to the level of a business. Be ready for the letter from the IRS seeking SE tax, but do nothing right now. Tom Hollister, CA

Only if he earned $700 plus the $1,000 he reported. If the $1,000 included the $700 and if it really was not a for-profit business, then you're done. But, I can see an IRS letter re SE tax in his future.

Put the $1900 on a Schedule C-EZ. Create a deduction for "1099 reported incorrectly". Then put the $1900 on the Schedule E. You will not get a CP2000 if you do the return this year.

If I posted the certificates from all the classes I attend, I would have run out of wall space in my office 9 years ago, and in the rest of my house 5 years ago. I have my CPA certificate, my degrees, my biz license (required) and certificates from tax & accounting organizations I belong to.

The 1099 issuer was the state so perhaps they may correct it. But you are right most payers (especially ocassional payers) do not correct it properly and may compound the problem. That is why it may be preferable to deal with it at the CP2000 level because then at least the IRS records will be reflected as no change?

Don't expect that to be the end of it. I've seen many corrected 1099 forms wind up duplicated, primarily because the issuer doesn't handle it properly. They issue a second one rather than a corrected one, then they compound the problem by just sending the IRS copy on in. This doesn't delete the first one in the system, so he will now show two in the system with identical amounts in different boxes. Or else they issue a corrected, properly marked 1099 to the taxpayer with the info in the right box but they don't file the corrected one with IRS at all. This will also cause problems and probably an AUR notice a couple of years down the road.

PUT A Slot in your garage door, you won't feel any chills and the docs will be inside, YOu can even add a box to catch the mail below the slot so you don't drive over any papers inadvertently.

I just searched "locking mailbox" and found hundreds of designs. So, you can pick one that will be obvious to your clients, but not obvious to your mailman! And, that fits your home's style and colors. I think the most important point is that it allows a really fat package of tax documents to be inserted totally. Although, even more important is that it's securely fastened to your house in some manner that you trust and that will be perceived as trustworthy by your clients. I'm not sure a post would be secure -- even if no one can break into the box quickly, they could cut off the box to steal and break open at their leisure. That's why I like my mail slot -- the documents land in my locked house. I did consider having the mail slot in the wall of my house so packages land in my front closet to keep out the cold, but decided I can add a flap of insulation if needed (which I haven't). Can you have a mail slot in a door or in a wall with packages dropping into a box fastened inside your house? Instead of a box outside your house where someone could steal the box? Then nothing lands on your dog!

I would not do that. I would have a slot put in to the side of the house. Those are very sensitive tax docs and you are leaving them outside. If word got around that you had all the information for an identity theif would need sitting in a lock box outside, they would try to steal it. Maybe would not happen in your neck of the woods, but I would not chance it in CA. Just my 2 cents. Tom Hollister, CA

>>I would recommend stensiling "TAX RETURN ONLY".<< I would put "TAX RETURN INFORMATION ONLY". Some people might think it means what it says.

Like throwing billions of dollars at social welfare programs, unConstitutionally, over the course of decades, to have the same percentage of people in poverty as when they started -- with the additional burden of the total destruction of the family structure and the solid, respectable, hard-working community social structure in poor areas? You mean that kind of insanity? Speaking as one who was raised Democrat/liberal, just open your eyes and LOOK at what the "liberal" policies have done in the past decades. A more complete and thorough destruction of an entire section of our nation can hardly be imagined, all in the name of "helping" people. It's there, plain as day, but you must be willing to see what is _really_ there and not what you _want_ to see. Far too many people are not willing to open their eyes. I am a Constitutional Libertarian in large part because of the incredible damage that has been done (and continues to be done) to the poor and needy, for political gain.