Leaderboard

You sure have. Welcome back.

I generally inform the client that they have a reporting requirement and offer to prepare the 1099s for them (for a fee, of course). If they decline my offer, then we have the discussion about deductibility and audits and losing audits and paying taxes and paying penalties and paying interest and possibly finding someone else to prepare their returns. I like to educate, and it is not my job to disallow deductions - that happens at audit by the IRS or the tax court. If it is a one off oversight, then we do what we can to make the return correct for filing. Tom Longview, TX

The fact that 1099s aren't issued doesn't mean that the deduction isn't a valid expense of the business, but that the taxpayer isn't compliant with reporting and backup withholding requirements. You may also have clients that have unreported income because some people believe that amounts below the $600 threshold aren't taxable income because the IRS form wasn't issued. I'd suggest that you review the reporting requirements with each of your affected clients that are disregarding the rules and then decide how to proceed ewith those clients, if at all.

Thanks all! I forgot about this community; I have been with ATX since 2006, I sure have missed a lot.