Hello,
I am not a tax professional, so if I get this messed up I appolgize.
I just received a 2009 1099 MISC from a former employer that is reporting over 2,000 in Box 3 (other income). I was a Broker for them. My last employment with them was June 2006. Not that it matters, but they always had a screwy pay/bill system, and they defiantly almost went under during the melt down.
I called to inquire about the 1099, and was told that it was created from a debit balance on my old commission account. I asked for more info., and was told that it was from something in 2005, and they would get back to me (they haven't). All I can think of is there was some type of commission mistake or charge back?
Anyway, I went to the IRS web site and this is a Box 3 option, and am assuming this covers what they are doing:
"Termination payments to former self-employed insurance self-employment tax and are reportable in box 3 (rather than
box 7) if all the following apply...etc."
Now my issue:
1. I am not sure where this 'payback' came from, and I probably could make a stink about it and fight the 1099.
3. If I did have a legitimate debit balance, I won't have a problem paying it (but they will have to prove it first).
4. I shut-up, sit back with a fine beverage, pay the tax on my new "other income," and the company writes it off as an expense.
Frankly, I am pretty busy, and I don't want to deal with it; so I am strongly leaning towards #4. BUT, my concern is that even though they are writing it 'over' to an expense by issuing me the 1099 income is that they will try to pursue me with some type of collection/debt 'thing' for the 'phantom' debit balance.
I ask because of how 1099-C's can work; my understanding is that when a bank Debt is charged-off on a 1099-C(instead of forgiven) the creditor can still go after the debt-er.
Or, are they not related?
Thanks for you time; I am just trying to be proactive.
