What Would You Do?

[Diane]

I have a client who disputed the amount on her 2007 1099. She had cancelled checks, etc., that showed a different amount. She asked that I write to them (on my letterhead) and ask for verification of the amount they used. I did, and they wrote back that they had included a Dec. 26 check in the 2007 1099 and not in the 2006 1099; and they showed a copy of the check. They should have included the amount in the 2006 1099; but, the amount is going to be taxed either in 2006 or 2007. This would require an amended 2006. The 2007 return has not been done yet. Now, the client wants me to write them again asking for verification of the amount on the 2006 1099. This time she has no copies of cancelled checks, etc., to prove otherwise. I told her I was not comfortable asking for verification (using my letterhead) of an amount that she can't even prove; that, for 2006 she will have to write the letter. What do you think?

[michaelmars]

I THINK YOU write the letter! its not accusing them of anything wrong to ask them how they got their number and after all they already admitted they were inaccurate in 06 & 07 and should be glad to help you understand their erroneous 1099's

[BulldogTom]

Are you getting paid your full hourly rate?

I would probably not do it. You might lose a client if you don't but this could end up being a vicious cycle. And then you are the bad guy if it does not turn out the way she wants.

But, as you have already started helping by writing the first letter.........

Are you getting paid your full hourly rate?

Tom

Lodi, CA

[Bart]

I have a client who disputed the amount on her 2007 1099. She had cancelled checks, etc., that showed a different amount. She asked that I write to them (on my letterhead) and ask for verification of the amount they used. I did, and they wrote back that they had included a Dec. 26 check in the 2007 1099 and not in the 2006 1099; and they showed a copy of the check. They should have included the amount in the 2006 1099; but, the amount is going to be taxed either in 2006 or 2007. This would require an amended 2006. The 2007 return has not been done yet. Now, the client wants me to write them again asking for verification of the amount on the 2006 1099. This time she has no copies of cancelled checks, etc., to prove otherwise. I told her I was not comfortable asking for verification (using my letterhead) of an amount that she can't even prove; that, for 2006 she will have to write the letter. What do you think?

What happens when the difference in the recap is different than the difference in that one December check? Are you then going to write a letter asking for backup of the 2005 1099? And how far back are you going to try to chase this?

[lbbwest]

I have a client who disputed the amount on her 2007 1099. She had cancelled checks, etc., that showed a different amount. She asked that I write to them (on my letterhead) and ask for verification of the amount they used. I did, and they wrote back that they had included a Dec. 26 check in the 2007 1099 and not in the 2006 1099; and they showed a copy of the check. They should have included the amount in the 2006 1099; but, the amount is going to be taxed either in 2006 or 2007. This would require an amended 2006. The 2007 return has not been done yet. Now, the client wants me to write them again asking for verification of the amount on the 2006 1099. This time she has no copies of cancelled checks, etc., to prove otherwise. I told her I was not comfortable asking for verification (using my letterhead) of an amount that she can't even prove; that, for 2006 she will have to write the letter. What do you think?

Usually if someone is self-employed they have earnings in excess of what is reported on 1099s, I use actual earnings. If your client only works for one employer there may be issues about whether she is an employee or not.