Reporting error on 1099's

[DTS]

What is the best way to handle a reporting error I found regarding 1099 amounts issued against what was deducted when a return is being examined? I found the amounts on three 1099's were incorrect, two slightly underreported and one modestly overreported. Nothing drastic, but errors, nonetheless.

I feel I should bring this to the attention of the examiner and let him decided how to correct the reporting error I found, but I would like your thoughts before I do this, as there might be a better way to proceed.

Thank you.

[Kram BergGold]

Be more clear

Are you saying, your client is being examined and one of the issues is his expenses reported on 1099 forms, and that you now see that the amounts he paid are different from the amounts reported? If so this is a no brainer. However, if he is not being examined for payments to subcontractors and the difference is either small or in his favor why birng it up?

[DTS]

Are you saying, your client is being examined and one of the issues is his expenses reported on 1099 forms, and that you now see that the amounts he paid are different from the amounts reported? If so this is a no brainer...

Yes, this is the case.

[DTS]

Sorry, my post was not clear. I just wanted to be sure of the protocol for correcting this error while the return in being examined.

Thanks.

[JON]

Let the the auditor

inquire and then show him why???

[joanmcq]

sometimes if you bring up an error (if this is the area being examined) saying, 'we found this discrepancy; how do we fix it', it raises your credibility to the auditor. for example, in one audit, the client had missed some unemployment & interest. we said, yeah, we know about that, no challenge, taxpayer made a mistake. It saved the auditor time and we gained credibility, which made everything else we said be accepted much easier.

[S T]

Agree with Joan

If this examination includes the 1099 issues you have posted, you should bring up to the auditor what you found. Based on your post it could be a "nominal" amount.

The auditor will thank you more than likely and it could minimize other issues under examination on the return.

Good Luck,

Sandy

[DTS]

Joan and Sandy

Thanks so much. I feel as you both do and like to approach things like this. Thanks Jon, as well.