1099's and marking "no"

[JenMO]

Client doesn't want to file 1099's this year. How to mark and what might be the consequences?

[taxea]

Well, some people don't want to stop at stop signs either. You answer the 1099 questions honestly. Does he realize the deduction for the 1099's could be denied?
Possible consequences for tax payer are, penalty for each 1099 not issued, denial of deduction, and if the expense doesn't show on the return he could be in violation of conspiracy to defraud the IRS.

[Bees Knees]

I think you know the answer:

“Did you make any payments in 2012 that would require you to file Form(s) 1099?”

The answer is yes.

“If ‘Yes,’ did you or will you file required Forms 1099?”

The answer is no.

Tell the client this is what you have to put on his/her return, and that the client can expect a letter from IRS asking for further details.

Maybe the client will change his/her mind.

[ChEAr$]

Actually we can't tell a client to definitely expect follow up from the IRS. It (IRS) just doesn't do it 100%; only in case of audit.

So then, knowing this, how do we advise clients? (grin

[Bees Knees]

So then, knowing this, how do we advise clients?

I say, of course not everyone goes to prison when they do something wrong on their tax return.

[taxea]

Actually we can't tell a client to definitely expect follow up from the IRS. It (IRS) just doesn't do it 100%; only in case of audit.

So then, knowing this, how do we advise clients? (grin

You tell the client it is possible that he will receive a letter from the IRS if they catch the error. At which time he is leaving himself open for the items I listed in my first post.

[JenMO]

I put a statement on an engagement letter, saying client declined preparation of 1099's. Hope that covers me.