Paper Route

[Oxtrainer]

Client comes in, late of course. He has a paper route and the only record is a
3 page sheet starting with the latest until the first of the year at the end.
The entries look like this.
Last estimated pia
last estimated draw
estimated pia credit
estimated draw
PIA back credit
3380 daily PIA credits
3616 daily papers
direct credits
check issued
The credits and estimated draws have figues with a minus.
Client does know length of route and days run. Outside of this 3 page record he knows
little else. Is anyone familiar with this or where can I obtain info on paper routes.
The Paper said the client is a contractor and supposed to keep his own records.
His 1099M has X in box 9 Any help appreciated

[Donanita]

Mileage

Have your client go over his route and log the mileage.The reportable income is the amt he collects from his clients and his expenses are the cost of the papers and supplies he buys from the paper company. The 1099 Misc is to show that he had over $5000 in sales. The number of days he ran his route is pretty simple as most routes are run daily is the paper is published daily.

[Oxtrainer]

Milage

I do appreciate your answer however the problem is that I know all those things you
have mentioned. What I don't know is how to read the three page list of entries and
I don't know if I am supposed to be able to determine his profit or loss from the list.
The paper has told me the client is supposed to keep his own records. This list is all
he has and he does not have the foggiest idea as to any thing other than the milage of
his paper route.

[Uncle Sam]

Paper Route

Why not have your client ask fellow colleagues who their accountants are and ask permission if he/she can be called for an explanation?
You could ask what the terms listed on the 3 pages are and what they mean. I can't see how they can deny defining their own terms.

[S T]

Paper Route

It seems that what the newspaper does is hire people and list them as "independent contractors" The 1099 is issued from the newspaper to the t/p as t/p "delivered/sold" more than $5,000 product in the calendar year for purposes of resale. Not sure if the 1099 form you have reflects the actual product that was sold to him or the net amount that the t/p received.

Excerpts from a Newspaper and how a Carrier is compensated and other requirements.

Carriers pick up the papers from the Newspaper and then deliver papers to the Newspaper's Subscribers (customers) . Carriers can also place papers in newspaper racks, deliver to dealers, and drop newspapers at the post office to be mailed to subscribers. Some carriers, called single copy carriers, only deliver to racks and dealers.

When hired, carriers do not complete applications. They sign a contract with the Newspaper , expressly describing them as independent contractors. The contract grants the carrier the nonexclusive right to purchase, sell, and deliver the Newspaper’s product in a designated area and to control the method and means of making deliveries. Carriers sign the contracts as individuals; none are incorporated. Thirty days’ notice is required for either party to terminate the contract without cause or for the Newspaper to modify the contract. The Newspaper can terminate the contract for cause without notice.

The contract, which prohibits carriers from displaying the Newspaper’ s insignia while delivering newspapers, obligates carriers to provide their services 7 days a week. It requires that newspapers must be delivered by 6 a.m. on weekdays and Saturdays and by 6:30 a.m. on Sundays. Carriers must post a bond—the amount of which is individually negotiated—with the Newspaper to cover any liability the carriers incur while delivering the newspapers or to cover delivery costs if the Newspaper has to take over the route. The contract also requires carriers to carry automobile insurance.

The contract specifies a wholesale price at which the Newspaper will sell the newspapers to carriers and a retail price at which the carriers sell the papers to subscribers. Under the contract, the Newspaper can change the wholesale price on 30 days’ notice, and the retail price is printed on the papers. The contract also provides for a flat weekly amount to be paid carriers, called the rate adjustment credit, which varies from carrier to carrier. Carriers who deliver to racks and dealers negotiate a per piece rate for their delivery services.

B. Method of Compensation

Most customers pay the Newspaper in advance for their subscriptions (PIA customers), but some customers pay their carriers (carrier-collect customers). Carriers bill those customers, deciding whether and to what extent to extend credit to them. If a PIA customer fails to pay the Newspaper’s bill, the customer is converted to a carrier-collect customer. The carrier has the discretion to either continue delivering the paper to the customer or to terminate the customer’s subscription for nonpayment.

Each month, every carrier receives a statement tabulating the amounts he or she owes, and is owed by, the Newspaper. The statements show the number of newspapers purchased by the carrier and the amount the carrier owed the Newspaper for those papers. It also shows the amount of money the Newspaper owes the carrier for newspapers subscribed to by customers who have paid the Newspaper in advance. That amount is credited to the carrier, along with the carrier’s rate adjustment credit, which is reflected on the statement. If the carrier services a newspaper rack, a $1 per month charge for rental of the rack is shown. Carriers are also charged for any sales tax they collected from customers they bill directly and for a $1 per month service charge for processing sales tax. The net credit is remitted to the carrier by check.

The Newspaper does not withhold income taxes or pay workers’ compensation. In addition, carriers receive no fringe benefits. At the end of the year, the Newspaper issues carriers a 1099 form.

Carriers provide the vehicles they use to service their routes. Carriers maintain their vehicles, and are not reimbursed for any maintenance or operating costs, although they might receive a gas subsidy the Newspaper initiated to offset higher gas prices. If the carriers are unable to use their own vehicles, they are responsible for finding replacements.

Carriers pay for their own supplies, such as plastic bags and rubber bands, which they can purchase from the Respondent or another vendor.

This probably more info than what you need, but maybe will aid you in trying to read the statement that accompanies the 1099 form.

Sandy

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[Black Bart]

The Ox-Draw Incident

My condolences. I, too, was once similarly afflicted with that accursed species, papiai carrius. Happily, he (comatose) went broke within two years. Unhappily, he passed the torch to his spunky spouse who (undaunted) forged hopelessly on for another year. They lost money, but didn't suffer quite as much as me -- their skulls were as "stout as an ox" and their B.O. would "drop an ox." After three years, I would've swapped places with Spartacus.

Well, enough of that -- let's see now, how did that go? Okay, I've dragged out my old records, proforma, etc. My guy was a clone of yours -- attitude: "I drive X miles per day." Other info: "I-know-nothing." Sole records: incomprehensible three-page monthly computer printouts issued by the newspaper.

Your printouts sound a lot like mine, but with some differences in the terminology. Forget about help from the client -- what you have to do is call the newspaper office and find somebody who will go over your list with you and tell you what each of your listed items means. They told me the same thing yours did; he's an independent contractor and has to keep his own records (an easy out for them--issuing that measly little "X--over 5K" 1099). But anyway, I got hold of a helpful clerk and she solved the mystery for me. If the first one won't help, wait a few days and call again. If it's a large office you may get another who will.

After you do that, get a 12-columnar pad and separate the debits and credits each month, taking into account beginning and ending balances. The tedious thing about those printouts is that the carrier never really settles up in full; it's just a continual running accounts receivable/payable.

I had "draw charges" which was the cost of papers for mine, but it sounds like your "estimated draw" is just an advance on the "3616 daily papers" charge (I didn't have that term). I think your "3380 daily PIA credits" is newpaper sales (the big item) for whom payment was sent to their office. Those various credits were income for my guy: "back credits" was "old" income / "direct credits" were cases in which the client paid the carrier instead of sending it to the newspaper office. He also had various debits: bond, insurance, complaint charges, and miscellaneous expense.

One other thing -- my client had sales from outside stands and those aren't reflected on the printouts. The best he could do was tell me how many papers a day were put in them and I added markup to cost (weekdays and Sunday prices different), basically estimating it.

If you're lucky, he won't last too long . It's a high-turnover occupation because of the hard work, lousy hours, etc. But if you see anyone else coming toward the front door with those green printouts, run for the back office. Tell your secretary to say you (pick one) (1) died (2) moved to Iceland (3) have come down with an airborne extremely contagious strain of bird flu.

[Oxtrainer]

ox-draw

Thanks to all of you. Obviously no small amount of time has been invested in providing
this information and I can take comfort in the fact that it has happened to others. This
client has went out of business as he said he was not making any money.