1099-misc issued to wrong payee

[Dan5]

Hi,

My client received letter from IRS for 2003 tax return about unreported non-employee compensation of 10,000. Supplied by IRS form 1099-misc properly contains name and SS of the client. The client says that he never worked for the payer company issuing 1099-Misc in 2003. It looks like somebody else used his name and SS.

How do you deal with problem like this? How to explain mistake?
Dan

[Snaggletooth]

Go to Payer

Dan, unless you want an extremely lengthy, drawn-out, and maybe unsuccessful battle, don't try to work with the IRS on this. All they know is that some payer somewhere claims to have issued your client payments totalling $10000 in 2003. Generally speaking, only the payer can unravel the damage done by issuing the 1099.

You need to get back to the payer. The client acts like he doesn't know a thing about this, so you should compose a letter for your client's signature, asking for an abstract of check numbers, dates, and amounts. If the payer doesn't want to co-operate, and your client ends up having to pay this, then your client may have cause for action against the payer.

You might also ask yourself if the payer is in the same town or same general area as the client. If your client is a drywall expert and the payer is Ace Construction Company with an address right down the street, it's very likely your client is either lying or mistaken. You shouldn't jump to that conclusion and shake an accusing finger, but just keep this in the back of your mind for a reality check.

[Brad Imsdahl]

How does a payee get the correct name and address and Social Security Number of a perfect stranger?

I suppose it could happen, but for what purpose?

There is more to this story that has not yet been told.

[Dan5]

1099-Misc Update

Brad,

You were right.
The taxpayer was divorced before (at least his tax return for 2003 shows Single status). His former wife used his name and SS when she was issued 1099-Misc by the company.
What do you think?

[Snaggletooth]

Get a Lawyer

If your client had a lawyer for this divorce, tell him he needs to call his lawyer.

This is fraud. He can literally throw the book at her if what he tells you is truth...

[DaveO]

Then respond to the IRS notice

With the ex-wifes name and social security number and get the IRS off your clients tail on onto hers.

[jainen]

client has never heard of

>>How does a payee get the correct name and address and Social Security Number of a perfect stranger?<<

A lot of times the client was the right worker (for income he has conveniently forgotten), but the 1099 comes from a parent or associated company with a completely different name that the client has never heard of.