1099Misc Question

[dmj4]

I have a client that will get a 1099MIsc from a corp for 650K. He files a Sch C. He has been contracted to build pallets. He hired a corp to build them for him and paid them $562K.

I understand that we do not need to send the corp a 1099Misc, but I am a little concerned about putting the $562K expense on a Sch C without something to back it up.

I am thinking of issuing the 1099Misc for that reason.

Any advice?

Thanks!!

[JG EA]

You are not the enforcement agency for the IRS. A business expense is recorded as such (Cost of goods, whatever). You don't have to prove the expense unless you have to prove the expense. The client no doubt has receipts, cancelled checks, and other adequate accounting.

If you are not required to send a 1099, well then you are not required to send a 1099.

Does it fall into one of the categories where you report to a corporation (page 2 of the general 1099 instructions)? I

[S T]

When in doubt

As has been stated, when in doubt, issue the 1099 Misc Form. However, your client should have invoices for backup to the Corp in question, so should not be an issue for his deduction on his Schedule C.

Sandy

[ChEAr$]

Who stated that?

As has been stated, when in doubt, issue the 1099 Misc Form. However, your client should have invoices for backup to the Corp in question, so should not be an issue for his deduction on his Schedule C.

Sandy

It's still wrong in this case to issue a 1099misc