labor -no 1099

[gman]

Client has small concrete business pouring slabs for several home builders. Often individuals will ask if they can work the one job. Taxpayer failed to get info on ss#'s etc.

Most were paid under the 1099 limit. Taxpayer wants to know if it can show labor paid, even though there is no documentation on labor paid.???

[Burke]

No documentation. Do you mean he paid them in cash? If so, he can forget it.

[Snaggletooth]

Deduct It

Gman, I would deduct it, as long as there is documentation. If some of these guys received less than $600, then they simply don't get 1099s. This doesn't mean the money wasn't paid to them or that their labor is not a valid deduction.

My father in Tennessee had this happen. In the small community where I grew up, there was only one store for miles around. The storeowner extended credit, and everyone in half the county owed him money. When we needed help in hay and tobacco, we worked several people.

At the end of the week, no one wanted a check. The only place to cash a check would be at the local store, and most of these guys kept telling the owner they were broke and couldn't pay the bill they would run up. If they brought in a check, they couldn't pretend they were broke.

He would write checks to various workers for small amounts, so they could avoid the storeowner. At the end of the year, we issued 2 1099s for guys he paid $600 or more, and had over $5000 paid to some 20 farmhands who were paid less. But we DID have a record, and accordingly deducted it.

Don'tcha just love stories from the rural south? I've got dozens more...

[Black Bart]

Gman, I would deduct it, as long as there is documentation. If some of these guys received less than $600, then they simply don't get 1099s. This doesn't mean the money wasn't paid to them or that their labor is not a valid deduction.

Agree.

Don'tcha just love stories from the rural south? I've got dozens more...

Well, yeah; I'm sort of fond of 'em.

[JohnH]

Story from the rural south about cash payments (just to stay on topic):

A sawmill pays its workers each week in cash. So a logger gets his pay envelope from the paymaster, signs for it, and walks away. Suddenly he turns, steps back to the table, and says "My pay is short $10 this week." The paymaster checks his books and replies, "Yes, I overpaid you $10 last week and so I took it out of this week's pay." The logger nods his head & turns to walk away.

As he's leaving, the paymaster calls him back to the table & says "I noticed you didn't put up much of a fuss over the $10, so that makes me think you caught the overpayment last week but didn't say anything about it. So why did you bring it up this week?"

The logger replies, "Well, I'm a forgiving person. I'll allow anybody one mistake, but when they make two in a row I think it needs to be called to their atttention!"