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Posted by Harlan Lunsford on November 7, 2006, 8:19 am
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Howard wrote:
> [...]
>> Yes, there is a penalty for late filing of 1099's. Up until
>> THIS year, this really wasn't a problem. Ive never heard of
>> penalties being assessed before year 2005. However since
>> then I've heard of a couple of cases where IRS is taking a
>> hard line.
>>
>> I know how this may sound, and I'm not advising either way
>> (!!) but if you don't file even now, how will they miss it?
>> There's no cross check with the payee anyway. So only in
>> case of audit of your business return (since 1099's aren't
>> used with personal transactions) would IRS have a chance to
>> notice. And even then, ....... (grin)
> Schedule C, line 11 is where contractor expenses are
> entered. Shouldn't the amount entered be the sum of the
> amounts reported on forms 1099-MISC except for those
> contractors who don't meet the minimum ($600 I think)? I
> would think that it would be easy for the IRS to reconcile
> line 11 with amounts reported on forms 1099-misc and flag
> those with a large discrepancy. Perhaps I don't understand
> the situation with the forgotten 1099.
That so called 'contract labor line is IRS's attempt to try
to force 1099 reporting; not that that's bad of course. But
no, they could never match it up because it's just for
labor, and as we know 1099's are issued for other
situations, e.g. rent, and to individuals furnishing both
materials and labor. Some 1099's may be issued to
repairmen, in which case the expense is included in that
category.
Also 1099's are issued to contractors whose services may be
properly attributable to Cost of Goods sold on page 2.
No size fits all I guess.
ChEAr$,
Harlan Lunsford, EA n LA
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