Posted by twil4_WI on 2/4/12 9:32am
Msg #410853

wrong inflated amount on 1099

I am just wondering if this happens to other folks. I just got a 1099 from a large title company that is inflated well over $700! In past years I have received 1099's that were inflated by a few hundred which annoyed me, but this much I cant just ignore. I will call them Monday, but have found in the past it is a time consuming PIA, and the burden of proof seems to be my problem, as they arent interested in fixing it.There is no possibilty of me forgetting to journal it, and I have a 3 checkpoint accounting system, so I know its their error. I havent found this subject on the search button, so I thought I would put it out there. I cant be the only one this happens to. It is very irritating.

Reply by ikando on 2/4/12 9:45am
Msg #410854

I'm sure some of the posters to this board who are tax savvy will comment, but I asked my Enrolled Agent husband his opinion of this problem.

His suggestions are: First, contact the company who issued the 1099 asking them to provide the check numbers and dates issued of the checks which may have caused the overstated amount. The reason: if they issued the checks in one year, but you did not "constructively receive" them until the next year, both of you are correct as far as bookkeeping. But be aware that if you received them in 2011, but did not book them until 2012, you will be hard pressed to fight the problem.

Second, if the end of the year is not the issue, you might contact the IRS to report a potential fraud. The company is inflating their expenses to avoid taxes, but throwing them on you to be paid. Be aware that this time of the year you'll probably spend an hour minimum on hold to actually speak with someone.

Since you've stated that you keep excellent records, I know you'll keep copies of all correspondence about the problem should it move up the legal ladder.

Good luck.

Reply by twil4_WI on 2/4/12 10:10am
Msg #410857

Yes, I count the ones I performed in 2010 that I wasnt paid for until 2011. On the flip side, I do not count the invoices performed in Dec 11, that were not paid for until 2012. It appears to me that they include them all, even though they hadnt paid me yet, which would be different that what they have done in previous years.

Reply by Bee_CA on 2/4/12 10:22am
Msg #410859

I have found with signing services that they will clear their books at the end of the year, December 30th or 31st. I don't receive that check until the next year, but it's included in their 1099 because they cut the check in that tax year. I make the adjustment in my dates and it usually matches.

Reply by CopperheadVA on 2/4/12 11:06am
Msg #410865

Not only that, but some companies will date the check for sometime in Dec, but hold the check and not mail it until WELL INTO January (proven by postmark), so of course you would not receive it until the second half of January. Actually, they probably don't even hold the check but just backdate it to December.

Reply by pat/WA on 2/4/12 11:35am
Msg #410867

This has happened to me. It is over by $400.00. It would be interesting to know if the check was drawn by the same company

Reply by John Tennant on 2/4/12 9:49pm
Msg #410906

Your husband is "right on".

Usual problems is "cash" vs "accural" basis. You are on cash, they are on accural. Or vise versa.

Reply by mwm143 on 2/6/12 10:13am
Msg #411011

Did you consider 2010 closings that were paid in 2011? n/m

Reply by Carolyn Bodley on 2/4/12 4:58pm
Msg #410892

Cash or accural basis

Cash = income not counted until payment received and expenses not counted until paid;

Accural = income counted when work performed and expenses counted when purchased

Reply by Carolyn Bodley on 2/4/12 5:11pm
Msg #410895

Re: oops - accrual n/m

Reply by jojo_MN on 2/4/12 11:44pm
Msg #410914

I received a 1099-misc from a national company showing that they paid me $2220.00 in 2011.

If I add all of the business I did for them in 2011 (paid and not paid) it is only $1145.00. That is over $1,000 difference. If you take away the amount not paid for it is only $580. If I add all money that was received in 2011 (which includes a few closings performed in 2010) it adds up to $880.

I talked to someone in accounting and they said lots of people got wrong ones but they will get corrected ones soon. I said "is the correct one going to be sent to the IRS?" He said "of course". I think the IRS is going to get a copy of both of the ones they sent from me. I'm furious with their scheming. Always sending checks back-dated to the previous year. I got checks in April of 2011 back-dated to December 25 of 2010.