Incorrect SSN on 1099-MISC

[mm0919]

Amount of very small earnings on 1099-MISC is correct, name and address are correct, but SSN is incorrect.  Obviously too late for my client to send in a Corrected form.

Would appreciate very much your advice on how to address  this on the tax return. A lot of incorrect 1099-MISC information online, but mostly all about wrong amounts reported.

For various unfortunate situations during the year, filing tax returns had to be put off for last minute,

Thank you for your kind assistance.

[taz157]

A corrected 1099 can be sent to the IRS by the customer and the customer is supposed to put the income s/he received on his/her tax return even if s/he didn't receive a 1099.

[mm0919]

Thanks so much TAZ,

Received 1099-MISC.  So it must mean that customer filed it with the IRS by Feb 29, 2016.  Can the customer still send a corrected 1099 at this time?  Will that involve a penalty on his end?

Filing tax return tomorrow.  Will the incorrect SSN on the 1099 sent in February to the IRS trigger an audit on tax return?

Truly appreciate your kind assistance.  Thanks again. 

[taz157]

I can only assume it was provided on time, but that the customer doesn't have to worry about it.  The vendor can provide a correct 1099 at anytime without being subject to a penalty.

For audit risk, I would guess very slim unless the vendor is in the habit of filing incorrect SSNs or EINs on the customers' 1099s.

[mm0919]

Thanks so very much!

Will ask for a corrected 1099 - so far, have not been able to connect with him.
By the way - does the return need to include a statement about the 1099 incorrect SSN?

[taz157]

Nope.  As long as you have reported the income you've received on your tax return (regardless of the 1099 but must be at least what the 1099 says (regardless of the incorrect SSN)), then you are good.  If the 1099 had more income than actually received, try to the get the vendor to correct it, but you can also put what the 1099 says, then have an expense for the difference with timing difference, cash not received, etc. on it.

Keep in mind, there could be timing difference as the vendor may have paid the bill in 2015, but the customer didn't receive the check until 2016 (therefore, 2015 expense for the vendor and 2016 income to the customer) and that's okay. Just keep good notes if ever questioned by the IRS. Next summer, the IRS will sent out notices with differences if what's reported on your tax return is different than what's been received by them via third parties.

[mm0919]

Thanks ever so much Taz!

You've really made my day!

[mm0919]

Good morning Taz,

Just curious -  you said IRS will send out notices next summer if there are differences in what is on the tax return and what is received by them.  That would be differences in amounts reported - right?  And the notices would go to both payer and payee?

Some articles in the web suggest that there are 1099-MISC that are submitted to the IRS by payers where the amount is larger than what was actually paid. In such a case, would not the IRS audit the taxpayer for supposedly under-reported income? This would mean then that the taxpayer now has the  responsibility to prove to the IRS that the amount on the 1099-MISC that is on IRS records is not correct?

If above is correct, perhaps good idea to ask that a Corrected 1099 be submitted - juuust in case, the amount reported was incorrect also.

Thanks so very much again... and have a good day/week.

[taz157]

The notice only goes to the payee, not the payer.  The notice would have a column for the 3rd party remitted info, and then a column for what's reported (if what was received is higher than what's reported).  The difference would be taxable income to the payee and the notice would reflect an amount with interest and penalties.  If you can provide that the amount reported is correct, then the IRS will adjust their records.  Note, you won't necessarily get audited due to the difference, but you will get a notice about the difference as explained previously.

If you report more the tax return than what the 3rd party remitted, then you won't receive a notice.

Next time this happens, don't wait until the last minute, and talk with the payee as soon as you receive the 1099 and report the issues with them.  It's easier to fix as soon as it was sent to you versus months later.

[mm0919]

Very unusual for me to not be more timely. 
For various unfortunate situations during the year,  many high-priority tasks including tax-related issues had to be put off for last minute.

Again, many thanks!