Discussion:SMLLC will not receive 1099
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Discussion Forum Index --> Tax Questions --> SMLLC will not receive 1099
| 12 October 2007 | |
| sorry...I hit enter by accident.
Client is in second year of business. Yr 1 was startup expenses only, no income. Client is formed as an LLC. He has two contracts and is billing under his LLC name. All checks are deposited into business account with LLC name. He has made timely estimated tax payments to cover his SE tax and income tax. My question. When he was inquiring about year end 1099 he was informed that since he was in a corp to corp contract they will not issue a 1099. I asked him if he filed a w-9 with them and what boxes he checked, but he isn't sure. So assuming he checked the box as an LLC corporation and not a disregarded entity (as i have been treating him all year) what ramifications are we looking at? My initial thought is that we report all income on the Schedule C has planned and not worry about a 1099. We are reporting the income, the IRS is only going to be alerted if a 1099 was issued and not reported, correct? Thanks in advance. Marcy | |
| 12 October 2007 | |
| The bank?? I'm not implying that we are going to try and hide income. I'm concerned if there are any ramifications of not receiving a 1099? We are going to be filing a schedule c with income and NO 1099's. | |
TheTinCook (talk|edits) said: | 12 October 2007 |
| As long as your client reports all his income, there are no ramifications. You might get a CP2000 notice if the company decides to file the 1099's but that's no problem if you already included the income.
I'm wondering a little if your client filed a 8832. | |
| 12 October 2007 | |
| I'm wondering that too TinCook. So lets assume he did ( I didn't ask the question because I was the first accountant and this guy was pretty clueless as to tax issues) and we have not done payroll deposits all year. Now what?
At the end of the day he is probably covered with his estimated taxes he has made quarterly. Probably a bite for FUTA and failure to file the 940/941 timely. Any advice on how to handle this? | |
| 12 October 2007 | |
| "The bank will tell the IRS."
A bank cannot legally tell IRS squat. They can the FBI if they suspect crime and over $25,000 in one transaction, from memory as to $$, but FBI can't tell IRS squat absent a Grand Jury. Exception an actual IRS audit, and application of 26 USC 7609 re admin summons. | |
TheTinCook (talk|edits) said: | 12 October 2007 |
| I dunno TxSrv, what about Form 8300? Edit: I meant FINCEN Form 104 Here is how it is used by the Feds and the IRS.
I think you can find out if the 8832 has been filed from the record of account, but I am not certain. Never had to do that before. As for correcting the employment taxes. You can't recoup the estimated tax payments until you file the return for the year in question. Assuming we are talking about 2007, If your client is the only employee you can deposit the FUTA when you file the 940 with no problem. (Since FUTA liability less then 500 carries over to the next quarter. Max FUTA for one employee for 2007 is $378) You're own your own for SUTA. Also you might not qualify for the reduced FUTA rate. As far as FICA goes, you can just file the 941c with the next 941 due to correct the liability and deposit the required taxes. Some of the posters here, just report the wages on Sch C and pay the SE tax. | |
| 12 October 2007 | |
| That bank reportin' form is for cash or any suspicious transaction. The statute just about says they're to see evidence of a crime. Just what would that be if depositing a really big check? I think we can also assume a bank will not turn its customers into the feds unless they really have to by law. As I'm finding out administering an estate, they are really fussy over privacy (complicated by the Patriot Act) these days. | |
Outwesttax (talk|edits) said: | 12 October 2007 |
| Let's cut to the chase:
As long as the client reports more gross income than whatever 1099s are issued, the IRS is done with 1099 matching for your client. Your client has no responsibility to police his customers for 1099s that should be issued. That is their problem, not yours. Next! | |
| 12 October 2007 | |
| If client actually had noted the entity was a corporation, it would have sent FTD coupons and Form 941 during the year.
But rather than guessing, why not call the Business and Specialty Tax Help Line at 1-800-829-4933? | |
