themagicoen
Member since Feb-5-06
226 posts
2 feedbacks
2 points "Ethics question"
Feb-18-07, 10:27 AM (EST)
Hi! I drove for a owner from Jan 06 to Jul 06 and the truck grossed about $70,000, I as a contractor got about $40,000 of that. The owner and I had a dispute and he still owes me $7,000. Last week i got my 1099 from him, he only put on there that he paid me around $7,000 then I get another one today for another $8,000. Should I just file the $15,000 and let him pay on the other $25,000? I paid fuel and other expenses totaling around 18-19k so I can easily write off the 15k and not pay anything. I already told my sub contractors to throw away the 1099's I gave them as they wanted to get their taxes done. What should I do? Thanks.
Crazynuff
Member since May-8-04
699 posts
7 feedbacks
14 points 1. "RE: Ethics question"
Feb-25-07, 08:29 AM (EST)
In response to message #0
Boy you're opening a real can of worms here . Your contractor probably understated your 1099 income because he didn't report some of the income you made . Do you really think the IRS will accept your claim your fuel expense was more than your income ? The IRS will nail the contractor , then you , then your subcontractors . Let your subcontractors do their taxes with PROPER 1099's . Any other option puts you facing Federal charges . Call your contractor and demand a proper 1099 advising them you will go to IRS with settlement sheets if they don't comply . Somebody's looking at jail time here . Better play it straight on this one .
Crazynuff
He's not opening up a can of worms yet. He will if he reports it and doesn't refile thoughs 1099's for his contractors, and what will happen is this,
Magiceon should report the full amount that he claims that he actually receives from his Contractor an reports what he should of received on the 1099 to the IRS. Plus resend out the 1099 MISC to his subcontractor also, They if they already filed will have to AMEND there Returns, once recieved, iF they amend them prior to April 17, and mail them in with the tax owed they should not have to pay any interest or penalties. Magiceon has until Feb 28 to file the 1099MISC that he makes out without penalty, if he does it later he will pay a small penalty like 2% of the total that he reports to his contractors.
He should fill out a Federal Form called 3949-A. REFERRAL INFORMATION on the contractor he was leased to, if you do not know all the information just give them the business name,address and phone # and check the boxes that you allege he is not reporting, The IRS will investigate him and he will be penalized heavily. This form is a form that will have the IRS investigate the so called taxpayer whos underreporting or not supplying the correct income that he is making, There are a bunch of BAD owners out there that do this and ruin it for the rest.
It seems that there are a number of drivers, and other contractors that have not received 1099 MISC or not reporting the 1099's that they recieve, I suggest that they include them in there return, the reason is simple, the IRS will GET YOU. IF you feel that you do not have to report the income that is your business, but later down the line the IRS will come on you. YOU WILL NOT GO TO JAIL AS EVERYONE THINKS. they will just bill you for the tax owed on the information that they recieved from the 1099's then you will have to prove the expense, and why you did not file it. with large penalties. about 25% of the tax owed is around what it will be.
Magiceon, Good luck, but report and send out those 1099's that you told your contractors to destroy. you are only putting off the tax burden for all. Sop send them out ASAP like today and tell them you are sending them due to changes in circumstances.
Frank
