What to do if there's Form 1099 discrepancies?
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income figures you reported on your tax return with tax figures
supplied on IRS tax form 1099's filed by your employer, broker, financial institution,
and others who paid you taxable income. A discrepancy may result in a bill for the unpaid
tax, interest, and a penalty tax of 20%. If you receive such a tax notice from the IRS claiming a
discrepancy on your tax return you should be sure to check the accuracy of the
tax information
before paying the IRS any tax. It's possible that one of the IRS tax form 1099's
filed with the
IRS was inaccurate, that the right income was reported by you in an incorrect manner on
the tax return, or that the IRS made an error. You should promptly respond in writing
regardless of who is responsible for the tax error. If the correct amount of taxable income
has been reported, provide copies of the necessary documentation to support your
tax case. If
you failed to report taxable income you should pay the IRS the tax that you owe.
You may be able to get the IRS to drop the 20%
tax penalty if you can show that your
mistake was an honest error. Send the IRS a check for payment of the tax and interest
along with a letter explaining how the tax mistake was made and a request to eliminate the 20%
tax penalty.
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Related tax
information about Form 1099 discrepancies |
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How to avoid an IRS audit?
How to prepare for an IRS audit?
What are my appeal rights?
What are the tax penalties and interest? Can they be
avoided?
How does the Statute of Limitations affect income tax
obligations?
How does the Bankruptcy Code affect income tax obligations?
Taxpayer Bill of Rights
Tax Audits, Tax Collections and trouble with the IRS |
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IRS publications about
Form 1099 Discrepancies:
For further information on the appeals process, refer to Tax
Topic 151, Your Appeal Rights. Also see IRS Publication 1, Your Rights as a
Taxpayer, IRS Publication 5, Appeal
Rights, IRS Publication 556, Examination
of Returns, Appeal Rights.., and IRS Publication 17, Your Federal
Income Tax. |
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IRS Links:
IRS
Appeals
IRS Problem
Resolution Office
IRS
Taxpayer Advocate |
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Ask Julian Block your IRS and tax questions! |
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If you can't find the answer to your IRS or tax question in our
web you can call former IRS Special Agent and one of the country's foremost tax attorneys, nationally syndicated columnist ("The Tax
Adviser") Julian Block. Julian is also the tax Editor of Mutual Funds Magazine, America's premier investment magazine. To
call Julian for a tax consultation click
here. |
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