1099-MISC: Right amount, wrong status, no tax fraud — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
  • LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

1099-MISC: Right amount, wrong status, no tax fraud

Get PDF file

by on
in Office Management,Payroll Management

Can an individual, not the IRS, sue you for tax fraud because you provided a Form 1099-MISC, instead of a W-2? In other words, can you be sued by someone you misclassified as an independent contractor?

It depends, according to a federal trial court, which concluded that the answer is no, but only if the amount reported on the 1099-MISC was accurate. (Liverett v. Tores Advanced Enterprise Solutions, LLC, No. 1:16-cv-00339, D.C. E.Va., 2016)

That’s what Congress wrote, but what does it mean? The relevant section of the tax code—Section 7434—is entitled: Civil damages for fraudulent filing of information returns. Subsection (a) allows individuals who receive Forms 1099-MISC to sue a payer “with respect to payments purported to be made to any other person.”

An individual sued his government contractor employer after receiving a Form 1099-MISC, instead of a W-2. Crux of his claim: The employer schemed to misclassify its workers a...(register to read more)

To read the rest of this article you must first register with your email address.

Email Address:

Leave a Comment

Previous post:

Next post: