Is this LEGAL - got a 1099Misc for (my) employee cost share as income for free legal services benefit(?) provided by Auto companies / UAW but I didn't use any services?

[teaparty666]

Got a 1099-misc for assigned share of cost for so-called free legal benefits services provided by the collective Auto Mfrs (Ford, GM, Chrysler) and the UAW. Only used by a few of entire employees eligible but then all employees are assumed to have received income compensation by dividing up the total cost of used services  against all eligible employees that could potentially use the legal service. 

Is this LEGAL? 

[Rainman12]

What did your UAW rep say when you asked them? They're responsible for compensation terms.

[teaparty666]

LOL, their responsible for ALL sorts of contract terms but KNOW very little - only get 3 partial days of class on the national contract and the local contract. Tax issues aren't addressed apart from knowing some legal services are available to UAW members. Have a letter indicating that all members, even if don't use a service provided, are responsible for sharing (as income) the years cost for those that used the FREE (HA, HA) service. Just because they say it doesn't mean it's legal to apply it but can't reach anyone at IRS (even after a calendar year tax season ends in April).

[Zbucklyo]

My guess is that it is legal.  First, an organization as large as the UAW would almost certainly check with their own tax advisors before issuing a 1099-misc.  Second, there are are precedents elsewhere.  For example, employer--provided life insurance (for free) can be considered taxable compensation even if provided for "free" and not used.

[Rainman12]

Another common example of 1099-MISC to employees: Use of a company car. If the 'benefit' is in Box 3 of the 1099-MISC, should be no problem in reporting as "Other Income" (Line 21 of Form 1040).

[teaparty666]

I understand the MISC for use of a company car as a income benefit - as a employee if the company provides you with a car that you solely are given control and access/use of the car.  But would this apply to all the other employees to get a pro-rated MISC if the car was declared as available for ALL the employees to use and yet only a few of the employees actually made use of the car.  Seems like it would have to be offered as an opt-in option as others may not want or need the benefit and get dinged for the benefit as income.  

Here in my situation, with the Big 3 Auto companies providing the money to the UAW to provide the FREE benefit to its members, it may be something the Big 3's bean-counters INTERPRETED as a income benefit.  I believe they've screwed up (on PURPOSE!) and are trying to classify it as a taxable benefit in order to write some or all of their cost off in their taxes.  This Free legal service used to be available until they cancelled it a few years ago and just recently reinstated it in 2017 or 2016.  I had used the FREE service once, back in 2015 and did not receive a MISC for the FREE legal service provided then.