"I started a job some time ago, than the boss 1099'ed me. She told me to start a business which I did, but she's pays me by my personal name not my business name.

Why aren't you a W-2 employee?
<a rel="nofollow" target="_blank" href="https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee">https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee</a>

I was at first, than she (the boss) decided to 1099 a few of us and told us if we wanted to keep the job and get paid we had to do this. So me in my ignorance did so w/o really knowing all the consequences. Than I get this letter from the IRS.

You gotta understand one thing, before I got this job I was on unemployment because a company I worked for for 22 yrs let me go because of "downsizing." Plus my father (to whom I was very close to) died. Than my daughter (who was also close to my father) went into a deep depression, etc. So I've been a basket case ever since and now this.

Sounds like the IRS is questioning whether you should have been classified as an employee or not.  By her 1099ing you, she avoids her share of payroll taxes, state unemployment, workmans compensation, etc., that's a big issue for IRS.

Answer the letter honestly, you haven't done anything wrong.

I'm scared to death the IRS is gonna take my house, drain my bank account, etc.

I already to the letter to a lawyer who then told me since I hadn't filed as a business in the past couple of yrs that I could go to jail.

Should I file under my business name and should she be paying me under that name as well?

I found out a couple of other people (before I started working there) they were 1099'ed , but not expected to be a business. Then the boss made everyone (including me) create a business. Several of them also received this letter.

Several months passed since I gave this attorney the letter and a thousand dollars (which I really can't afford to do) and nothing has been done.

Than about a week ago I received another (identical) letter asking the same things.

"...anything else without your having a chance to make the corrections."

Do you mean I have to file under the business name, while she's not paying in my business name.

I was issued an EIN when I created the business, but my 1099 has my regular SS # and my personal name ONLY. I've never been paid in my business name.

Again ... what did you choose on the SS4?

"...anything else without your having a chance to make the corrections."

By corrections do you mean I have to file under the business name, while she's not paying in my business name.

I know today is a sunday and you'd rather be spending time doing something else, but if you could answer this one more question I'd really appreciate it.

STOP ... First answer these questions ...

1) What entity did you choose on the SS4 form 9a?  <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/fss4.pdf">https://www.irs.gov/pub/irs-pdf/fss4.pdf</a>

2) Have you been reporting this income on your return at all?  And if you did was it on a Sch C ?

Ok ... so you said below that the EIN is for a sole prop & you have been filing the Sch C so life is good for you.

"If you filed the 1099 as Self Employment income (Box 7 of the 1099-MISC, and filed on Schedule C of your tax return), it does NOT matter if it is under your Business name or your personal name.  For tax purposes, it is the same thing.

So DON'T worry about if it was in the "business" name or your "personal" name.  It does NOT matter."


Everyone who's helped with this, please accept my deepest appreciation. You've lifted a very heavy weight off my shoulders.

Thank you very much and enjoy T-day or whatever you do/don't celebrate.

Shal'aam Aleichem
         Betty

Stop panicking ... if you have been reporting the 1099 income on a Sch C then you have nothing to worry about.  But you did say that you and some others were involuntarily switched from employees to sub contractors for doing the exact same job which is illegal on the part of the employer not you.  Sounds like someone else turned in the employer but refusing to just accept the employer's BS and not you are being asked to honestly answer some questions to determine if the employer is in trouble NOT YOU. 

The IRS will not put you in jail or anything else without your having a chance to make the corrections. 

Now you said "create a business" a couple of times ... so did you actually get an EIN in the name of a business ?   Did you file the SS-4 and what box did you check on line 9a?  <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/fss4.pdf">https://www.irs.gov/pub/irs-pdf/fss4.pdf</a>

I agree with Critter.  If you have been filing your tax return "as your own business", the only only thing that MIGHT happen is that the IRS changes you to an Employee, which means you would pay LESS tax than 'being in business'.

No I didn't because, my 1099 kept only arriving with my person name and SS# on it. So that's how I kept filing.

My personal name. sorry

If you filed the 1099 as Self Employment income (Box 7 of the 1099-MISC, and filed on Schedule C of your tax return), it does NOT matter if it is under your Business name or your personal name.  For tax purposes, it is the same thing.

So DON'T worry about if it was in the "business" name or your "personal" name.  It does NOT matter.

My boss has never paid me using the EIN. An accountant set my business up for me as a sole proprietor.

I'm currently looking for another job.

Wise choice ... however you could amend the prior year returns to report that employer and get them to pay 1/2 of your SE taxes ... but I would use a paid professional so it is done correctly.