What do I do if I received a 1099-MISC for money I never received?

[xtaylorbelle]

I received a 1099-MISC in late 2017 last year for money I supposedly received in 2016. My father passed away in 2015 and the company that he worked for sent me a 1099-MISC for just over $6000 in 2016. I'm not exactly sure what to make of this as #1 I never received any money from his company and #2 I received it well after tax season was over. I honestly forgot about it until this new tax season. I am obviously going to call the company that sent it to me as soon as possible, but am wondering what would cause something like this to happen? Has this ever happened before? What am I supposed to do about this? Is it taxable? When I look up my transcript on the IRS website it is there even though I didn't file it. 

[ToddL · Accepted solution]

You will have to call the company to see why they sent it to you; there are many possible reasons, including that it was a mistake.

Amounts reported on a Form 1099-MISC are considered taxable income. If it is showing up on your IRS transcript, you will need to deal with it no matter why it was sent to you. 

What to do?

• If you never received the payment reported to you on a Form 1099-MISC, do not report it on your tax return.
• Contact the issuer and get an explanation for why they reported the 1099-MISC income (get names and keep notes).
• If the amount reported is large, you should follow up the phone call by writing the company to dispute the validity of the 1099-MISC. Send the letter with proof of mailing and proof of delivery.)

Unless the matter is explained and resolved to your satisfaction, you should not report that 1099-MISC on your tax return. If and when the IRS contacts you for an explanation of why you did not report it, you can provide them with the information you have that proves it was an invalid 1099-MISC.

[xtaylorbelle]

Thanks for you response! That was very helpful. So I contacted the company and turns out it was in fact not a mistake, but they sent the check to an old address of mine so I never received the money. They reissued the check and I received it this month and deposited it. They said they won't issue a new 1099, so the 1099 will be for 2016. So do I pay taxes on it next season when I file my taxes for this year, or do I need to amend the old return? The date of the check is from this month.

[ToddL]

The important issue is the year for the 1099-MISC.

If this is a 2017 Form 1099-MISC, file it with your 2017 tax return. 

If this is a 2016 Form 1099-MISC, you may just want to wait until the IRS sends you a notice. 

If you don't report a 2016 (or 2017) 1099-MISC, the IRS may send you a Notice of Proposed Tax Increase later this year - it will depend on the amount of the payment. The same process is usually followed by states.

It isn't an audit, but a proposed bill for the tax on that 1099-MISC income, plus any interest or penalties. They do all the calculations and provide a payment voucher if you agree to the change. You don't need to amend your return, you would just have to pay the proposed increase in tax.

(If the 1099-MISC was an expense reimbursement, see: 1099-MISC for Expense Reimbursement)

[TDeaquino]

I have an additional question on this?  (Assume below that all items were included in a 1099 as December).  I have a check that is dated 12/30 and is postmarked on the envelope as 1/2.  That’s an easy one.  But I have 2 other checks that were dated 12/21 and 12/24 and postmarked 12/22 and 12/26 respectively.  And I still did not receive these checks until 1/2.  in this situation, I have no physical proof that I did not receive these checks in the year of December. Do I have no choice but to recognize these as December payments?  

[AbrahamT]

You would recognize them as December payments. 

1099's are issued based on when the income occured, not  when it was actually received. 

Since these checks were dated on 12/1 and 12/24 respectively, then they most likely occurred in the previous year and thus they were correctly included on the 1099MISC from the previous year. 

That's the year that you report this income.