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RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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I am a physician. I was emloyed by a clinic in 2005. In ...

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I am a physician. I was emloyed by a clinic in 2005. In 2005 the clinic asked me to sign an agreement with a local hospital so that hospital would provide money for me. However this money I have not received. All the money in the form of checks went directly to the clinic. I even never seen the checks or endorsed nor signed them. Now 2 years later the IRS sent me a letter asking me for the taxes on this money. Apparently the hospital sent them 1099. I personaly did not receive this 1099 from the hospital. Again because it went to the clinic and they did not give it to me. I called the clinic where I used to work and asked them to pay the tax since they are the ones who took the checks. They do not want to answer me. I even sent them certified letter and got no answer from them. I also contacted the hospital and informed them about the whole situation. I asked them to check with their bank about where the checks went. Again they did not answer me. What is your advice to me please.
Submitted: 6 years ago.
Category: Tax
Expert:  RD replied 6 years ago.

How were you paid for the services all this time?

 

Customer: replied 6 years ago.
Monthly checks. And taxes were paid directly from my salary befor I receive it from my employer. At the end of the year I got a W2 form.
Expert:  RD replied 6 years ago.

In that case, you are not required to pay tax on the Form 1099 income that you never received. Form 1099 Misc income will be taxable to you only if you received it presuming that you are a tax basis taxpayer.

You received W-2 from the employer and that has been reported by you on the tax return.

Did you receive a Form 1099 from any of the payors....but the amounts reported on the Form 1099 were received by the hospital on your behalf? How was the clinic organized? were you a partner or a stockholder of the clinic?

 

Customer: replied 6 years ago.
I was employed by the clinic. I did not receive 1099 from anyone. The money was sent from the hospital directly to the address of the clinic where I worked. The money was in the form of checks with my name. However the clinic just directly took the checks and deposited them for their account.
But how can I proof this to the IRS?    the 1099 from the hospital was put on my name. I did not receive this 1099 because it was sent to the address of the clinic where I was working. And the clinic did not give the 1099 to me.

Thank you
Expert:  RD replied 6 years ago.

You will have to request the information from the hospital regarding the bank account where the checks were cleared. Also, you will have to contact the Clinic and inform them regarding the IRS issues that you are having. This 1099 income would have been recorded in the Clinic's tax return. DO you have the EIN# XXXXX the Clinic and information on how the clinic was organized(S Corp, partnership or so on).

I will also suggest you to amend the tax return and report this Form 1099 income on Sch C and than record the entire amount as a deduction on Other expenses column on Sch C and write a note that these amounts were received and deposited by the Clinic and should be on Clinic's tax return. This will cause your tax return to match to the information that IRS has and also will not increase your tax liability.

 

Let me know if you have any question. Bonus and Feedback will be highly appreciated!!!

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

 

Customer: replied 6 years ago.
((You will have to request the information from the hospital regarding the bank account where the checks were cleared. Also, you will have to contact the Clinic and inform them regarding the IRS issues that you are having))!!

I already said in my first post. I cntacted the clinic and the hospital many times even with certified mail. They do not answer me. I asked the hospital to look at the checks were they were cleared, but they dont want to do that! now what can I do? This is my question! is what to do from here.

Thank you
Expert:  RD replied 6 years ago.

Do you have the EIN# XXXXX the clinic?

I had also included in the post that you may want to amend your tax return and report the Form 1099 income on Sch C and write it off as an expense with teh EIN# XXXXX the clinic from where you received your Form W-2.

IRS may not accept this but it will establish your position that you did not receive it and that as per the contract that you had signed with the hospital, these monies were received by the clinic and you were give a W-2 from the clinic.

You may also need to contact a tax advocate and try to seek their help in resolving this issue. link to the tax advocate-

http://www.irs.gov/advocate/article/0,,id=97395,00.html

 

Let me know if you have any question. Bonus and Feedback will be highly appreciated!!!

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

 

 

RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience: CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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