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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 own a contracting company that performs rehab for residental

Resolved Question:

I own a contracting company that performs rehab for residental properties. It has come to my attention that I have been paying illegal aliens via business check.

My question is strictly tax -Do I not write the expense off as they do not have a legal
SSN (the ones provided on the W-9 form are false) nor do they have a company.
Submitted: 6 years ago.
Category: Tax
Expert:  RD replied 6 years ago.
You can write the expense off against your income.

You will have an issue in reporting these payments to the IRS. IRS requires you to issue FOrm 1099 MISC to contractors for payments made to them - if you paid them $600 or more in a year.
Since you do not have valid SS# XXXXX cannot issue one to them.

If IRS finds out, you may be required to pay the tax on such payments.

For future- you need to ensure that the SS# XXXXX valid. You can verify the SS# XXXXX W-9 with the IRS to be safe.

Let me know if you have any question.

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.

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