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I am a gold buyer ( Pawn Shop owner) in Vermont . From whom

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I have purchased small amounts...
I am a gold buyer ( Pawn Shop owner) in Vermont . From whom I have purchased small amounts of gold from but many many times all told totaling many thousands of dollars. Is there anyway of 1099 this individual or should I legally be doing so?? At this point I pay him weekly if not daily and in check form in most cases. Please let me know, thanks kindly.
Submitted: 5 years ago.Category: Tax
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12/2/2011
Tax Professional: USTaxAdvising, CPA replied 5 years ago
USTaxAdvising
Category: Tax
Satisfied Customers: 1,237
Experience: US Taxation specialist.
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You should be issuing a 1099 to this individual. You can provide hime with a W-9 (see link below) to request his taxpayer identification number and other information which will be required on the Form 1099.

 

http://www.irs.gov/pub/irs-pdf/fw9.pdf

 

If the person refuses to provide the W-9 and taxpayer identification number then you are required to start "backup withholding" immediately. (i.e. a portion of the proceeds you pay him will go to the feds instead) Check out the article here from the IRS website.

http://www.irs.gov/efile/article/0,,id=98145,00.html

 

Hopefully this provides the clarity you were looking for. Let me know if you have any further questions.

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Customer reply replied 5 years ago
I really don't speak to him at this point and I beleive it will be fairly hard for me to obtain his information . Iam in a position where I have already paid him by check many times but was unable to obtain his information . AT this point I am finished in any manner dealing with this individual and he will not return my phone calls or make contact with me. Where does this leave me as far as direction and approach during this tax year?
Tax Professional: USTaxAdvising, CPA replied 5 years ago

You should try and document that you have requested a W-9 from the vendor. This could be done via a fax confirmation or registered mail receipt. Once that is done, and you have no future business with him to perform back up withholding on, it is between him and the IRS.

 

Basically what the IRS is doing is trying to ensure that everyone reports their income. If you pay him more than $600 in a year you should issue him a 1099. This 1099 also gets reported to the IRS. They will then ensure that he declares the $600 on his tax return.

 

If you are audited the IRS can disallow your expenses paid to him if you did not issue the 1099.

 

Hopefully this helps, let me know if you have any further questions.

 

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Tax Professional: USTaxAdvising, CPA replied 5 years ago
Hopefully this helps, let me know if you have any further questions.
Ask Your Own Tax Question
Tax Professional: USTaxAdvising, CPA replied 5 years ago
Hopefully this helps, let me know if you have any further questions.

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Tax Professional: USTaxAdvising, CPA replied 5 years ago
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