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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29932
Experience:  Taxes, Immigration, Labor Relations
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I was levied a penalty on my pension through the state while

Customer Question

I was levied a penalty on my pension through the state while working 9 hrs after a disability retirement. The fire district where I worked never bothered find out if my job qualified for state enrollment in pers. I resigned my position when I learned of the penalty & sued the fire district. Through negotiations they paid have back which was a $14500. settlement. Naturally this was money I had already made & taxes were previously paid on this. The state is deducting $300 per month for 10 years from my pension to pay back $30,000 which I earned working there for 8 years. Now the problem: I just received a 1099 from Fire District for the 14500. Misc box is checked which is fine but in box 9 it states payer made direct sales of 5K or more of consumer products to a buyer (recipient)for resale. Is that Fraud Reporting of earnings?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Fraud is deception by misrepresentation of material facts, or silence when good faith requires expression, which results in material damage to one who relies on it and has the right to rely on it. Simply stated, it is obtaining something of value from someone else through deceit.

Tax fraud is often defined as an intentional wrongdoing, on the part of a taxpayer, with the specific purpose of evading a tax known or believed to be owing. Tax fraud requires both:

  • a tax due and owing; and

  • fraudulent intent.

So far - based on your information - I do not see any fraud here - may be just a simple mistake?