Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

I represent a US Corporation (C Corp) which does business in…

I represent a US Corporation...
I represent a US Corporation (C Corp) which does business in Florida. We hired a contractor for a monthly fee of $3,000. Independent Contract Agreement signed between US Corporation and Contractor. Services where rendered in Florida. The US Corp has not intention to deduct this expense for the reason given below: As per the Contractor request, payments were processed in the following manner: - Payment was made by one of our related parties outside USA (OFFCO); that is a company that is not domiciled in USA, and does not dov business in USA. OFFCO has a Bank Account in a US Bank (For Bank and FATCA Purposes it is categorized as an Active NFFA; relevant W8 and other information is held by the bank and may be provided upon request). - We paid the contractor via check from OFFCO Account. Checks where on the name of a third party/Contractor’s relative (non US resident for immigration and tax purposes). Our questions: 1. Do OFFCO is subject to file form 1099-Misc? (the company does not even have an EIN number and does not need to obtain one for any purpose). Does the obligation fall fo US Corporation instead? Considering the independent contractor agreement signed? 2. Does OFFCO have to furnish an statement to the contractor? Or US Corp? Or none of them? Thanks in advance.
Show More
Show Less
Ask Your Own Tax Question
Answered in 3 minutes by:
3/21/2018
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 17,610
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified

Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

Ask Your Own Tax Question
Customer reply replied 1 month ago
Thanks a lot.
Customer reply replied 1 month ago
I believed you helped me before.

1. Do OFFCO is subject to file form 1099-Misc? (the company does not even have an EIN number and does not need to obtain one for any purpose). Does the obligation fall fo US Corporation instead? Considering the independent contractor agreement signed?

The form 1099MIS is a US document and used by US entities to report payments made to US persons for payments that are US sourced. The foreign company is not required to issue a 1099MISC. The US company would issue a 1099MISC as they contracted the non employee.

2. Does OFFCO have to furnish an statement to the contractor? Or US Corp? Or none of them? Thanks in advance.

The 1099MISC would be issued to the non employee

Ask Your Own Tax Question

Yes, I did . I wish I had checked on that before I answered here

Ask Your Own Tax Question
Customer reply replied 1 month ago
Why? Is that a problem? I haven’t read your answer. One second

I was not rated on that one from 2016.

Ask Your Own Tax Question
Customer reply replied 1 month ago
Payments were not done to the contractor per se. They were made to a third party relative (her Father who is a non resident). How the US Company shall issue a 1099 Misc if what the company received was an invoice from OFFCO for payments made to the third party relative? Can you guide me from account recording perspective? I believe accountant offset and account payable US Company has with OFFCO by paying subcontractor relative.Summarizing, how US Co were to issue a 1099 Misc to Subcontractor if recipient of the monies was a third party non related to the agreement as per contractor request; that is, checks were issued to her father as per her request.
Customer reply replied 1 month ago
Oh. sorry, how can I fix that? I don't use this much.
Customer reply replied 1 month ago
I think I just did. Is that OK now?

The third party payment does not change the fact that payment was made to the contractor even if they designated a 3rd party to receive it. They cannot transfer compensation in that manner.

For federal income tax purposes, the doctrine of constructive receipt is used to determine when a cash-basis taxpayer has received gross income. A taxpayer is subject to tax in the current year if he or she has unfettered control in determining when items of income will or should be paid.

Ask Your Own Tax Question

26 CFR 1.451-2 - Constructive receipt of income. You authorized another to pay her and she authorized another to receive the income for her.

You are most welcome.
A positive 5 star rating is appreciated so I am credited for assisting. Scroll up to see STARS

Ask Your Own Tax Question

You posted "Oh. sorry, how can I fix that? I don't use this much." You scroll up and click on the stars (1 lowest 5 highest)

Ask Your Own Tax Question
Customer reply replied 1 month ago
Okay. Understood. What if the agreement was signed by OFFCO instead? That is a non us company paying a third party. From what I understood non us companies are not obligated to issued US forms/documents such as 1099-Misc.

A non US company does not issue a US document to a contractor.

Thanks again

Ask Your Own Tax Question

Just checking to see if you responded again.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 17,610
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified
Robin D. and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 1 month ago
Thanks! I believe we covered all!
Was this answer helpful?
Ask Robin D. Your Own Question
Robin D.
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 17,610
17,610 Satisfied Customers
Experience: 15years with H & R Block. Divisional leader, Instructor

Robin D. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,451 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

56 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

17,610 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I am paying an individual as an independent contractor. I
I am paying an individual as an independent contractor. I believe I should withhold and report on the 1099 I send him. How much should I withhold? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
28 form 1040A, "tax" - includes FICA and federal income? Or
https://ttlc.intuit.comline 28 form 1040A, "tax" - includes FICA and federal income? Or just federal income? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,931 satisfied customers
What form to use for my 1099-MISC made 1470.00 work for
what form to use for my 1099-MISC made 1470.00 work for Uncle, also work at my college bookstore made 3256.69 in 2016.Did not file 2016 tax,i did not know. … read more
abci168
abci168
Principal
27 satisfied customers
IRS tax question: If an independent contractor who is a
IRS tax question:If an independent contractor who is a realtor provides meals on premises for other realtors who are also independent contractors can they take the meals and entertainment deduction at… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,064 satisfied customers
Using the 7.5% of gross income for out of pocket medical
using the 7.5% of gross income for out of pocket medical expenses, can I use any part of my assisted living rent? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,931 satisfied customers
I am completing my moms federal income tax forms for 2017.
I am completing my moms federal income tax forms for 2017. Mom (who is 90) purchased a vacant lot in June of 2012 and sold it at a profit of $23,7550 in November of 2017. Moms adjusted gross income fo… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,064 satisfied customers
A Form 1099-MISC was issued to Estate of a deceased person
A Form 1099-MISC was issued to Estate of a deceased person that was an attorney, and reported in Box 14, Gross Proceeds paid to an attorney. How is this reported on the Estate return?… read more
Cole Parker
Cole Parker
Principal/CPA
Bachelor\u0027s Degree
86 satisfied customers
Will the IRS accept a 1099-Misc as compensation as officer
Will the IRS accept a 1099-Misc as compensation as officer on an S-Corp? Client didn't need up getting payroll set up and does not have a W-2. What do I do here?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,931 satisfied customers
If I worked as an independent contractor for a company
Hi if I worked as an independent contractor for a company located overseas and did not receive a 1099 form am I still required to file it on my tax return?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Receive a 1099-MISC for income earned when working for an
Receive a 1099-MISC for income earned when working for an HVAC company. Do I have to pay self-employment tax or can it be filed as income on a 1040 without doing a schedule C or F. It was income only,… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I received a 1099 misc and filed my taxes as they told me
i received a 1099 misc and filed my taxes as they told me non employee compensation requires a schedule c form to be filed but i dont own a business … read more
abci168
abci168
Principal
27 satisfied customers
IRS says for State and local taxes on 1099 misc income given
Second opinion] IRS says for State and local taxes on 1099 misc income given to contractor. If the sales taaxes are imposed on you as a buyer and collected from you by the service provider, do not rep… read more
ABC Accounting Group
ABC Accounting Group
Bachelor\u0027s Degree
828 satisfied customers
IRS says for State and local taxes on 1099 misc income given
IRS says for State and local taxes on 1099 misc income given to contractor. If the sales taaxes are imposed on you as a buyer and collected from you by the service provider, do not report the sales ta… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I recieved a 1099-misc income form. I was working for a
I recieved a 1099-misc income form. I was working for a local baseball league in the concession stand. When I put the info in my tax return It says that You have not entered your principal business or… read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,931 satisfied customers
Amended Form 1099-Misc the original tax year 2017 Form 1099
amended Form 1099-Miscthe original tax year 2017 Form 1099 was understated . How do I correct this… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
TAX: Taxpayer received form 1099-Misc with income reported
TAX: Taxpayer received form 1099-Misc with income reported in box 7 (non-employee compensation) of $4189. The taxpayer performed services as a Substitute Teacher. Is this income reported on SCH C and … read more
Carter McBride
Carter McBride
LLM
966 satisfied customers
I am late filing my 1099 Misc for non-employee compensation.
I am late filing my 1099 Misc for non-employee compensation. I did not order enough forms so wanted to do it onlne so I won't be any later than today. :( … read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,931 satisfied customers
When issuing a 1099 misc to an independent contractor to
when issuing a 1099 misc to an independent contractor to whom we have paid more than $600 do we include the amount we paid them for expense reimbursement? For instance, if our IT contractor bought a c… read more
Carter McBride
Carter McBride
LLM
966 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x