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company claiming more than you made

Date: Wed, 05/06/2009 - 13:17
Submitted by davidsmeridian00 on Wed, 05/06/2009 - 13:17
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I found out that the irs is saying i owe them money from my 2006 taxs. they say i claimed one thing and a company i worked for as a contractor claimed i made something differnt. is there a templete letter here i can use to send this company to prove my pay? The thing is they kept my last 90 days of pay and never paid me but they are claiming it on my taxes. I have emails with the company with them saying they kept my last 90 days of pay but the irs said i should send them a letter asking for proof of what they turnned in. Any help would be great.


Did the company ever pay you the money you made?

If yes, then they need to amend their 1099 to show the final payment in the year it was actually paid.

If not, here's how I would handle this (as an IRS licensed Enrolled Agent).

1. Amend your Schedule Co to show as gross receipts the total the company claimed they paid you.

2. In the Miscellaneous expenses section of Schedule C add an expense item of "Payor Retention - Funds withheld and not paid" equal to the amount they did NOT pay you.

The net effect of these two entries is to make your Schedule C receipts agree with the 1099 the IRS received and to make your net profit accurately reflect what you really made.


Submitted by Flyingifr on Thu, 05/07/2009 - 09:53

Flyingifr

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