With a title like that how can you not read this entry.
I’ve tried to avoid blogging the Tiger Woods scandal because, except for the divorce issues it has little to do with taxes. But now this scandal is expanding into the tax area. Hookers and tax form 1099. How can I not blog this information for you.
Michelle Braun, who allegedly made at least $8.5 million for her job as a madam, was eventually busted by the feds for charges related to a prostitution ring. You might recall she operated a high end call girl service which catered to Hollywood actors and royalty (think Charlie Sheen).
Interestingly, she always paid her taxes – smart woman!
Braun has told TMZ that two of the women who have claimed to have relationships with Tiger Woods, Jamie Jungers and Holly Joy Sampson, were active in her escort service. Braun paid the women for their services out of Global Travel Network, her escort front. And she issued them forms 1099.
Tiger or no Tiger, the best part of this story is the whole “upstanding tax citizen” issue. Braun was apparently properly issuing forms 1099 for “non-employee compensation.” Remember, according to the Tax Code, even compensation received for illegal activities is subject to tax. Clearly, this woman had some pretty savvy tax pros at her side.
You can view the alleged tax forms here.
Showing posts with label 1099's. Show all posts
Showing posts with label 1099's. Show all posts
Tuesday, January 12, 2010
Friday, December 11, 2009
FORM 1099 AND W-2 LETTER
Here is a letter that we sent reminding our clients to issue the proper forms to all Independent Contractors. If you need more information regarding this issue, please feel free to contact us.
Re: Forms 1099 and W-2
It is that time of year again to issue 1099 forms. In order to determine this, it is necessary for employers to have a signed W-9 form on file for all Independent Contractors they hire. The IRS requires that you send a Form 1099 to all individuals (not corporations) to whom you paid $600.00 or more for services, interest or rent. There is one exception to this. Any payments to a corporation for legal fees in excess of $600.00 are reportable on Form 1099-MISC. This is very important since the IRS will match 1099’s to the individual income tax returns in order to determine whether or not all income was properly reported.
Our past experience is that, if your income tax return is audited, one of the first items reviewed is whether you submitted all of the necessary Form 1099’s. This is an easy way for the IRS to raise revenues (by charging you a penalty) and force you to comply with the law.
The penalty for not complying with the filing of Form 1099’s ranges from $15.00 to $100.00 for each form not properly completed and timely filed. If the IRS can determine that a Form 1099 was intentionally not filed, the penalty is $100.00.
Nebraska is requiring all employers to report newly hired and rehired employees to the state within 20 days of date of hire. Effective January 1, 2010 employers will be required to report all Independent Contractors in addition to the new hires and rehired employees.
Another important issue is the filing of the W-2 forms. These forms must be given to your employees by February 1, 2010.
If you would like our firm to compile the necessary information and/or prepare the necessary Form 1099’s and W-2’s for you, please sign and return the enclosed engagement letter along with the completed, appropriate 1099 and W-2 worksheets to our office. Since the first returns are due February 1, 2010 we are offering a discount if you provide us with the information on or before January 11, 2010. Of course, there is no fee for the 1099 we prepare for us. That 1099 is free. If you wish to fax your information to us, our fax number is (402) 362-5475.
If you have any questions, please contact Jane Rosenau or Cheryl Harlow at our office at (402) 362-6636 or (800) 975-4829.
Kopsa Otte
Certified Public Accountants
Re: Forms 1099 and W-2
It is that time of year again to issue 1099 forms. In order to determine this, it is necessary for employers to have a signed W-9 form on file for all Independent Contractors they hire. The IRS requires that you send a Form 1099 to all individuals (not corporations) to whom you paid $600.00 or more for services, interest or rent. There is one exception to this. Any payments to a corporation for legal fees in excess of $600.00 are reportable on Form 1099-MISC. This is very important since the IRS will match 1099’s to the individual income tax returns in order to determine whether or not all income was properly reported.
Our past experience is that, if your income tax return is audited, one of the first items reviewed is whether you submitted all of the necessary Form 1099’s. This is an easy way for the IRS to raise revenues (by charging you a penalty) and force you to comply with the law.
The penalty for not complying with the filing of Form 1099’s ranges from $15.00 to $100.00 for each form not properly completed and timely filed. If the IRS can determine that a Form 1099 was intentionally not filed, the penalty is $100.00.
Nebraska is requiring all employers to report newly hired and rehired employees to the state within 20 days of date of hire. Effective January 1, 2010 employers will be required to report all Independent Contractors in addition to the new hires and rehired employees.
Another important issue is the filing of the W-2 forms. These forms must be given to your employees by February 1, 2010.
If you would like our firm to compile the necessary information and/or prepare the necessary Form 1099’s and W-2’s for you, please sign and return the enclosed engagement letter along with the completed, appropriate 1099 and W-2 worksheets to our office. Since the first returns are due February 1, 2010 we are offering a discount if you provide us with the information on or before January 11, 2010. Of course, there is no fee for the 1099 we prepare for us. That 1099 is free. If you wish to fax your information to us, our fax number is (402) 362-5475.
If you have any questions, please contact Jane Rosenau or Cheryl Harlow at our office at (402) 362-6636 or (800) 975-4829.
Kopsa Otte
Certified Public Accountants
Saturday, January 17, 2009
DON'T FORGET THOSE 1099'S
Did you know that we actually audit each other? That is really what the 1099 reporting requirements are all about. The IRS matches the 1099's that are sent to them, to the tax returns of the recipients to see if all income is reported. In a IRS audit, the auditor has a copy of all of the 1099's that were sent with your name on them, and reconciles those amounts back to your books and tax returns. You can see why the government has stiff penalties if you do not send 1099's - we are helping them to audit. It is that time of year again to determine who should receive a Form 1099. The IRS requires that you send a Form 1099 to all individuals (not corporations) to whom you paid $600.00 or more for services, interest or rent. There is one exception to this. Any payments to a corporation for legal fees in excess of $600.00 are reportable on Form 1099-MISC. The due date in sending the 1099 to the recipient is January 31st, and the due date for sending the copy to the IRS is the end of February. The penalty's range for not complying with the filing of Form 1099 is normally $100.00 for each form not properly completed and timely filed. In addition, you are also required to have a W-9 on file, for non-incorporated businesses that you pay over $600.00 during the year for tax deductible services. If you do not have a W-9 on file, it is possible that the IRS could fine you as much as 28% of the amount paid.
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