How to Dispute a 1099 When Someone Paid You Cash

A 1099 is filed when someone pays you but does not withhold taxes. Many freelance workers or contract workers receive a 1099 during tax time; if it is incorrect, however, it can be problematic if you received your payments in cash. How much you owe in taxes depends on how much money you make over the course of a calendar year. If the 1099 shows that you received more money than you actually did, you can end up owing the Internal Revenue Service, or IRS, significantly more and incur fines and penalties.

Instructions

1

Contact the company that issued the 1099. The contact information is listed on the 1099.

2

Provide proof that you only received a specific dollar amount. Supply receipts of payment or deposit transactions from your bank where you deposited the cash. Keeping detailed records is essential if you receive your wages in cash.

3

Request that the company immediately file an amended 1099. The issuing company must send you and the IRS a new 1099 before you can file your taxes.

4

Contact the IRS if the company is unwilling to adjust your 1099. You will still need detailed records for the IRS to consider your dispute. You will need to furnish the agency with your proof.

5

File an extension on your taxes until the situation is settled. You must file the extension before your taxes are due.

6

Retain a tax lawyer if you cannot find relief from the issuing company or the IRS. This is a last ditch effort and only feasible if the difference between what you received and what the 1099 states is large.

7

Hire a tax professional to help prepare your taxes with the amended 1099 if one is issued to you. The tax professional can insure that your taxes are completed correctly even with the amended 1099.

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