Problem

A client had a customer who mistakenly reported a 1099 under their personal social security number instead of under the company's ID. Due to this error, the client was unknowingly reporting all of the income from the customer under the corporation.

Solution

During the processing of the client's tax returns, we noticed that the 1099 was reported under an individual's name. We discussed the situation with the client and upon the inquiry the client's customer realized that they had accidentally incorrectly reported the 1099 under the client's social security number. The client's customer was able to correct the matter and re-report the 1099 to the IRS.

Benefit

Because this incident was identified and corrected the client was protected from having to owe up to 40% more in taxes. Additionally if the 1099 was reported without the error being resolved the IRS would have given a penalty with interest. Krishnan Company gives the right direction to make sure that all matters are done correctly to avoid any future problems for our clients.