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New IRS procedures could crack down on ‘Under the Table’ payments

Mike Howry has been building homes here for the last 40 years and when it comes to paying his taxes, he plays by the rules.

“Each year I issue my sub-contractors 1099’s,” said Howry.

A 1099 is a document that shows how much money you paid an independent contractor

“A copy of that goes to the IRS. A copy goes to them and I keep a copy. That’s how the tax system works,” said Howry.

Then, there is a lot of labor-oriented businesses that pay under the table. CPA Craig Adamson says the IRS is going to start cracking down.

“The new IRS procedures are going to include much more investigation into whether or not a small business or a large business is meeting the reporting requirements for filing 1099’s,” said Adamson.

Worse off for the business owner. If you don’t give an independent contractor a 1099, you could be liable for penalties

“The small business can be penalized per 1099 that they have failed to pay over,” added Adamson.

As for Howry Construction, well he says it doesn’t really concern him.

“I haven’t really worried too much about it. I’ve been issuing 1099’s for 40 years,” concluded Howry.

Bottom line… Uncle Sam wants his money.

bhoffman

bhoffman

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