Quote Originally Posted by Rideski View Post
In a way yes. A client could spend $60k on goods or services from my company. Some of them choose to not send a 1099. A different company can spend whatever tiny amount the current reporting threshold is, and voluntarily chose to send me a 1099. Which I'm responsible for showing in my return.
The revenue gets reported either way, but I'd I don't have their 1099 doc in my return I presume that's a red flag.
They don’t know the document isn’t in your return just what is reported. If you report it as income you’re all good. You have a legal obligation to track and report all income whether you get documentation on the income or not. I know someone who got in pretty big financial consequences because a client messed up and didn’t send him a 1099. He then thought he could get away without reporting it. 2 years later the client company got a competent accountant who filed their back taxes and also filed 1099s. He owed the taxes, underpayment penalty, and interest.