lbones
Level 5
‎03-11-2020 02:20 PM

I have a client that had Solar Panels installed on their barn in 2018.  They were defective and the end result was that the company that installed them, removed the panels in 2019.  They then issued a 1099-Misc to my clients for $27K.  Lawyer has been trying to work with the company to resolve the issue and to date has had no luck.  The suggestion, by the lawyer, was to dispute the 1099.  I have never been involved in something like this.  Can this be disputed and not reported on the return.  If so, do I attach a statement as why we feel the 1099 is not viable?  Then does the return have to be a paper return? 

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Just-Lisa-Now-
Level 15
Level 15
‎03-11-2020 02:26 PM

So the 27K was a refund of what they had originally paid? 

Did they take the solar credit at the time of installation?


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
lbones
Level 5
‎03-11-2020 02:58 PM

This was a Power purchase agreement with no cost to the client originally.  They did not take the solar power credit.  The $27K was for the repair of the clients roof.  Just talking to them a couple of minutes ago, the money they received was a result of a lawsuit and the dollars are based on the estimate to repair.  They had my client sign a W9 before the company would release the check.  I am trying to get in touch with the lawyer now. 

Terry53029
Level 15
Level 15
‎03-11-2020 03:12 PM

I think I would put it on other income with a corresponding negative amount with an explanation 

added link to show property damage awards not taxable (loss in value)

 https://www.irs.gov/pub/irs-pdf/p4345.pdf

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BobKamman
Level 15
‎03-11-2020 03:47 PM

I'm pushing Form 8275 this year.  The game of "trick the IRS computer" is so 20th Century.  I don't think anything you can do will prevent a CP-2000, but explaining the situation on an IRS form makes more sense.