Redo 1099s?

[sharmoren0112]

A new client did his own 1099s for 2023 but used MISC instead of NEC & already mailed them. Do I need to redo them? Or can I just complete the 1096 calling them MISCs? Please advise. Thank you!  

[abctax55]

Redo is the correct approach.  

NEC notifies the IRS to look for SE tax on the income.  

I have no clue if the IRS would impose penalties for using the wrong form, but why take the chance?

[BobKamman]

Probably did the wrong thing for 2022 also.  Make sure they  shouldn't be W-2s and the real problem is employment taxes.  

[sharmoren0112]

Thank you VERY much! My gut was telling me to do that, but felt I needed to get a second opinion. I love hearing what my tax community has to say. I'll do that. I'd rather not risk getting this new client into  any trouble. Thank you!!  

[dbelling]

File a corrected 1099misc with all boxes zero and check the box that says corrected.…..form 1096 showing zero and mail toIRS. refile form 1099 nec and 1096 with correct info….the corrected forms can not be efiled..  You must mail them in.

The first 1099 will be with the exact same payer and recipient information as the originally filed form, but the amounts on the form will be all zeros and the “CORRECTED” box will be checked. This will remove the originally filed form from the IRS records.

[BobKamman]

But the wrong 1099-MISC forms are not in any IRS records, are they?  I would prepare correct 1099-NEC forms and send them to the payees with a cover letter explaining that the 1099-MISC they received was incorrect, had not been filed with IRS, and should be disregarded.  

[sjrcpa]

OP said they already mailed them.

While IRS has not posted them yet, they will sometime after they receive them (assuming this is not another year where they just toss them). Unless OP just meant mailed to payees and not IRS.

[sjrcpa]

@dbelling Some software lets you efile corrected 1099s.

[sharmoren0112]

Sorry I had to get more 1099s. No, the incorrect MISC forms have not been submitted & won't be. I saw client used the MISC not the NEC & hoped I could just do the NECs & submit them. From what you said, I don't think I need to do corrections. I just need to get the NECs in the mail to the workers & then I should be able to efile everything. Is that correct? Please lmk. Thank you!!!

[sharmoren0112]

Yes, they were only sent to the NEs, nothing has gone to IRS yet. I'm working on getting all that in now. Thanks!

[BobKamman]

That's what I would do.  But I would alert the payees to expect the correct forms in the mail -- these days the Post Office can take a week to deliver, even just across town.  And they may be filing their returns now that January 31 has (almost) passed.  

[dbelling]

I misunderstood…if IRS never recd the incorrect forms then you only need to file correct forms.  Folks that received incorrect forms need to be contacted to discard .  File corrects forms as usual

[sjrcpa]

@BobKamman Great mind reading.

I nominate you to teach this year's mind reading classes.

[BobKamman]

@sjrcpa The client asked for help preparing the 1096.  Doesn't take much mind reading to figure out, "I can fill out these forms because I know people should have them by January 31, but danged if I know what to do with the IRS copy."  

[sjrcpa]

I see that now. 😯